New Jersey Online Poker Revenues Tick Upward For Second Consecutive Month

New Jersey online poker revenue took a modest turn for the better last month, beating July’s figure by 5.2%. At $1.98 mm, the state’s two poker networks generated more revenue than in any month since May.

Continuing with the good vibes, August was also the second consecutive month in which the state’s online poker arm exhibited modest growth, and the first in nearly a year that poker increased its iGaming market share – up from 15% to 16.2%.

The market’s growth patterns over the past several months are eerily in line with those witnessed during an identical time frame in 2014, suggesting that after nearly two years, the industry is approaching a stabilization point.

Whether it remains in cruise control or resumes its volatile ways may hinge on a few variables.

Read the official revenue report from the New Jersey Division of Gaming Enforcement here.

Momentum shifts (slightly) to online poker

While New Jersey’s online casino continues to reap the lion’s share of iGaming profits, its vice grip appears to be untangling – at least for now.

Online casinos generated $10.23 mm in August, down 3.9% over the previous month. Granted, there’s no need to hit the panic button just yet, as yearly revenue was still up just north of 23%, but that’s quite a distance from the 32% and 34% y/y gains posted in June and July, respectively.

Poker, on the other hand, has trimmed its annual rate of decline from 15% in May, to 12% in July and just under 12% last month. What’s more, whereas July’s 2.9% m/m growth for online poker was artificially inflated by July being one day longer than June, no such illusion existed in August.

However, there are a few indicators that NJ’s online casino segment will regain its lost market share in short order:

• Revenue for the upstart Golden Nugget dropped an abnormal 17%. Combine this with the fact that three of the four other casino operators all experienced gains, and it’s at least plausible that the drop was the result of the Nugget awarding one (or several) major jackpots.
• Resorts has instituted an aggressive marketing and promotional strategy, and it shows. Casino revenue grew another 32% in August after shooting up 39% in July.
• New Jersey iPoker revenue plunged 7.4% in September 2014, and fell further in the two months that followed.

The last point warrants further analysis, as September is generally the first month of the annual seasonal uptick. Yet, thus far, New Jersey has experienced a strong reversal of this trend.

One possible explanation is the weather. In 2014, New Jersey experienced abnormally high thermometer readings throughout September. Maybe players put off trading in their sun chairs for computer chairs longer than they would have if the weather followed normal patterns.

2015 is proving to be no different. According to Poker Industry Pro via PokerScout.com, cash game liquidity has dipped 9% in the past week alone. Not coincidentally, New Jersey also happened to be undergoing a healthy dose of Indian Summer at the time. It still is.

A more concrete justification for this apparent deviation from the norm is that last September, Party / Borgata experienced an unmitigated disaster when a technical malfunction caused six Garden State Super Series events to shut down.

The ensuing loss of player confidence, not to mention the added prize money the network forked over as a makeshift resolution, neatly explains why online poker revenue suffered last fall.

In the absence of such a disaster, it’s far more conceivable that revenue will grow incrementally once the weather cools.

It may even take off.

Is the NJ online poker market poised for substantial growth?

It all depends. While the abnormally hot weather and dearth of meaningful promotions or tournament series’ lead me to believe that revenue figures will falter this month, the outlook for October/November is favorable, pending:

• PokerStars finally launches an online poker room in New Jersey. Chad Benyon, a Macquarie Research analyst and close follower of Amaya, sees this happening by month’s end.
• PayPal becomes more accessible. Thus far, the only site to implement the largely trusted and popular payment processor as a depositing option is WSOP NJ, and even it restricts deposits to Peronsal account holders.
• 888 Poker and Party Poker start hosting promotions again, or if not that, make some sort of effort to show they still care about NJ. It seems that lately, the Borgata and WSOP NJ are carrying the entire burden of the industry on their shoulders. Frankly, I don’t see this changing.

Borgata maintains lead over Caesars

Perennial market share leader Borgata managed to preserve its nominal lead over Caesars last month, generating $1.05 mm in revenue. That was good enough for it to maintain a 53% share of the market.

Caesars revenue climbed $47k to $933k. The operator’s growth margin of 5.3% ranks just ahead of the industry average.

In so long as WSOP.com remains the sole provider of PayPal, expect the gap to shrink slightly, more so if WSOP permits Premier and Business account users to make deposits on the site.