Regulated online poker in the state of New Jersey is now one year old and it’s been a bumpy ride. Regulation began in November 2013 and although it may have been of some financial assistance to the struggling casinos of Atlantic City, it has been a tad underwhelming to say the least.
Launched as what many people saw as a huge part of the future and rebuilding of the New Jersey gambling industry, online poker and casino have simply failed to make the grade, with just over 10% of projected revenues actually materializing. Gov Chris Christie was hoping for around $1 Billion in first year revenue however the first year figure actually stands at $111 Million, and during that first year of regulated online gambling we’ve also seen the closure of four Atlantic City casinos. We also saw Ultimate Gaming leave the New Jersey market, quickly followed by their departure in Nevada too, stating an unworkable market as their reason.
David Rebuck director of the state Division of Gaming Enforcement does however point to some of the positives stating that, "From a regulatory standpoint, it's working really well, without any catastrophes, meltdowns or scandals. On the negative side, it was projected to be a much stronger financial performer." NJ online gaming got off to a bad start with geolocation software not functioning correctly and although that matter seemed to have been addressed pretty quickly, the major issue has no doubt been the reluctance of banks to authorize credit card transactions to the gaming portals. The fact that online gaming is 100% legal seems to mean nothing to the banks whose strict policies mean that a huge percentage of cards give their owners the dreaded declined message.
There is no sign of banks changing their stance on this issue, even though many meetings have taken place, and it looks very much like that will again be the issue as we move into the second year of business. The fact is that in recent months, the revenue from online poker and casino gaming in the Garden State has dropped even further leading to predictions for 2015 to be realigned with the current trend. Deutsche Bank analysts have dropped their estimation from $250 Million down to $150 Million, and although there are a few people that are a little more optimistic, their voices are not too loud.
It’s hoped that the introduction of PokerStars, the world’s largest online poker company in early 2015 can give the industry a boost, but it would mean the Amaya owned company having to attract a whole lot of new players to the tables to have any real significant effect. The problems are and will continue to be that with credit card declines and a small population of potential players it will continue to be an uphill struggle.
Offshore gaming in the US cannot be blamed for lack of revenue as the biggest online poker sites such as Bovada pulled out of the New Jersey market soon after regulation, and although there’s a little finger pointing at Sheldon Adelson’s Coalition to Stop Internet Gaming, it has in truth done nothing to stop players from playing, and looks unlikely to ever do so.