New Jersey Online Poker Revenues Stagnate

Online poker game in New Jersey

Even as New Jersey’s online gambling revenues continue to climb, its online poker industry faces decline. Experts pointed to several reasons for iPoker’s issues in New Jersey, but the biggest problem is the federal government’s new policy on interstate online poker. Under a new DOJ opinion, New Jersey soon will not be able to share player pools with Delaware and Nevada.

Though the policy has not taken effect, Atlantic City casino marketing executives know the truth. Consequently, they are not marketing the online card rooms the way they once did.

Overall, the state’s online casino industry generated $39.1 million in revenue in March 2019, which equals 53% growth year-to-year. The daily online poker revenues declined, though.

A cursory glance shows that the $1.9 million in revenues were better than the previous month when online poker posted $1.81 million. But March had 3 more days than February, so the average daily poker revenues dropped 5%.

Two main reasons exist for the decline. First, the presence of online sports betting helps the casino side and hurts the poker side.

Reasons New Jersey Online Poker’s Declining

Sports bettors might be professional handicappers who know gambling well, but most new bettors are casual sports fans. That drives revenue for New Jersey gaming operators, while sending more casual players to the online casinos.

It does not translate to online poker, though. Poker is a game of skill, so many sports bettors prefer games of chance to poker. A second reason exists.

DOJ Opinion Hurts Interstate iPoker

Second, the US Department of Justice changed its opinion on the legality of interstate online poker. Starting on June 14 (original April 15), it will be illegal for online card rooms to share player liquidity with other states.

In late 2017, New Jersey signed the Multi State Internet Gambling Association (MSIGA). Signing onto the poker compact allowed New Jersey to share player pools with Nevada and Delaware. The Garden State’s entry to MSIGA came two months after Pennsylvania legalized online poker, so the strategy was to access Pennsylvania’s large poker community.

Bigger player pools mean events with more entries. That means bigger guaranteed prizes and bigger 1st place jackpots. Therefore, even more players join a tournament, which only swells the prize pool and jackpot.

MSIGA Undermined by Wire Act Opinion

At a point, a critical mass happens and truly big poker events become possible. New Jersey, Pennsylvania, Delaware, and Nevada would total more than 25 million players, more than all of Australia and two-thirds the population of Canada. The MSIGA was on the verge of truly large player pools.

The January 2019 DOJ opinion thus undercut New Jersey’s long term strategy for online poker growth. Yes, the changes have not come into effect. Cardplayers can still play in events with Nevada’s and Delaware’s player pools.

Online Poker Marketing Declines

But that overlooks several factors. New Jersey poker sites realize the end is coming soon, so their marketing budgets account for that and less is spent marketing online poker.

Also, organizers know it makes no sense to try to build a greater poker community, so they don’t organize big spring poker tournaments like they once might have. In short, everything is different from the spring of 2019 to the spring of 2018.

New Jersey Sports Betting Growth

Most of that energy now is going towards the New Jersey sports betting industry. The state’s online sports betting industry generated $24.2 million — more than 12x online poker.

Meanwhile, New Jersey is closing in on Nevada for sports betting dominance. Nevada’s turnover for March 2019 was $484 million, while New Jersey’s was $372 million. But that’s $372 million and growing.

It’s only a matter of time before New Jersey’s larger population and proximity to New York and Philadelphia wins out. With that in mind, Atlantic City casinos are not focusing as much on their online poker products.

Cliff Spiller

Cliff Spiller

Cliff Spiller has been an online writer for more than a decade. He worked for Small World Marketing for years, where he covered topics like gaming, sports, movies, and how-to guides. He's covered US and international gambling news on BestOnlineCasinos.com, USPokerSites.com, and LegalUSPokerSites.com since 2014.

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