Since launching in November 2013, the New Jersey online gambling industry has produced plenty of surprises.
Some have been good and some have been bad. Here are my picks for the ten most surprising developments thus far.
#8: Ultimate Gaming’s quick demise
Ultimate Gaming was the one product that really went for it in the legal U.S. markets.
On top of creating its own proprietary software, the company hired well-known poker pros to rep their brand including Jason Somerville and Antonio Esfandiari. Ultimate also focused on often-overlooked areas such as customer support and innovative marketing, including cross-marketing with the UFC.
However, its software platform was simply not up to industry standards, and all the great ideas and money in the world wasn’t going to save it. Less than a year after launch, the company abruptly left New Jersey.
At first Ultimate blamed its New Jersey withdrawal on the struggles of its iGaming partner, Trump Taj Mahal, but the company’s subsequent closure in Nevada made it clear that the company was going to fail on its own merits.
#7: Golden Nugget’s climb to the top
The ability of Golden Nugget to surge to the top of the New Jersey online casino market in terms of revenue snuck up on a lot of people, as not much was expected from what was at the time considered to be little more than a passable casino in Atlantic City.
Golden Nugget is far from a world-beater in Atlantic City, considering GGR for 2013 was $124 million, almost half of $228 million earned by Tropicana, and about a fifth of the $616 million the Borgata marked up.
On top of that, Golden Nugget partnered with an unproven online gaming platform provider in Bally Technologies, which was on full display when technical difficulties led to a two-week delay in launch.
#6: All NJ online casinos aren’t the same
Since the outset there has been a huge discrepancy between the top and bottom online poker sites in New Jersey.
In January of 2014 Borgata tallied $1.8 million in online poker revenue, while Betfair’s online poker platform pulled in $11. Ultimate Poker tallied about $88,000 in January of 2014, while Caesars had over a million in revenue.
On the other hand, it seems as though New Jersey residents feel all online casinos are virtually the same. The reason I say this is every online casino that has launched to date has been able to gain a decent market share in very little time.
Regardless of brand – or launch date – online casinos simply perform well in New Jersey.
The takeaway from this is it seems like online poker players are very discerning and look at each operator individually, while online casino patrons have a more ambiguous view of the different platforms – a slot is a slot and a blackjack table is a blackjack table.
#5: iPoker’s struggles
Betfair’s nonexistent monthly revenue forced the company to close its New Jersey online poker room soon after its moved to Golden Nugget.
Ultimate Poker’s online poker product was a major factor in the company’s undoing in New Jersey.
Monthly revenue from the all of the industry’s online poker platforms has been cut by 47%, from a peak of $3.4 million in January of 2014 to $1.8 million in June of 2015.
At the same time online casino revenue is posting double-digit year-over-year gains virtually every month.
It’s becoming quite clear that the two industries, online poker and online casino, are altogether different.
#4: PokerStars’ failure to launch
O’ PokerStars, O’ PokerStars. Wherefore art thou PokerStars?
So far the online poker giant has been stymied in its attempts to enter the New Jersey market, beginning with a failed attempt to purchase the now-closed Atlantic Club Casino.
When its licensing application was suspended in December of 2013 (following a partnership with Resorts Casino) the company moved on to Plan C for U.S. market entry, the sale of PokerStars to Amaya Gaming.
Following the sale to Amaya, it looked like PokerStars would soon have its coveted New Jersey license, but unspecified delays have PokerStars still on the outside looking in a year later.
However, it now appears that its licensing is just around the corner.
Unfortunately, we’ve heard this before. So I’ll believe it when I see it.
#3: People taking early predictions seriously
Chris Christie’s prediction for the New Jersey online gambling industry was over a billion dollars in revenue in its first year. This prediction occurred before the industry launched back in 2013, and even then it was viewed with a very skeptical eye.
Yet the media continued to use these predictions to gauge the industry’s performance.
Unsurprisingly, New Jersey only brought in one-tenth of Christie’s estimate, which opened the floodgates for criticism.
#2: Ability to crack down on offshore sites
One of the most pleasant surprises so far has been New Jersey’s ability to crack down on offshore sites, and they’ve even been able to go after licensed affiliates that continue to promote illegal gambling sites.
Virtually every offshore online poker provider has left the New Jersey market, and a recent edict by the NJ DGE has forced all online poker affiliates in the U.S. market to make a tough decision.
#1: Caesars’ middling performance
Caesars started the iGaming era with four casino properties in Atlantic City (a number now reduced to three following the shuttering of Showboat in September) and was partnered with a proven, fairly well-known, online gaming company in 888.
The company also deployed the most powerful brand in poker the World Series of Poker, which had run the WSOP.com free-play online poker room for several years.
The stars seemed aligned for Caesars in New Jersey.
Yet Caesars has lagged behind Tropicana, Golden Nugget, and Borgata in terms of New Jersey online casino revenue, and has been unable to catch Borgata when it comes to iPoker revenue.
Of all the remaining online gaming operators, Caesars has performed well below expectations.