New Jersey Online Poker Plumbs New Depths in September 2018

Those following the revenue numbers coming out of New Jersey have become accustomed to seeing its year-on-year poker figures slide relentlessly each month, while the market’s online casino segment continues to reach new heights.

While last month was no exception, the poker segment did, however, plumb a new low after generating a mere $1.6 million in September, down by 15.4% compared to the same month in 2017, and less than the previous revenue trough of $1.73 million set in June 2017. Meanwhile, online casinos went in the complete opposite direction and saw its business soar by 30.6% year-on-year to $24.1 million, with that number representing a new all-time peak for the Garden State.

Poker Market Downswing

In December 2013, New Jersey launched its online gambling market, and in 2014, its first full year of operation, online poker produced $29 million in revenue, which is still an annual record for the vertical. In 2015, that figure subsequently fell to just $23.8 million, and despite posting a slight improvement to $26.5 million in 2016, last year saw the market decline once more, this time by 8.5% to $24.25 million.

MSIGA Not Working

In an effort to plug a hole in its sinking iPoker market, New Jersey agreed to throw in its lot with Nevada and Delaware by becoming part of a tri-state liquidity network in May. Unfortunately, brands operated by the Nevada based Caesars Interactive Entertainment, which includes 888 Poker and WSOP.com sites, are the only ones able to extend their services across all three states, meaning none of the other operators are able to benefit from the Multi-State Internet Gaming Association (MSIGA).

As a result, the shared liquidity agreement has done absolutely nothing to help grow the market, but has instead helped Caesars rise to the top of New Jersey’s online poker market, to the detriment of the previous top license holders, Resorts AC (Resorts, Mohegan Sun, PokerStars NJ) and Borgata (Borgata, PartyPoker, Pala, MGM).

September Poker Slide

This has been borne out by the string of results reported since May, and for the first nine months of 2018 online poker revenues are currently lower by 11.7% at $16.4 million. Needless to say, barring a miraculous turnaround, the state’s online poker market looks well and truly on course to post its worst annual performance ever by the year’s end.

Interestingly, even Caesars saw its month-to-month poker revenue decrease in September, although the $671,315 it  collected was still the most of any of the state’s three licensed online poker networks. By contrast, the Resorts/PokerStars online poker collaboration saw their year-on-year business shrink by 24% to just $539k, while Borgata reported a 37% decline to around $400k.

Online Gambling Soars

Fortunately, online poker commands only a paltry 7.5% share of New Jersey’s overall online gambling market, down from around a 25% share back in 2014. On the other hand, online casinos have continued to see their popularity grow and in September it generated 30.6% more year-on-year revenue at $24.1 million, meaning online gambling as a whole was also up by an impressive 26.3% to $25.75 million. In addition, that amount marked a 7.3% improvement compared to the previous month.

Gambling Market as a Whole

Including revenue from land-based operations, Atlantic City’s nine casinos posted an impressive 19.5% revenue increase to $281.7 million in September versus the same month last year. From that tally, slots saw their revenue rise by 8.6% to $166.8 million, and table games by 5.5% to $65.2 million, with the remaining amount accounted for by online gambling ($25.7) and sports betting ($24m).

That said, the addition of two new land casinos in June appears to have put some extra pressure on Atlantic City’s other operations. While the Hard Rock Atlantic City ($25.9m) and Ocean Resort Casino ($14.9m) collected a combined $40.8 million in September, six of the state’s seven casinos reported year-on-year declines, with only the Tropicana bucking the trend by reporting a slight 0.5% revenue gain to $29.9 million.