How Interstate Agreements Help Industries Like NJ Online Poker Stay Afloat

Written By Dan Holmes on November 24, 2023
man plays online poker, which is strengthened by interstate agreements

We’ve hit 10 years of legal online casino gambling in New Jersey.

For most of that time, New Jersey was alone in that regard. Now, with NJ online casinos and NJ online poker the resident seniors, five other states have joined the legal online casino game.

And while in a vacuum that would be a small sample size, there now appears to be enough historical data for analysis of how online poker is performing. Some of the results are surprising – and could point to the need for interstate gaming agreements.

When we look at the trailing 12-month online poker share by state, a pattern emerges that at face value seems odd: The largest state by population does not rank first in market share of online poker play.

How NJ poker compares with Pennsylvania, Michigan

For the previous 12 months, through September, the top three online casino states were Michigan, Pennsylvania and New Jersey. In terms of adult population however, Pennsylvania has nearly 2.5 million more eligible online poker players than Michigan.

Indeed, according to Eilers & Krejcik Gaming Online Casino Monitor, Michigan is outpacing the more heavily populated Pennsylvania in online poker based on percentage of adults who are playing the game online:

  • Michigan (7.48 million): 29%
  • Pennsylvania (9.78 million): 28.89%
  • New Jersey (6.91 million): 26.59%

This trend has been shifting in favor of the Great Lakes State. In June, based on adults in each state, Pennsylvania owned a 30% market share, followed by Michigan (28.7%) and New Jersey (25.8%).

Collaboration helps build stronger markets

As recently as March 2023, Pennsylvania reported a market share of 33%. Why has Michigan surpassed PA? Why has online poker share in Pennsylvania been dropping in the last few months? And how does New Jersey factor into all of this?

The answer lies in collaboration.

Starting Jan. 1, 2023, Michigan and New Jersey began pooling their online poker players via the PokerStars network. As a result, those two states are seeing a growth in their market share based on the number of adults in their respective jurisdictions. Meanwhile, Pennsylvania has not opted to allow their poker players to pool with co-ops like PokerStars. At least not yet.

When measured strictly on a per-adult basis, New Jersey surpasses Michigan, which has about a half-million more adults in its state. The Garden State collaborates with two other states, Delaware and Nevada, in a cooperative player network for online poker games. That means New Jersey residents have two ways to play poker online against players from three other states.

Of the six states with active legal online casino gaming (Delaware, Nevada, Michigan, New Jersey, Pennsylvania, West Virginia), only four allow online poker across state lines with other players: Delaware, Nevada, New Jersey and Michigan, which now has the largest online casino market based on gross revenue.

Interstate agreements good for online poker and iGaming

When multiple states collaborate to run online poker games for their players, it provides a better experience for the consumer. The main benefits are:

  • Larger tournaments
  • Bigger prize pools
  • Better consistency and reliability of gameplay

The Multi-State Internet Gaming Agreement (MSIGA) is the mechanism by which the participating states agree on the rules and regulations for online poker. Nevada, Delaware, Michigan, and Pennsylvania have agreements under MSIGA.

Through a gaming platform like BetMGM Poker NJ– which is also available in Michigan and Pennsylvania – players from multiple states can compete in games. This leads to more excitement, and potentially larger prize pools. PokerStars NJ also has agreements under MSIGA.

Other states that currently have online gaming – like West Virginia and Pennsylvania, which has the largest population of legal states – are missing out on better online poker markets by not participating in multi-state games. Pennsylvania would need to amend its laws to permit interstate poker games for its citizens.

Not only would the product of online poker be better in Pennsylvania if that state joined MSIGA, it would raise the level of play and prize pools in New Jersey, Michigan and other participating states. By adding more players who could be enticed by bigger prize pools, Pennsylvania could also raise its tax revenue from online gaming.

Photo by Julie Jacobson / AP Photo
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Dan Holmes

Dan Holmes is a contributing writer for PlayNJ. He has written three boooks about sports and previously worked for the National Baseball Hall of Fame as well as Major League Baseball. An avid writer, runner and enjoyer of lemon bars, Dan lives near Lake Michigan with his daughters and, oftentimes, a nearby orange cream soda.

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