Pala Interactive Abandons Plan For New Jersey Poker Site

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Wednesday, March 11th, 2015 | Written by Shane Larson

Last November, Pala Interactive partnered with the Borgata to launch New Jersey’s first tribal operated online gambling site called PalaCasino.com. The federally recognized Californian tribe said it also hoped to launch an online poker product in the first quarter of 2015, but now that plan has been put on hold indefinitely, mostly because of PokerStars’ “imminent” entry into the Garden State’s iGaming market. As Pala Interactive CEO Jim Ryan explains:

“We put that on hold because we do expect PokerStars to enter the market, not that we would have grabbed a significant share because there are two very credible poker networks operating in the state of New Jersey at this point in time. Liquidity is obviously a challenge.”

California’s Pala Indian Tribe

In the absence of any online gambling legislation in California, the Pala Band of Mission Indians turned their attention towards the regulated market of New Jersey last year, and were subsequently approved for a real money iGaming license. As a result, the tribe’s gaming interests now includes the PalaCasino.com site in the Garden State, as well as the Pala Casino Resort and Spa in California, which is a huge land based casino operation with 2,000 slot machines and 87 table games, as well as a 500 roomed hotel complete with 10 restaurants.

Now Part Of The Regulatory Process

For years California has been debating whether or not to legalize online poker, and while there seems to be as much interest as ever in 2015, analysts seem to believe this year will likely pass without any major movement on the issue. Not content to sit idly by as Nevada, Delaware and New Jersey develop their industries further, the Pala Band of Mission Indians of San Diego County decided to enter the New Jersey iGaming market, not just to reap any potential financial rewards, but also in order to familiarize themselves with the regulatory process. As CEO Jim Ryan explains:

“Being a new enterprise, we wanted to expose ourselves to a regulatory process. So having the company, its management team and its product go through that process, being vetted, positioning us not just for New Jersey but for other regulated markets as they open up, fits perfectly with our strategy, which, by the way, is to operate in US regulated real-money gaming environments.”

Poker Not A Priority For Now

While casino games are a major part of Pala Interactive’s gambling revenues, poker is of lesser importance, although that could change if online poker is ever regulated in the Golden State, especially with California seeking a similar approach to Nevada in only ever allowing online poker, and not casino games. Pala’s original idea of launching an online poker site in New Jersey is now likely to be put on hold until California embraces regulation, as while Pala is a recognized brand on the west coast, in the absence of regulation it is likely to remain a relatively unknown brand on the east coast, and be unable to compete against the likes of Caesars’ WSOP and 888poker.

Besides, Pala Interactive still sees liquidity as a formidable challenge in the New Jersey market, with the market currently dominated by just two operators, namely WSOP/888 with a seven-day average of 220 cash game players, and Party Borgata with 180 cash players. In September 2014, for instance, Ultimate Gaming was forced to exit the online gambling market in New Jersey, and as Pala CEO Ryan explains:

“We’ve already seen one poker network exit the marketplace, so our objectives towards online poker product are different than our casino product.”

PokerStars Entry A Clincher

If a lack of poker liquidity in New Jersey wasn’t problem enough, PokerStars’ imminent entry into the state’s online poke space seems to have been a clincher for Pala Interactive. Needless to say, the world’s global online poker leader is likely to carve out a huge chunk of the state’s iPoker market as its own, although New Jersey will also be hoping the company will help further grow the market beyond its present size.

PokerStars originally applied for a New Jersey iGaming license in December of 2013, but the application has only moved forward recently as the previous “bad actor” clause associated with the company is deemed no longer applicable to new owners Amaya Gaming. PokerStars is now awaiting final approval for its license by the New Jersey Division of Gaming Enforcement (DGE) before launching its online gambling product, and this is reason enough for Pala Interactive to withdraw from the New Jersey poker market. Nevertheless, Pala still sees greater rewards coming from its online site PalaCasino.com, and as CEO Ryan commented:

“The casino product, we actually think can take a meaningful share of that marketplace.”