New Jersey Losing Out in Shared Online Poker Liquidity Pact

New Jersey had long resisted the offer to join Nevada and Delaware’s Multi-State Internet Gaming Association (MSIGA), but finally caved in after seeing its online poker market decline by 8.5% to $24.25 million in 2017. On May 1st, 2018, operators in all three states then started combining their online poker player pools, in the process creating a potentially more attractive environment for its players.

With three months results collected, however, the news has been rather disappointing for The Garden State, whose online poker market has registered little positive change and has continued on its downward trajectory.

NJ’s Stagnating iPoker Market

The MSIGA’s launch heralded an increase in the network’s combined player pools, meaning more tournament and cash games running, as well as extended peak hours for poker fans. Nevertheless, New Jersey has failed to see an influx of new players entering the market, or even an uptick in play by its existing customers.

In May, for instance, New Jersey’s online poker market generated $1.9 million in revenue, or 9% less compared to the same month in 2017. June brought a slight hint of optimism after revenue improved slightly by 1.2% to $1.757 million, but in July business continued to slide with its $1.85 million in earnings down by 8% year-on-year.

Highlighting further the failure of the MSIGA to boost New Jersey’s online poker market, in 2017 the state recorded five months with revenues in excess of $2 million, but this year has been unable to hit that level even once. Needless to say, the merger has thus far not gone quite as analysts and optimists had originally expected.

What it has done is alter the landscape of the New Jersey market, though. Prior to the MSIGA, New Jersey’s online poker market was dominated by PokerStars and then Borgata, while Caesars brought up the rear. That all changed in May after Caesars, which operates 888 Poker and WSOP.com sites, knocked PokerStars off its top spot for the first time since its New Jersey launch back in April 2016.

Since then, Caesars’ poker share has continued to soar and in July it generated $727,842 in revenue, accounting for 40% of the overall market. In the meantime, PokerStars and Borgata have seen their numbers dwindle, posting their worst ever results in June, while the $653,107 and $468k they collected respectively in July extended further their stretch of year-on-year declines.

Why’s the MSIGA Ineffectual?

One of the reasons cited for the dismal numbers is the uneven form the current liquidity pact takes. While New Jersey agreed to share its players with Nevada and Delaware, the only poker operators able to take advantage of the compact is 888 Poker and WSOP.com as it is the sole partnership with coverage across all three states. PokerStars and Partypoker, on the other hand, are currently restricted to just New Jersey and so are unable to compete against Nevadans or Delawareans.

A number of other factors have also been suggested for the shared network’s inability to alter New Jersey’s traffic numbers. Nevada (3m) and Delaware’s (962k) combined population of roughly 4 million people, for instance, may not be big enough to allow New Jersey’s internet poker market to reach critical mass and attract new players. This would suggest that Pennsylvania, the country’s fifth most populated state, might provide just the catalyst needed to ultimately tips the balance if it eventually joins the MSIGA at some stage in the future.

It has even been suggested that players in Nevada are likely to be more proficient at poker than their New Jersey counterparts, and so Nevadan and Delawareans are currently enjoying softer games, whilst New Jersey players are now finding games post-MSIGA a lot tougher. Another simpler explanation may be that New Jersey residents are not particularly impressed by WSOP.com, and are instead preferring to stay with the PokerStars or Partypoker brands which they have grown accustomed.