New Jersey Online Casinos Still Have Plenty Of Room To Grow In 2018 And Beyond

Growing NJ online casinos 2018

The narrative for New Jersey online casinos has done a 180.

Online gambling got off to a slow start in New Jersey. Instead of the promised panacea, the industry struggled to gain its footing during its first few months. Once it found its footing, things started to turn around. Online gambling been growing at a torrid pace.

Online gambling revenue in New Jersey has grown substantially each and every year, and at an astounding rate. In just four years the industry has doubled its revenue.

  • 2014 gross gaming revenue: $123 million
  • 2015 GGR: $149 million
  • 2016 GGR: $197 million
  • 2017 GGR: $246 million

As seen in the chart below, year-over-year growth has exceeded 20 percent in each of the past three years.

Not surprisingly, over that three year period, YoY revenue growth is on an upward trajectory.

Growth is trending downward

But it’s not all puppy dogs and rainbows.

As the three-year chart shows, 2016 growth was above the trendline in 11 of 12 months. In 2017, only two months landed above the trendline.

As the industry enters its fifth year new problems are beginning to present themselves.

  1. Stagnant/declining poker revenues;
  2. Market saturation;
  3. Market maturity;

When we zoom in on the last 12 months, we find that revenue growth at New Jersey online casinos is waning.

Are you ready for another growth spurt?

The New Jersey online gambling industry is maturing, and while growth has certainly slowed, the ceiling has yet to be reached.

January 2018 saw the industry set a new all-time revenue record, but it did so with just 17 percent YoY growth, well below its average.

Still, there are plenty of reasons to believe January is a jumping off point, and as 2018 progresses online gambling will eclipse 20 percent growth yet again.

The question is, where will that growth come from?

Interstate online poker

New Jersey agreed to join Nevada and Delaware in the Multi State Internet Gaming Association back in October. When New Jersey officially joins MSIGA, some operators will be able to pool online poker players across the three markets.

This liquidity boost could end the prolonged revenue slump online poker has been experiencing. It won’t be a game changer, but if New Jersey joins by June (in time for the World Series of Poker) an additional $200,000 month in online poker revenue isn’t out of the question.

Not only would that stop the bleeding (online casino revenue was up over 20 percent in January, but was dragged down by a lackluster month for online poker) it would be more than $1 million of added revenue for the state at the end of the year.

Improved payment processing

Payment processing has improved mightily since New Jersey’s online gambling sites launched in November 2013. Still, for as far as it’s come, payment processing continues to be a thorn in the industry’s side.

The good news is it’s still improving, albeit slowly.

More banks and credit cards are coming on board, and options like PayPal have been added at multiple sites.

Payment processing could see a big boost when Pennsylvania comes online, as the Keystone State will double the size of the legal market from 13 million US residents to 26 million. Further, as more and more sports betting, daily fantasy sports and online gambling legislation is passed, it becomes harder and harder for banks and credit cards to ignore the industry.

Increased awareness

Like payment processing, customer awareness of New Jersey’s legal online gambling options has been a slow slog.

But Pennsylvania provides hope on this front too. With Pennsylvania expected to launch at some point in 2018 there will be a marketing blitz in the Philadelphia TV and radio market; a market that extends far into New Jersey.

In addition to this increase in traditional advertising, companies are also utilizing new and innovative ways to market the state’s legal online games, such as Play USA’s Twitch stream that showcases the state’s legal online gaming options, and gives viewers a taste of new products like live dealer games.

Improved registration processes

Recent research into the efficacy of the online gambling registration process painted a very gloomy picture.

A blind survey of 2,164 current online gambling customers living in the UK, Ireland, Italy, Spain and Sweden was conducted by Harris Interactive in October 2017. The survey results were used in a Jumio report.

The respondents were asked to reply to the following statements about their onboarding experience:

  • I never have any problems opening an account to take part in online gambling.
  • It doesn’t take long to open a new account and start gambling online.

The choices they were presented with were:

  • Strongly agree
  • Slightly agree
  • Neither agree nor disagree
  • Slightly disagree
  • Strongly disagree

The results were downright shocking.

  • Eighteen percent strongly or slightly disagreed with the first statement and 16 percent with the second statement.
  • Only 23 percent of respondents strongly agreed with the first statement: “I never have any problems opening an account to take part in online gambling.”
  • Just 26 percent strongly agreed with the second statement: “It doesn’t take long to open a new account and start gambling online.”

The big takeaway is that in these European markets, only one in four customers experiences a seamless registration process.

That doesn’t bode well for legal US markets. US markets require potential customers to submit to a far more invasive player identification process that includes submitting their Social Security number. That’s not to mention that they’re hit or miss when it comes to payment processing.

Bottom line: There’s a high likelihood that even fewer US customers have a seamless registration experience.

If the market is going to reach its full potential, streamlining registration is a must.

The launch and expansion of new products

In addition to expanding their catalogs of slots and table games, New Jersey online gambling operators added some innovative products in 2017.

These products are doing a great job of expanding the customer base and keeping current customers engaged. In particular, live dealer games have been a boon for Golden Nugget.

According to Thomas Winter, the senior vice president of online gaming at Golden Nugget, live dealer games have increased Golden Nugget’s online table game revenue by 150 percent, since they’ve been offered.

“Out of our top ten games in wagering, four are live dealer tables,” Winter told Play NJ earlier this year. “We believe live dealer has the potential to become bigger than online poker in revenues in the US.”

Virtuals and hybrid games may not be as successful as live dealer games, but as these other products continue to gain exposure and expand to other online casinos, their revenue impact will only increase.

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New entries into the market

With two new casinos opening their doors in the Summer — Ocean Resort Casino and Hard Rock AC — expect both to set aside a significant amount of money to advertise their new online gambling products in the ultra-competitive market.

Both casinos have applied for online gaming licenses and seem to be taking the opportunity very seriously.

Although they’re likely to cannibalize existing operators to some extent, both should also expand the market, particularly Hard Rock since it will be drawing from a different customer database than many of the other Atlantic City casinos.

NJ sports betting?

One of the big unknowns in New Jersey is sports betting. If the US Supreme Court rules favorably in the current case involving NJ, and the state decides to green-light online wagering, New Jersey online gaming operators could be offering sports betting by the time football season rolls around.

Unfortunately, it’s unlikely online sports betting revenue would fall under the umbrella of online gaming revenue. More likely, it will be lumped in with NJ sports betting revenue.

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Steve Ruddock


Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.