Online poker is a young and immature industry in the US in the post-UIGEA era. Only three states – Nevada, Delaware, and New Jersey – have been allowed to legalize Internet gambling within their borders since 2006 when the Act came into force. And as we are going further into 2017, more and more states are gearing up to introduce legislative pieces for the legalization of this type of offering.
It is still too early to say how many of them will succeed by the end of the year. Yet, the mere fact that there is such a massive interest shows that lawmakers may be ready to embrace online gambling again, despite the murky vestiges of the past when several online poker rooms continued providing real-money services to US citizens, thus violating the federal ban.
But while future iGaming bills are being prepared, maybe it would be a good idea to look at how regulated US online poker markets performed last year. As already mentioned, three states have legalized and regulated online variants of the table game that enjoys widespread popularity around the world. However, despite that popularity, online poker has failed to establish itself as a leading revenue generator in said three states.
In other words, since legalized and regulated, online poker has constituted a relatively small part of the overall revenue generated. It is rather difficult to list the exact reasons for this trend. The immaturity of this type of offering in the three states may be one such reason.
And here is a closer look at how the three regulated online poker markets performed in 2016.
Nevada
Nevada is the biggest gambling market in the US and among the biggest in the world. However, its online gambling sector seems to be representing a very insignificant part of the whole. Unlike the other two regulated states, the local gambling regulator – the Nevada Gaming Control Board – does not provide financial information about how online gambling performs within the whole market. In other words, it is practically impossible to follow how online poker develops in the state.
At present, 888 Holdings is the only operator to be providing this type of product to local gambling customers. The Gibraltar-based gambling group works with Nevada partner Caesars Entertainment Corp.
Delaware
As it can be seen from the table below, Delaware’s online poker revenue fluctuated between $23,056.88 and $40,337.40 in 2016. May was the state’s best month in terms of proceeds generated. If a comparison should be drawn, it should be said that online poker performed slightly better in 2015 when the total amount of $392,400.76 was generated. In comparison, Delaware reported full-year proceeds of $375,935.53 for the twelve months ended December 31, 2016.
Revenue in the first four months of 2016 dropped significantly when compared to the same period of 2015. It then improved over the next several months until a more than 20% slide was registered in November.
| Monthly Online Poker Revenue ($) | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2016 | 2015 | Change (%) | ||||||
| January | 26,348.92 | 27,695.45 | -5.11 | |||||
| February | 28,294.05 | 34,526.78 | -18.05 | |||||
| March | 37,324.06 | 43,636.32 | -14.47 | |||||
| April | 34,751.66 | 48,552.24 | -28.42 | |||||
| May | 40,337.40 | 39,245.03 | 2.78 | |||||
| June | 36,310.95 | 30,675.13 | 18.37 | |||||
| July | 33,745.73 | 28,158.31 | 19.84 | |||||
| August | 29,155.08 | 31,248.36 | -6.7 | |||||
| September | 34,654.15 | 24,523.26 | 41.31 | |||||
| October | 26,045.50 | 24,030.03 | 8.39 | |||||
| November | 23,056.88 | 28,985.11 | -20.45 | |||||
| December | 25,911.15 | 31,124.74 | -16.75 | |||||
| Total | 375,935.53 | 392,400.76 | -4.2 | |||||
Here it is also important to note that Delaware and Nevada decided to merge their player pools back in 2015 in an attempt to increase profitability. The shared liquidity agreement between the two states should be considered a very important move as it may have laid the foundations for more such agreements, when and if other US jurisdictions legalize and regulate online poker.
New Jersey
As reported by the New Jersey Division of Gaming Enforcement, online gambling was on the rise in the state in 2016. iGaming operations generated the total amount of $196.7 million last year, up 32.1% from 2015.
In New Jersey, too, online poker represents a fairly small portion of the overall online gambling revenue generated. In 2016, it accounted for around 14% of the bulk. Yet, it can be seen from the table below that last year was a good one for the state’s online poker operations. Full-year revenue increased 5.91% from the previous year, marking a good positive growth.
| Monthly Online Poker Revenue ($ million) | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2016 | 2015 | Change (%) | ||||||
| January | 2.15 | 2.3 | -6.44 | |||||
| February | 1.99 | 2.05 | -2.52 | |||||
| March | 2.46 | 2.05 | 20.3 | |||||
| April | 2.59 | 1.99 | 30.35 | |||||
| May | 2.57 | 1.93 | 33.34 | |||||
| June | 1.97 | 1.84 | 7.28 | |||||
| July | 2.01 | 1.89 | 6.7 | |||||
| August | 2.17 | 1.98 | 9.59 | |||||
| September | 2.02 | 1.77 | 13.89 | |||||
| October | 3.1 | 1.91 | 62.2 | |||||
| November | 2.08 | 1.96 | 6.44 | |||||
| December | 2.1 | 1.98 | 5.91 | |||||
| Total | 27.21 | 23.65 | 15.05 | |||||
The online poker proceeds rise was attributed to the launch of a PokerStars’ New Jersey website. The world’s largest poker room went live in the state in March. PokerStars indeed had a significant impact on New Jersey’s online poker market during its first months there but it is believed that impact will be reduced as time passes and initial interest wears off a bit.
Although no official data is released for Nevada’s market, it still can be said that of all three regulated states, New Jersey is probably the one to be doing best in terms of online poker performance. What is more, a quick look at PokerScout’s online traffic ranking shows that New Jersey’s poker website had a seven-day average of around 350 cash game players, compared to an average of 170 cash game players to have played on the Nevada/Delaware network.
