Online Poker Liquidity Deal Fails to Ignite NJ Market

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Tuesday, July 17th, 2018 | Written by Shane Larson

The Garden State’s internet gambling market collected $22.7 million in June, or 12.1% more than it took during the same month in 2017, according to the latest results released by the New Jersey Division of Gaming Revenue (DGE). As usual, online casinos comprised the bulk of revenues, and posted a 13.1% improvement to $20.9 million, while online poker, too, noted a slight increase for the first time in over a year, with its revenue rising by 1.2% to $1.757 million.

Shared Liquidity Disappoints

On May 1st, New Jersey, Nevada, and Delaware started to share their poker players across state borders, with the liquidity agreement expected to provide a significant boost to operator revenues on the shared network. Results for the whole of May did not disappoint, either, as the $1,929,693 that was generated was roughly 10.6% higher than in April. Nevertheless, it was still 9% less versus the same month last year.

Even greater expectations were anticipated for June as the World Series of Poker swung into action in Las Vegas, and the WSOP/888 network offered countless tournament opportunities and satellites through to live World Series of Poker events. Those hopes were dashed in June, however, with the $1,757,839 generated down by 8.9% compared to May, and showing only a slight 1.2% increase versus June 2017, a month that produced an all-time low for the market, and should therefore have provided an extremely favorable year-on-year comparison.

First Half iPoker Results Down 11.5%

With the first six months of the year recorded, we now can take a closer look at how New Jersey’s online poker market has been performing over the past few years. For the first six months of 2016, for instance, New Jersey online poker generated revenue of $13,734,234, dropping to $12,585,723 for H1 of 2017, and now $11,138,986 for January-June of 2018. Consequently, online poker revenues has plummeted by 19% over the past two years alone.

WSOP/888 Only Winners

The tri-state iPoker liquidity network may seem like a step in the right direction, but the compact in its present forms basically excludes all other operators from taking advantage of its benefits, with the exception of the WSOP/888 partnership. That is because only these Caesars run brands have operations across all three regulated states, and so are able to take advantage of its potential at the expense of its competitors in New Jersey.

Before the compact was enacted, for example, PokerStars sat comfortably atop New Jersey’s online poker market, but has since seen its position slide. In June, PokerStars subsequently saw its revenue decline to $564,891 from the $716,668 collected in May, while Borgata, too, saw its revenue decline to $378,019 from the $442,677 gathered in the previous month. Moreover, these figures represents their worse online poker revenue results to date.

Caesars (888/WSOP), on the other hand, was the only of the state’s operators to post year-on-year gains, with its revenue rocketing by a whopping 73% to $814,929. Needless to say, since the liquidity agreement was enacted in May, WSOP.com has been New Jersey’s undisputed market leader.

Online Casinos Up 13.1%

New Jersey’s online casino market has been noting year-on-year gains since being regulated, and June was no exception. Last month, the vertical subsequently generated $20.9 million in revenue, marking an impressive 13.1% increase compared to June 2017. As a result, online casinos have now produced $20 million plus revenues for all six months of this year, making that level the new norm.

Online Gambling Higher by 12.1%

Once online poker and casinos are added together, New Jersey’s online gambling market produced a combined $22.7 million in June, up by 12.1% versus the same month last year. For the first six months of 2018, online gambling revenues stand at $139,540,151, marking an impressive 14.9% increase compared to the $121,414,292 collected between January-June 2017.

Land-Based Gambling

New Jersey’s overall casino market, including online gambling, generated $233.6 million in June, or a 7.3% improvement on the $217.7 million taken in the same month a year earlier. Even when online gambling ($22.7m) and four days of legalized sports betting which contributed a further $7.2 million are taken out of the figures, Atlantic City’s gambling industry still managed to post a 5.1% gain to $207.5 million.

In any case, the latest monthly result represents just the second time revenues have increased this year, while the significance of the amount collected can be seen from the following revenue figures:

January: $162,350,669
February: $170,064,598
March: $194,883,771
April: $191,416,787
May: $193,394,309
June: $207,496,488

Also adding to June’s numbers was the Ocean Resort and Hard Rock casinos opening their doors for business on June 28th, although their potential impact should become more apparent after next month’s results are released.