PokerStars Struggling in New Jersey’s Poker Market

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Thursday, October 19th, 2017 | Written by Adam Brown

In New Jersey, the PokerStars name doesn’t appear to carry quite the same weight as it does across the rest of the globe, despite operating in the only USA state where it is legally allowed to offer online poker. Last winter, for instance, the brand with a reputation for hosting some of the most attended events in the world failed in its effort to bring a similarly popular live sponsored poker event to New Jersey.

Helping to explain its dismal numbers was a limited amount of marketing, a lack of online presence and guaranteed prizes, as well as barely any lead up time resulting in PokerStars having to cancel some of the events due to poor attendance.

The Failure of PokerStars Megastack

PokerStars tried once again only this past weekend to host some more live events, but the result proved to be even worse despite deciding to scale down its series. Although the two-day PokerStars Megastack New Jersey event featured a guaranteed prize pool of $125,000, in the end the site was ultimately left footing a $31,000 overlay bill.

At least this time around the marketing efforts started early, though, while online satellites allowing players to qualify for the largest event for just 50 cents were also a great idea. Even so, the guaranteed prize pools still came up short all the same. In fact, there was just 409 players entering the $220 Sunday Special Live event across four starting flights on October 6 and 7. Taking out the fees subsequently leaves PokerStars a good $18,200 short of the $100,000 guaranteed for the event.

Meanwhile, the $120 Cheap and Deep event held on October 8 came with a $25,000 guarantee, but it only managed to draw 119 entries, thus forcing PokerStars to foot over half of this bill. No matter how you look at it, an overlay of $13,100 in a $25,000 guaranteed event is much too big.

The Online Lead is Falling

PokerStars has led New Jersey’s online poker market since obtaining a license last spring, but nevertheless the site’s online lead has continued to fall. The latest figures from the New Jersey Division of Gaming Enforcement, for example, show that in September 2017 PokerStars generated $707,976, marking the first time revenues have fallen below six figures since its New Jersey launch. The figure was also lower by 11% year-on-year.

Similarly, the online poker sites run by Caesars Interactive Entertainment, including WSOP NJ and 888 Poker, also noted a drop in its y-o-y revenue. By contrast, the Borgata network of online poker sites, including Borgata Poker, PartypokerNJ, and PlayMGM Poker, is fast narrowing the market lead of PokerStars, having posted revenue of $632,568 in September.

Furthermore, if New Jersey’s overall poker figures do not seem all that impressive, it’s because they really aren’t. In fact, the $1.9 million in poker revenue generated by the state’s sites represented less than 10% of the state’s online gambling market worth $20.4 million in September. All this even though there originally existed high hopes that PokerStars’ entry into New Jersey would help give its online poker market a huge boost.

Losing Ground and Falling Flat

The question still remains as to why PokerStars has started losing so much ground to its online competition. It has certainly created a lot of great PR and goodwill for itself over the the years, including bailing out Full Tilt Poker players after the site was shut down by the Department of Justice in 2011. However, it is possible that a great deal of that goodwill was turned into ill will after the company cancelled its Supernova Elite program at the last minute, leaving its highest volume players frustrated and out of pocket.

In addition, PokerStars has launched several online games that rely more on luck than skill. Perhaps people have been turned off by poker being gradually transformed into a casino game, compounded further by having added traditional online slots and table games to its once poker-only website.

More recently, the company has been accused of becoming a little too arrogant following years of being the biggest online poker site in the world. It is therefore possible that PokerStars has just become too overconfident, and now feel that its strong name recognition is all that’s needed to attract new customers.

Whatever the case may be, it now appears that New Jersey players are beginning to look for other options, rather than just siding with the leader of the pack. Therefore, the PokerStars marketing team needs to work out what the problem may be, and quick, or else the site can expect to experience more worrying trends going forward. Furthermore, PokerStars is all but ruled out of obtaining a Nevada online gaming license following a landmark liquidity deal agreed between Nevada, Delaware and New Jersey this week, which is sure to heap even further pressure on its New Jersey operation.