Thoughts on US Regulated Online Poker?

As of January 31st, a total of 197,782 online gaming accounts have been opened in the state of New Jersey which is a rise of 27% from December. Numbers of how many of those accounts are actually real money accounts with depositing and active players however are not being given, however once bonus users and those who cannot deposit have been taken out of the equation then we’ll be left with a whole lot less. It is however a start. Revenue for January stood at $9.5 Million, which is an increase on December however when USA Today wrote, “ the buzz among politicians and analysts is that online gambling, if New Jersey plays its cards right, could attract billions in revenue and thousands of high-tech jobs to the state”, I think they are just a tad off the mark. How billions in tax revenue will be created, and thousands of high tech jobs suddenly appear is way beyond the expectations of even the most optimistic analyst...the 15% tax on online gambling will never add up to billions, and the jobs created will not be anywhere near in their thousands, and as for high tech jobs, most online poker rooms and casinos are simply skins and the real muscle is provided by the network or software provider meaning that most operations focus on marketing and support.

The bill that Sen Ray Lesniak has presented that could possibly open up online gambling in other states, linked to New Jersey offerings would also be of little help as Nevada and Delaware, being the only other states with legalized gambling would not help numbers that much. Delaware has a very small population, and Nevada’s isn’t much bigger meaning player pools would not increase by any significant amount. As for large operations basing themselves in the Garden State? That’s highly unlikely, they are happy where they are. Rich Muny of the Poker Players Alliance states that, "In regulated jurisdictions like New Jersey, we are seeing players flock to licensed sites, pushing unlicensed, offshore sites out of the market," and continues with, "We're really seeing the free market drive compliance, as one would expect.” I have a little time for the PPA, however those comments are simply wrong. Since launch of online poker in New Jersey, Delaware and Nevada there has been no decline in traffic to the likes of Full Flush Poker, Americas Cardroom or Carbon Poker, to say that the launch of a few rooms in a few states could do that is way off the mark, many offshore sites no longer accept players from those states anyways so to say that regulated poker is pushing offshore poker downhill is quite simply not true. Stating that players are ‘flocking’ to these licensed sites is again a little out, how many players are their to actually form ‘flocks’.

I believe a certain Mr Calvin Ayre is much closer to the money when he predicts that, “I believe both operators and states are in for some sticker shock when they realize just how little money there is to be reaped via the glacial pace of the state-by-state rollout of online gambling across the US.” That’s more like it, and when you also take into consideration the huge set up and running costs of the online poker rooms involved, then the picture starts to get a little clearer. With Party Poker off to a decent start in NJ it will still be some time before they even begin to tread water, with the start up costs alone amounting to a reported 10 Million Euros, and as Mr Ayre says, “turning that red ink to black will be a mean feat.”