NJ iGambling to Surpass $200 million in 2017

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Wednesday, February 22nd, 2017 | Written by Charles Washington

A recent report published by Chris Grove and Adam Krejcik of Eilers & Krejcik Gaming predicts that the New Jersey online gambling market will continue to grow this year. The positive forecast estimates that the industry will finish out 2017 past the $200 million revenue mark. That doesn’t mean that the experts are predicting a banner year for online poker, however, as the report predicts that the online poker vertical will see little to no growth in the coming year. Some of the biggest takeaways of the report are as follows:

NJ iGambling Market Is Growing

In 2016, online gambling generated $196.7 million in gross gaming revenue, 32.1 percent more than the previous year. For 2017, the experts do not see a repeat performance, though, as they believe that growth will slow, but still head in a positive direction. Overall, the report puts anticipated growth at 17 percent with a $33.2 million gain in gross gaming revenue compared to 2016.

iPoker Market Is Set to Shrink

The report estimates that all the Garden State’s online gambling market growth will come from online casino games. By the experts’ analysis, the online poker market will decline in the coming year. This may seem confusing to some since online poker grew by 11.3 percent during 2016, but the report’s author feel that this upswing was due to the arrival of PokerStars. Before the operator entered the market, online poker had been declining.

From 2014 to 2015, revenues dropped by 17 percent, but when PokerStars opened for business, revenues increased by 30 percent for two consecutive months. After that, gains of only 1 percent were seen for the rest of the year. Based on this trend, the report’s author believe that the increase will not be repeated in 2017.

Casinos Have Different Factors for Success

The report does a nice job of explaining how various online casinos have managed to increase their gross gaming revenue by surviving mostly due to brand recognition. After a rocky entry into the market, for example, Borgata has carved out a nice niche for itself and has become widely known among players. The name has subsequently given the casino the largest share of New Jersey’s online gambling market.

Casinos without a big name have had to get creative to become online successes, with the Golden Nugget providing a perfect example of this. While its land based casino has only a small share of the brick and mortar market, the Golden Nugget online casino has the second largest market share after Borgata. To reach this position, Golden Nugget has invested in developing a wider selection of games than their competitors, and has also been strategic with its promotions and bonus structures in order to make the site appealing to players. Finally, the Golden Nugget offers one of the most diverse ranges of payment processing options, drawing players that prefer to use one form of payment over another.

New Brands May Emerge

The report concludes with a prediction that other operators may jump at the chance to cash in on the growth of the gambling market. Specifically, it names TEN and MGM as potential future players in the New Jersey iGaming industry.

2017 Off To Good Start

In the meantime, New Jersey’s online gambling market got off to a good start after posting a 29% revenue increase to $18.8 million for January. That figure represents yet another high for the Garden State, whose previous record was set only the previous month in December. Furthermore, January’s results extends a nine month winning streak in which revenue growth have come in at around 30 percent or more. From January’s tally, online casinos were up by 32% to $16.5 million, while online poker, too, noted a solid 9% improvement to $2.3 million compared to the same month in 2016. New Jersey subsequently collected $2.8 million by way of gambling taxes in January.

Since launching back in November of 2013, New Jersey’s internet gambling market has generated almost $500 million in revenues, in the process channeling $75 million in much needed tax revenues into state coffers. Commenting on the positive effect online gambling is having on New Jersey’s overall gambling industry, the Eilers & Krejcik report stated:

“Online gambling is becoming a highly effective tool for Atlantic City’s casinos. Increased integration between the online and live casino appears to be driving additional play and visitation at land-based properties.”