New Jersey Online Poker Traffic Settles As Summer Draws To An End

Posted By Steve Ruddock on September 6, 2016 - Last Updated on September 5, 2016

[toc]Online casinos got off to a slow start in New Jersey, but nearly three years after launch, the state’s online casino industry continues to grow and mature.

On the other hand, the state’s online poker industry has had the opposite experience. Online poker jumped out to fast start before crashing back to earth and languishing at about 60 percent of its early peak month after month.

Granted, online poker got a shot in the arm when PokerStars launched in March. But like the industry’s fast start, the PokerStars bounce was short-lived, and traffic and revenues have both reverted back to pre-Stars levels.

As August came to a close, New Jersey’s online poker industry appeared to be settling into a predictable pattern, with monthly revenue around $2 million and average cash game traffic in the 300-325 player range industrywide.

The fleeting PokerStars bounce

With the launch of PokerStars in March, the proverbial apple cart was upset in New Jersey.

The existing online poker operators, 888 and partypoker, saw their traffic plummet, and PokerStars quickly ascended to the top of the online poker cash game traffic rankings.

However, PokerStars’ market share wasn’t solely built by cannibalizing the other operators; it also grew the market’s cash game traffic year-over-year during its first few months.

Average cash game traffic industrywide

  • Feb. 29, 2016: 333 (YoY: 381, -12.5%)
  • March 31, 2016: 426 (YoY: 339, +20%)
  • April 30, 2016: 364 (YoY: 289 + 20.5%)
  • May 31, 2016: 322 (YoY: 293, +9%)
  • June 30, 2016: 292 (YoY: 286, +2%)
  • July 31, 2016: 314 (YoY: 307, +2%)
  • Aug. 31, 2016: 293 (YoY: 294, 0%)

NJ avg cash game traffic

The launch of PokerStars also brought about a similar industrywide revenue boost:

NJ online poker revenue chart

But, as the chart and data above demonstrate, within three months of its launch PokerStars had already fallen back to earth, and the industry reverted to where it was before PokerStars’ launch.

Upshot #1

For the New Jersey online poker industry, the PokerStars “bump” was short-lived — three months to be exact — and the same amount of revenue is now being divided three ways instead of two.

Upshot #2

This development may be good for competition, but it does put all three operators on shaky footing, and likely limits marketing opportunities. As it stands, it’s unclear if it would have been better for New Jersey had PokerStars forced one of the existing operators to close up shop and battle head-to-head with the survivor.

Where the individual operators stand

888 and partypoker have not only weathered the storm, but it now appears they’re ready to give Stars a run for its money as the top dog in the New Jersey market. This is particularly true of 888, which has overtaken PokerStars in terms of cash game traffic, and perhaps revenue.

We’ll find out when the New Jersey Division of Gaming Enforcement releases the August New Jersey online gambling revenue numbers.

Traffic

PokerStars only held the top traffic spot for six days in August (the period from Aug. 6-11), with 888 outpacing it handily for the majority of the month.

For comparison, from March 23 through July 16 PokerStars was the traffic leader for all but six days.

Average online cash game traffic numbers from PokerScout.com
August 1 August 15 August 31 August floor August ceiling
PokerStars 115 119 106 106 137
888 129 127 131 120 134
partypoker 69 65 62 62 73

Another trend to keep an eye on is the higher volatility of PokerStars’ cash game numbers. Throughout August, partypoker’s average cash game traffic fluctuated by 15 percent. 888’s average cash game traffic also fluctuated by about 10 percent in August.

On the other hand, PokerStars’ average cash game traffic is in more of a state of flux, with a 23 percent change between its high and low cash game traffic averages during the month of August.

[show-table name=cta-tropicana]

Revenue

When it comes to revenue — yet another metric we have at our disposal thanks to the New Jersey DEG’s monthly revenue reports — PokerStars holds a significant, but not insurmountable, lead over 888 and partypoker.

The July revenue tallies were:

When we compare this to the tallies in previous months you can see the gap between PokerStars and partypoker and 888 narrowing.

June 2016:

  • Borgata iPoker: total revenue = $589,022
  • Caesars iPoker: total revenue = $602,103
  • Resorts iPoker: total revenue = $778,070

May 2016:

  • Borgata iPoker: total revenue = $731,863
  • Caesars iPoker: total revenue = $687,287
  • Resorts iPoker: total revenue = $1,151,703

April 2016:

  • Borgata iPoker: total revenue = $745,819
  • Caesars iPoker: total revenue = $664,189
  • Resorts iPoker: total revenue = $1,177,837

A look at market share further emphasizes this narrowing gap between the online poker operators:

April 2016 May 2016 June 2016 July 2016
PokerStars 45% 45% 40% 37%
888 26% 27% 31% 33%
partypoker 29% 28% 29% 30%

Upshot #3

PokerStars’ bounce and quick rise appear to be a product of customer curiosity rather than a true growing of the market.

Upshot #4

As we’ve noted in the past, existing land-based brands have been able to overcome the strongest New Jersey online casino brands, and even the almighty PokerStars has proven quite mortal in New Jersey.

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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.

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