The New Jersey Division of Gaming revealed November’s gaming revenue figures last week. The results were depressing for the state’s online gaming industry, as online poker revenue hit a new all-time low, and online casino revenue was crippled by a $1.3 million jackpot hit on HarrahsCasino.com.
Online poker sets a dubious record
The two remaining online poker operators in the state, Caesars and Borgata tallied just $1,877,603 in total revenue in November, marking the lowest tally since the state launched online gaming last year. The continued decline of the market may be a sign that the steady growth promised through market maturity is not going to happen.
Online casino’s costly jackpot
Online casino revenue didn’t perform much better, although for different reasons, as the massive $1.3 million jackpot hit at HarrahsCasino.com cut into the monthly take. The payout kept online casino revenue at just $6,861,295 – Caesars total online casino revenue was a mere $221,516, down from over $1.5 million in October.
Overall, online gaming in New Jersey totaled just $8,738,898 million; the lowest total in the state since December of 2013, which was New Jersey’s first full month of online gaming.
However, if we include the $1.3 million jackpot, the industry still eclipsed the $10 million mark, which seems to be the current point of delineation between good and bad months.
While the casino drop-off can be linked directly to the massive jackpot paid out in November, when it comes to the declines in online poker revenue in New Jersey, several factors could be at work.
Payment processing still an issue
The simplest explanation for the decline is a logistical one. If online poker players cannot move their money on and off the sites they simply can’t play.
In New Jersey, payment processing has been hit or miss all along, but it should be noted that online poker revenue has steadily declined (despite expectations of the historical seasonal bump and the aforementioned market maturity) since TD Bank stopped processing online gaming transactions in late September/early October:
- September: $2,085,295
- October: $1,967,905
- November: $1,877,603
How big of an impact could this have been? According to Gambling Compliance’s Chris Krafcik, TD Bank was handling 40% of the online gambling credit card volume in the Garden State:
— Chris Krafcik (@CKrafcik) November 13, 2014
Loss of Ultimate Poker
Another potential reason for the continued decline of the online poker market in New Jersey was the closure of Ultimate Poker.
It’s hard to tell based on the data we have from the DGE and available through PokerScout.com, but at this time it doesn’t appear that displaced Ultimate Poker landed at Borgata or Caesars online poker rooms (or perhaps they were already registered at these online poker rooms in addition to Ultimate), as the $25,00-$30,000 of revenue the site was generating in its final months was lost, along with a further $100,000 or so.
Ultimate didn’t have a lot of players (especially at the end) but there were enough players still using the site, particularly in Ultimate Poker’s tournaments, that we should have seen some kind of bump in cash-game traffic and/or tournament entries following the site’s closure.
Unfortunately, it seems Ultimate Poker’s players simply disappeared into the ether.
The war of attrition
Another potential culprit is simply attrition.
There was a rush to the online poker tables when they first launched in New Jersey, and the natural attrition rates of online poker coupled with the numerous issues players faced (from payment processing, to disconnections, to lackluster software, to intrusive player verification procedures) may have caught up to the operators in the state.
Unlike a global market, it’s much harder to replace players in a small isolated market, and most of the players who had a fleeting interest in online poker have likely already come and gone.
Once again, it seems market maturity may bring about a decline and not the expected growing player base.
The bright side: Is there one?
In previous months I would have now pointed to the impending launch of PokerStars, or PayPal’s hinted return to online gaming, or the soon to be unveiled new credit card merchant codes as reasons for optimism moving forward.
But with Amaya/PokerStars running into a (minor) snag with Canadian authorities, PayPal’s return still in the rumor stage, and the uncertainty as to the impact the new credit card codes will have, I think it’s time to just settle in for the long haul and be thankful there is online gambling in New Jersey and that it’s generating about $10 million a month in revenue.