- Legal States
Mike Johnson February 1, 2019 3 min read
New Jersey’s Online Poker Industry Struggles in 2018
Poker has been struggling in New Jersey, both online and offline, pointing to a rather slow business for operators and serving as a warning to neighboring Pennsylvania that legalizing this segment might not bring in the financial dividends the state had hoped for.
The Declining Poker Climate in New Jersey
New Jersey has experienced slight turbulences in its poker industry all throughout 2018. Nearly every month of the year came along with dip in the year-over-year and month-over-month results.
In November, the New Jersey Department of Gaming Enforcement released figures about the state’s online poker, among other segments. While sports betting has been doing fine, poker suffered.
The results were a nearly 1% decline in the month-over-month revenue, with the total dip in the year-over-year handle down 14.5%. It was a worrying trend, not only for the state itself, but for neighboring Pennsylvania as well.
By the end of 2018, though, this result improved slightly with the total decline being just shy of 14%. In financial terms, New Jersey failed to collect $3 million it did in 2017, leaving 2017 as one of the poorest in terms of poker action.
Should a Slow Poker Year Dissuade Pennsylvania from Adopting It?
Pennsylvania as a state has little against adopting the segment. Licenses are already available, but the decline in New Jersey should warn PA’s own operators to the dangers of launching multiple segments at once.
So far, there have been seven brands(with a few others down the pipeline) that have applied for their own online poker licenses, suggesting an over-saturated market as it is:
- Harrah’s Philadelphia
- Hollywood Casino at Penn National Race Course
- Mount Airy Casino
- Parx Casino
- Sands Bethlehem
- SugarHouse Casino
- Valley Forge Casino
Many operators have been confident that they would be able to join a larger pool of players, i.e. the shared-liquidity scheme between New Jersey, Nevada, and most lately Delaware. Things now look a little different after a recent decision by the Department of Justice (DoJ).
The DoJ’s Reversal of Opinion Is Bad for Online Poker
Poker’s struggling pretty much all by itself, although while New Jersey’s trade may be down, it doesn’t necessarily rule out success in the other two states sharing liquidity. Nevada did slightly better by mid-2018 than NJ, for example.
Now, DoJ’s reversal of its 2011 decision will imperil the existence of the shred-liquidity scheme, as transactions across states will not be allowed under the act, which will kick off by mid-March, giving DoJ attorneys the legal measures to challenge cross-state online gaming activities.
Given federal pressure, payment processor may also start opting out of offering their services to gaming websites, not least because of a lurking fear about Unlawful Internet Gambling Enforcement Act (UIGEA).
Trouble seems to be brewing for New Jersey’s online poker industry. With enemies in all the high places, the states that want to maintain their online poker industries may need to lawyer up.
At what cost, though?