So Much For That UK Shared Online Poker Liquidity Deal In NJ

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Last year, the New Jersey Department of Gaming Enforcement and the UK Gaming Commission agreed to allow three gaming companies to have shared liquidity in their online poker operations. Now, the realities of the two markets have stalled the agreement from moving forward. There is no resolution in sight.

The three companies in question are Amaya, GVC, and 888. These three entities, which own Pokerstars, partypoker, and 888, respectively, have operations in both the UK and New Jersey.

The notion of shared liquidity is relatively simple. Shared liquidity means that players from different poker clients are pooled together, thereby increasing the overall money in play.

In other words, shared liquidity is a good thing for players and websites alike. However, due to the realities of New Jersey’s gambling laws, expanding the player pool is rather difficult.

New Jersey’s gambling laws are surprisingly specific

In the minds of most Americans, New Jersey is one of the first places to come to mind when the topic of gambling arises. For many years, Atlantic City was the gambling mecca for the eastern part of the country.

However, New Jersey is not a gambling haven outside of Atlantic City. The New Jersey Constitution specifically prohibits gambling anywhere beyond the city limits of America’s Playground.

Obviously, this statute means that companies must operate their casinos within Atlantic City’s borders. However, companies must also locate the servers for any online gambling within Atlantic City, too.

By locating the servers in Atlantic City, the law recognizes wagering as taking place inside Atlantic City’s borders. Therefore, online gambling is still legal under the New Jersey Constitution.

Atlantic City requirement turns off potential gaming partners for shared liquidity

However, this requirement is a deal-killer for expanding the player pool much beyond the borders of New Jersey.  Companies are unwilling to place the entirety of their online operation in one location because of the relative ease of server failure.

Many states either outright prohibit or have no specific laws on the legality of online poker. So, there is a crowded field of operators struggling to make a profit in New Jersey. The only other states in the US with legal online poker, Nevada and Delaware, have been unable to reach a deal with New Jersey to share player pools – despite having a similar deal between themselves.

The results are a dwindling player pool and shrinking online poker revenues. These revenue dips contrast with the overall online gambling revenue in the state, which is rising steadily.

State legislature may not see a problem until it is too late

Since the gambling laws are in the state constitution, it would take a constitutional amendment to make any changes to the situation. Unfortunately, time may run out on poker as a profitable proposition before such an amendment occurs.

For one thing, the legislature and Gov. Chris Christie are not on good terms. The partial government shutdown last month is evidence that a governor’s signature on a bill may be hard to get.

The second reason is, ironically enough, the growing gambling revenues outside of poker. Since the overall economic output is increasing, it will be very difficult to convince legislators that there actually is a problem.

These issues add up to a tough situation for the growth of online poker in New Jersey. However, nothing is ever set in stone, and it doesn’t hurt that the most recent WSOP Main Event champion is a New Jersey online poker professional.

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Bart Shirley

About

Bart Shirley is a writer and poker player from Houston, Texas. When he's not teaching high school math and business, Bart writes about the NJ online casino industry and US online poker. He has a master's degree in business administration from Texas Christian University and a degree in English from Texas A&M.