NJ Online Poker Revenues Contract 15% In May

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Monday, June 22nd, 2015 | Written by Stephen Smith

On June 12th, the latest batch of results were released for New Jersey’s online gambling industry and while overall revenue results were positive in May and noted a 19.1% improvement to $12.5 million year-over-year, online poker, on the other hand, continued its disappointing run with revenues contracting by 15% to $1.93 million from the $2.27 million collected in May 2014. Nevertheless, the real lynchpin of the Garden State’s iGaming industry continues to be online casino games, and commenting on their 28.7% improvement in revenues year-over-year, PlayNJ Spokesperson John Darr said:

“Some are inaccurately characterizing New Jersey’s online casinos as a financial disappointment. Nothing about 28% growth year-over-year is disappointing. Lawmakers can’t be disappointed about $30 million in new tax revenue that has been generated by online casinos for the state.”

Declining Popularity Of NJ iPoker

As well as declining by 15% y-o-y, New Jersey online poker also noted a 2.5% fall in revenues in May compared to the $1.98 million generated in the previous month. At the heart of the problem lies a number of woes, not least low liquidity of players attracted to the state’s iPoker sites, together with inadequate marketing by the online poker sites themselves. While PokerStars’ potential entry into the market possibly in the third quarter of 2015, as well as the forming of an interstate compact with other regulated states in the future could go a long way towards improving this situation, ultimately the fact remains that after enjoying its heyday between 2003 and 2006, poker now appears to be just a minor part of the iGaming industry, with casino games and sports books the chief money spinners.

In the meantime, New Jersey online poker still continues to generate around 20% of the state’s overall iGaming industry, but if the sector wants to avoid the same dire treatment of poker as seen in brick-and-mortar casinos, then more has to be done soon to improve its appeal amongst players.

Casino Games Supporting The Industry

In May, online casino games generated $10.54 million in revenues, representing an almost 29% improvement in business y-o-y, although compared to the previous month revenues were down slightly by 1.5%. Taken together with iPoker results, online revenues were up by 19.1% y-o-y but down by 1.5% to $12.47 million compared to the $12.6 million collected in April.

Leading New Jersey’s overall iGaming market in May was Borgata/Party Poker with a 31.7% share of revenues worth $3.96m, followed by Golden Nugget/BetFair with a 24.6% share, Caesar’s Interactive with a 21% share, Tropicana with 20%, and Resorts with 2.6%, although that could soon change if its partnership deal with PokerStars ever comes to fruition.

So far this year, online gambling has produced $60,305,510 in revenues for New Jersey, a 12.6% improvement compared to the same period in 2014. From that total, online poker has generated $10,486,105, representing an almost 28% decline from January to May last year of $14,627,633. The state has subsequently collected $9 million in gambling taxes this year so far, and $28.7 million in taxes since the industry first launched.

AC’s Casinos Down 9% In May

Finally, Atlantic City’s eight remaining casinos generated $208.6 million in May, and when the now closed four casinos are excluded from the results, that represents a 5.3% improvement over last year’s figures. Commenting on May’s revenues, New Jersey Casino Control Commission chairman Matt Levinson explained:

“That’s a strong showing for what our detractors say is a weak market. Whether you look at the results for the one month or for the first five months of this year, total gaming revenue is up for the current operators. The size of the market may be smaller, but the health of the current operators is getting stronger.”

Including iGaming revenues and the now shut casinos, however, the $221.1 million the state’s casino hotels collected last month was down by 9% compared to the $242.9 million taken in the same month in 2014. From that tally, slot machine revenues dropped by 10.9% to $157 million y-o-y, while table games were also lower by 8.1% to $51.6 million.

Nevertheless, with the state’s remaining venues sharing out the spoils of their now defunct rivals, chief beneficiaries in May included Caesars whose market share rose a massive 51% to $27.7 million last month, followed by the Golden Nugget up 33% to $22.5 million, and Resorts up 19.6% to $14.4 million, Harrah’s up 8.2% to $33.3 million, and the Tropicana up 2.3% to $27.6 million. On the other side of the coin, the Trump Taj Mahal saw its market share decrease by 14.5% to $18.4 million, while Bally’s was down 12% to $18.1 million, and the Borgata declined by 4.7% to $56.1 million.