After a two year investigation, on September 30, 2015, the New Jersey Division of Gaming Enforcement granted PokerStars a transactional waiver, allowing the company to conduct online gambling in the state.
The licensure, and eventual launch of PokerStars, is expected to address a number of perceived problems holding the state’s online poker industry back. But will the addition of PokerStars really be different than the other supposed market solutions New Jersey has implemented?
Previous market solutions have been found wanting
PokerStars is far from the first online poker market solution in New Jersey.
Crackdown on affiliates and offshore sites
In May of this year the New Jersey Division of Gaming Enforcement sent cease and desist letters to offshore online poker sites, as well as the licensed affiliates that were promoting them. During the summer, the DGE doubled down on all affiliates, essentially forcing them to make a difficult, final decision between the regulated and unregulated markets.
The hope was this crackdown would curtail unlicensed operators, and it seems to have worked to some extent. Unfortunately, it doesn’t appear there were very many New Jersey players frequenting these sites, or if there were, they didn’t simply move to the state’s licensed online poker sites.
Payment processing improvements
In July of 2015, new MCC codes were developed for legal online gambling transactions, and in early September PayPal was added to payment processing options at several legal online gaming sites.
These developments were supposed to dramatically improve payment processing in the market. The impact they’ve had is marginal, and somewhat difficult to measure, considering sites also implemented other procedures at the same time, such as indicating which credit cards will be rejected at registration.
It’s hard to quantify the overall impact these improvements will have long-term, but short-term they haven’t produced any measurable results.
Why PokerStars can be different
The hope amongst the poker community is the addition of PokerStars will cause a more fundamental change, by increasing consumer awareness through new marketing efforts, and reengaging disillusioned players because of the company’s stellar reputation amongst poker players.
There is undoubtedly going to be a rush of players to the virtual tables when PokerStars launches. A number of poker players on 2+2 have indicated they’re sitting on the sidelines waiting for PokerStars to enter the market, and even PokerStars’ competitors are anticipating a marketing blitz unseen since the industry first launched in late 2013.
There is also PokerStars’ history to consider; the site has proven time and time again that it is able to get these things right, and have managed to quickly attain the number one spot in virtually every market it has entered.
However, it’s unclear how pronounced this rush will actually be, and thus far, almost everything that has to do with New Jersey online poker has been overstated. PokerStars could be the exception, but if PokerStars ends up being another PayPal or new MCC code, there is still one other potential market solution New Jersey can try.
Interstate is another potential market solution
The linking of Nevada’s and Delaware’s online poker platforms was supposed to modestly improve the liquidity in the two sparsely populated states. However, when all was said and done, the needle barely moved.
The reason the interstate agreement between Nevada and Delaware was unable to have an impact on overall liquidity appears to be one of numbers. Even combined, it appears the two states lack the player pool to entice players to the online poker tables.
However, if New Jersey and its nine million residents are involved it will have a far greater impact. Additionally, if Pennsylvania (population 12 million) can pass an online gambling bill, and enter into an interstate agreement with New Jersey online gambling sites, and (yes, another and) get its industry off the ground by the end of 2016, it would have an incredibly powerful effect on traffic for both states.
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