The past several years have not been particularly good for New Jersey’s land-based casino industry. The state lost five of its twelve casinos within around two years, with the last one – Trump Taj Mahal – closing doors last October. What is more, casino expansion outside Atlantic City and to New Jersey’s north was on the verge of becoming reality, but was failed in the home stretch after being rejected at a statewide referendum.
However, the state’s brick-and-mortar gambling trials did not seem to have had any negative influence on the online gaming operations provided to local players, or at least not for now. Internet gambling was legalized in New Jersey in 2013. First iGaming websites offering poker and different versions of a number of other popular casino games went live in November 2013. Since then, the state’s regulated online gambling industry has been on the rise and one of the main drivers of overall growth, as seen in the monthly and full-year reports posted by the local gambling regulator – the Division of Gaming Enforcement.
The latest such annual report showed that the online gambling platforms operated by local casino operators in partnership with leading international iGaming ones generated the total amount of $196.7 million in 2016, reflecting an increase of more than 32% year-on-year. Although expectations are that New Jersey’s Internet gambling market is poised to a further growth in the years to come, it can be said that online poker may not be a major driver of the upward trend.
It is not that that particular type of product has performed too badly over the past three and a half years, but it has certainly failed to meet expectations about the state witnessing the establishment of a super thriving online poker market.
| New Jersey Online Poker Revenue ($ million) | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | |||||
| January | – | 3.4 | 2.3 | 2.15 | ||||
| February | – | 3.1 | 2.05 | 1.99 | ||||
| March | – | 3.2 | 2.05 | 2.46 | ||||
| April | – | 2.59 | 1.99 | 2.59 | ||||
| May | – | 2.27 | 1.93 | 2.57 | ||||
| June | – | 2.04 | 1.84 | 1.97 | ||||
| July | – | 2.1 | 1.89 | 2.01 | ||||
| August | – | 2.25 | 1.98 | 2.17 | ||||
| September | – | 2.09 | 1.77 | 2.02 | ||||
| October | – | 1.97 | 1.91 | 3.1 | ||||
| November | 1.26 | 1.88 | 1.96 | 2.08 | ||||
| December | 2.9 | 2.06 | 1.98 | 2.1 | ||||
| Total | 4.16 | 29.76 | 23.65 | 27.21 | ||||
The segment had its best twelve months in 2014, when all online poker operators in the state generated overall revenue of $29.76 million. It can also be seen that with very few exceptions monthly revenue stayed beyond the $2-million mark.
New Jersey’s iGaming market was opened with four operators offering online poker. However, four online poker websites turned out to be too many for a state with a population of around 9 million people. Some of the brands to have been present in the local market – Betfair and UCasino, to be more precise – never managed to create profitable poker operations in the state, which logically resulted in these scrapping that particular offering.
By October 2014, the local market was reduced to just two operators. The status quo was maintained up until March 2016. And that period was the worst for the state’s online poker market. Revenue from the segment amounted to around $23.7 million in 2015 and was the result of a downward trend that was fueled by monthly drops in proceeds.
A new player appeared on New Jersey’s online poker scene in March 2016, a player that was highly anticipated by many. PokerStars launched its offering with Resorts Atlantic City to boost not only the casino’s revenue but also the segment’s overall performance in the state.
Online poker revenue amounted to $27.12 million in the twelve months ended December 31, 2016, up 15.05% from the previous year. The considerable growth can certainly be attributed to the world’s largest online poker room’s return to the US gambling space, although its operations are only restricted to New Jersey.
The launch of PokerStars’ offering resulted in month-over-month revenue increases in the first two months and in 20.3% and 30.35% increases on an annual basis for the same months. Revenue kept on rising on an year-on-year basis until the very end of 2016, but had its ups and downs when compared on a month-over-month basis.
October 2016 was the best month for New Jersey’s online poker. Revenue of $3.1 million was generated, reflecting a 62.2% increase from the $1.91 million reported for the same month of 2015. The massive growth was attributed to the two online poker festivals held in the state during that month, although one of them ended prematurely due to “geolocation issues.”
The partypoker/Borgata-organized Garden State Super Series V was actually that unfortunate festival. PokerStars’ New Jersey Championship of Online Poker, on the other hand, was a rather successful endeavor. Figures showed that the festival not only increased tournament activity on the card room’s New Jersey website, but cash game activity, as well.
Although PokerStars has certainly boosted the state’s online poker industry, it should be said that much bigger growth would probably not be seen, or not in the next few years, at least. As mentioned above, the local market has proved to be a bit inept at sustaining a larger number of poker operators. The initial interest in PokerStars may eventually wear off, and when and if this happens, the market may shrink (in)significantly, depending on other factors. What is more, there is a big chance that PokerStars retains its initial stats by cannibalizing players from the other two brands operating in New Jersey – pokerparty and 888poker.
