Nevada Online Poker Revenues Up 9% In May

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Tuesday, July 1st, 2014 | Written by Charles Washington

In May, Nevada reported an 8.11% jump in gambling revenues to $970.3 million, compared to the same month last year. From that tally online poker generated $862,000 in revenues, an 8.8% improvement over April’s results. Helping to fuel the Silver State’s gambling industry in May was a welterweight world championship unification fight between Floyd Mayweather and Marcos Maidana, a Chinese holiday, as well as the 45th Annual World Series of Poker which is currently in full swing at the Rio All-Suite Hotel & Casino.

The state subsequently collected $56.2 million in gambling taxes, down 2.43% from the same month last year.

Nevada land-based casinos up 8.11% in May

The Nevada Gaming Control Board has reported that Nevada’s brick-and-mortar casinos brought in $970 million last month, with slot machine up 4% to $556 million from a year earlier. Slot results are viewed as a reliable gauge for the health of the overall gambling market, and commenting on May’s results, J.P. Morgan gaming analyst Joe Greff, said:

“We maintain our positive outlook for the Las Vegas Strip and believe the overall recovery will continue as 2014 progresses.”

Across the individual markets, the Las Vegas Strip traditionally accounts for more than half of Nevada’s gambling revenues, and in May the Strip generated $593 million of total revenues, up 17% from May 2013.

Baccarat provides a boost

Statewide, Baccarat generated 88.7% more revenues at $170.9 million, and also 29% of the Strips total take. The increase in baccarat gambling was given a boost by vistors in town for special events, such as the week-long Chinese May Day national public holiday, although even without baccarat the Strip would still have experienced a 1.7% increase in its revenues.

“We view the monthly results as solid even after adjusting for high hold in baccarat,” commented gaming analyst Steven Wieczynski from Stifel Nicolaus Capital Markets.

Online poker up 8.8% to $862k

According to data revealed by the Nevada Gaming Control Board, the state’s three online poker rooms generated almost 9% more revenues at $862,000, compared to the $792,000 taken in April. The total represents Nevada’s second highest monthly tally this year, the highest being the $926,000 collected in March.

As expected, the World Series of Poker has given Nevada’s online poker industry a massive shot in the arm and according to PokerScout, WSOP (Nevada) is currently experiencing 140 cash game players at any one time, putting it on the same level as New Jersey’s biggest online gambling site, Party Borgata. Unfortunately, however, the increase in traffic has not affected Nevada’s other two sites, with Ultimate Poker currently languishing on 60 cash game players, and Real Gaming still showing no traffic at all.

Online poker generates $10.2m for first 12 months

The state of Nevada launched its first online poker room Ultimate Poker back in April 2013, before later being joined by WSOP.com and then Real Gaming. For the first 12 months of its online poker industry the state has now generated $10.2 million in revenues, translating into a mere $700,000 in tax revenue for Nevada and mirroring the disappointing results seen in the USA’s other regulated igaming markets.

But the signs have all been there for a while, and even a couple of months ago Morgan Stanley felt compelled to reduce its initial US online gaming market projection for 2017 by 30% to $3.5 billion, stating it was necessary in order “to better reflect the insights we have gained following the first few months of operations [in Delaware, Nevada and New Jersey.]

What happened?

Naturally, with experts forecasting bumper revenues ahead of online poker legislation, state lawmakers are beginning to ask what went wrong with the legal online gambling market. Explanations frequently cited include problems with geolocation technology, as well as payment processing problems. A report by Morgan Stanley, for instance, estimates that in New Jersey around 60% of internet gambling transactions were rejected, with roughly half of those users never making another attempt to deposit funds on their accounts.

Other experts have offered more dramatic explanations like the one suggested by the new President of French online gaming regulator ARJEL, who said; “The fad is over. Basically, the online poker market may be mature.”

However, Israel Posner, executive director of the Levenson Institute of Gaming, Hospitality and Tourism at Stockton College of New Jersey, said he believes it will be a while before the industry fully understands the nascent igaming market, and that gaming providers will have to identify better the games that will be most interesting to customers in the industry’s leading growth area, namely mobile devices. As Posner, explains internet poker requires “a critical mass of people who are interested in playing the game you want to play at the stakes that you want to lay at the time that you want to play.”