Having sprung into being on Nov. 21, 2013, the New Jersey online gambling industry is about to celebrate its fifth birthday.
It’s safe to say that five years in, online gambling is flourishing in the Garden State.
The industry is on pace to tally $1 billion in lifetime revenue by the end of 2018 and will have sent roughly $175 million to the state in the form of tax revenue during that time.
The industry is also on pace to generate more than $250 million in 2018 alone. That’s more than double what it generated during its first full year in 2014 when it was prematurely deemed a failure by detractors.
In this column, we will reflect on the past five years and some of the moments that helped shape the NJ online casino market into the juggernaut it is today.
New Jersey’s aggressive timeline
New Jersey did things differently right out of the gate.
Instead of letting operators set their own timeline, New Jersey settled on a synchronized launch date that all operators would abide by.
That all but eliminated operators dragging their feet (as we’re seeing in Pennsylvania’s licensing process), or rushing a not-yet-ready for primetime product to market in an effort to be first in order to gain a competitive advantage.
New Jersey’s online gaming industry went from law to launch in just nine months. That’s a feat that deserves a lot of praise, as it’s something we may never see again in another jurisdiction.
The launch wasn’t without hiccups, but overall it was a rousing success. There were zero significant issues reported, and only a single operator (Golden Nugget) failed to make it through the soft-launch testing period.
Letting the regulators regulate
Another decision that has paid off in big ways is New Jersey’s empowerment of regulators.
Neither the state nor its regulators painted themselves into a proverbial corner by regulating through legislation or by adopting set-in-stone regulations that would be difficult to revise down the road.
That has allowed the New Jersey Division of Gaming Enforcement to change and adapt to whatever has been thrown at them. That includes everything from new products (virtual sports, live dealer games, and DFS hybrids) to the vetting and approval of new operators such as PokerStars NJ.
The DGE also did a great job getting itself up to speed on what was to them a new, untested industry.
You’d be hard-pressed to find a regulatory body with a better understanding of online gambling anywhere in the world.
It’s also clear that the regulations work, considering:
- Ultimate Gaming’s demise: A test that the legal market passed with flying colors.
- The DGE’s ongoing crackdown of offshore operators.
Opportunities abound for NJ online gambling
As the industry began to hit its stride in 2015, a second wave of operators rushed to New Jersey. That’s not unlike the prospectors of old that rushed to California in 1849.
Whether they were Atlantic City casinos, international poker giants, or out-of-state casino operators, most have found success in the NJ online gambling market, including key players like:
- Resorts and Mohegan Sun
- Pennsylvania-based SugarHouse Casino
- Pala, a California gaming tribe
All told, the number of sites and brands in the online gambling space has nearly doubled (from 10 to 19) since launch:
|NJ online casinos 2013||NJ online casinos 2018|
|Ultimate Gaming||Golden Nugget|
One casino separates itself from the pack
Around the same time that new operators were jumping into the NJ online casino market, one of the existing operators began to separate itself from the pack: Golden Nugget. And once it began to pull away from its competitors, Golden Nugget never looked back.
Since the start of its meteoric rise in 2016, Golden Nugget went from the back of the pack, to competitive, to leader, to lapping the field.
Golden Nugget’s path to the top of the New Jersey online gambling industry is a product of its team, headed by Thomas Winter.
Under Winter’s stewardship, the Golden Nugget online casino:
- inked strategic partnerships with Betfair and SugarHouse.
- was the first US online casino to offer live dealer games.
- maintains the largest catalog of games in the NJ online casino market
All of those things have Golden Nugget rapidly approaching $10 million in monthly revenue in the very competitive New Jersey market. By way of comparison, no other online casino has cracked the $5 million mark.
The NJ sports betting era begins
In its first few months, online sports betting is already proving to be very popular, accounting for more than 50 percent of all sports wagers in the state.
Going forward, online sports betting will swell the state’s online casino and poker numbers.
What does the future hold?
The coming years are likely to bring more of the same.
The NJ online casino industry shows no signs of slowing down, and with the addition of online sports betting, the NJ online gambling experiment has been a complete success.
The New Jersey model has proven effective, and other states would be wise to follow in New Jersey’s footsteps.