Is There Enough Demand in Nevada for a Third Online Poker Site?

December 18, 2013
Is There Enough Demand in Nevada for a Third Online Poker Site?

After the successful New Jersey online gaming launch, Nevada has become somewhat of a forgotten market.

WSOP and Ultimate Poker are the two brands currently operating in Nevada.  The traffic between the two sites has slowly declined as the market matures.  A third brand may bring more players to the industry, but the buzz of online poker seems to be slowly dying among Nevadans.

There are three potential sites on the radar for Nevada online players.

Z4 Poker

Z4 Poker’s land-based casino partner is Siena Hotel Spa. Both are owned by David Colvin.  Z4 Poker has the advantage of having a brick and mortar partner involved in the Reno market, one that may be untapped at this point by the two existing sites.  While Caesars Entertainment operates casinos in Reno, it does not offer cash deposits for WSOP at its properties.  Ultimate Poker’s partner Station Casinos does not operate in the Reno market.  This might help Z4 Poker convert players in northern Nevada that have yet to try out the other two Nevada sites.

South Point Poker

South Point Poker will do business under the Real Gaming brand. South Point recently introduced its sports betting app to Nevadans in partnership with Las Vegas locals casinos Rampart and Cannery.  While South Point’s sports betting app has demonstrated the company’s ability to find Nevada partnerships,  there is no confirmation that its online poker platform will form the same agreements.  The company should have a large database of potential Nevada players through its casino rewards program to generate some action for the site.

All American Poker Network

888, which operates in New Jersey and Delaware, plans to do business as the All American Poker Network in Nevada.  888 has partnered with Golden Gaming, Treasure Island and Wynn.  Golden Gaming is a potential gateway to the locals market, as realized by William Hill’s sports kiosks that once accepted sports wagers at all PT’s Pubs, but now only accept deposits for the company’s mobile app due to a July 2013 change in state law.  Treasure Island and Wynn are not brands that are likely to attract locals like a neighborhood tavern can.

The drawback of 888 might be its software conflict with WSOP.  Players cannot open WSOP and 888 at the same time, even though the two sites do not share liquidity.

There is also an 888 software conflict in Delaware.  All three racinos share the same liquidity and platform.  The Nevada and New Jersey WSOP software may not be open at the same time as the Delaware 888 platform.  This could be a problem in every market WSOP and 888 both operate.

Locals May Have Higher Value than Tourists

A recent off the record discussion with a Nevada online poker consultant revealed a thought that players in the locals market are worth far more than drawing poker tourists to play on regulated sites.  The main idea was that potential customers that are able to play from home have a higher lifetime value than tourists.  Visitors that come to Nevada for the sole purpose of playing regulated online poker are likely to be net winners, which is a negative on the ecosystem, according to this discussion.

Assuming that is the correct philosophy and the apparent software conflict between 888 and WSOP, it would seem that Z4 Poker and Real Gaming would have an advantage should they be next to market in Nevada.

That is not to say 888 would be at a complete disadvantage. The site has managed to hold third place in the New Jersey market in a similar situation, but its marketing must be able to draw locals to the site.  Unlike New Jersey, there are no casino games in Nevada at this time to help offset losses the poker site might post on the road to success.

This should not discount the possibility of operating through a multi-state compact.  888 already operates in Delaware and New Jersey with separate liquidity.  It has exclusivity in Delaware and that may be a key to it its ability to form multi-state player pools.

Nevada could also prove to be a launching pad for startup companies hoping to prove that in-house software is capable of success.  Some state legislatures might be swayed by a product that was built in the USA and creates local jobs, something most of the current regulated sites have yet to demonstrate.

While New Jersey has become the most successful online poker state, that does not mean that Nevada has been completely left behind.  There is still time for Nevada-based companies to prove that the products developed in-house are ready for prime time.


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