New Jersey’s burgeoning online gambling business hardly needs a hero. Although, the online poker side of the industry sure could use one. Now, with all the noise it made this week diving head first into Garden State internet gaming with some rather ambitious goals, casino and hospitality giant Hard Rock International could possibly be presenting itself as one.
Hard Rock and some local partners bought the shuttered $1.2 billion Trump Taj Mahal in April 2017 for the paltry sum of for $50 million. They immediately announced plans to spend $375 million renovating and re-branding it Hard Rock Hotel & Casino Atlantic City. The cost of the renovation has since ballooned to $500 million. It will open sometime in the summer of 2018.
Atlantic City or bust?
New Jersey law dictates that only Atlantic City casinos are eligible for internet gambling licenses in the state. License holders can farm out operations to out of state online gambling companies, as long as they have servers located in New Jersey. However, only Atlantic City casinos can obtain internet gambling licenses.
Hard Rock Hotel & Casino Atlantic City recently applied for one. Presumably it plans on opening up its online gambling operations under this license sometime in 2018.
The fact Hard Rock has decided it now wants to use its entry into the Atlantic City casino market to get in the New Jersey online gambling industry comes as little surprise. Nor does the fact it has partnered with an experienced iGaming technology company to launch its efforts in the online arena. It’s the company’s rather bold and lofty goals that are making waves.
Hard Rock sets sights on global leadership
In announcing its plans to enter the market, Hard Rock’s Online Gaming SVP Kresimir Spajic said his sights were set on nothing less than global leadership in online gambling:
“Hard Rock has an ambitious plan to become a global leader in the international online gaming space. We are confident that, together with GiG, we can disrupt the market, through product innovation and unique user experience.”
It sounds as though Hard Rock is looking at something beyond New Jersey. However, it has to start somewhere.
If that somewhere is the New Jersey online casino business, it’s probably going to prove difficult to become the leader in an already established industry. Not to mention improving upon something already considered an unmitigated success.
Online gambling revenues soar
Online gambling revenue has gone up close to 20 percent every year since the market’s 2013 launch. In fact, New Jersey online gambling sites broke records in 2017. It pulled in almost a quarter of a billion dollars in revenue.
Since launch, the sites have generated a total of $722 million in revenue and the numbers just keep rising.
If there’s one knock on the industry it’s that it never even came close to meeting then-Governor Chris Christie’s $1.2 billion Year 1 revenue predictions. However, if you think Hard Rock is going to become the industry’s new leader right out of the gate and generate the almost $1 billion in revenue the industry would need to match those wildly inaccurate predictions, think again.
Golden Nugget‘s online casino offering is on top of the industry. It’s formula of partnering with as many third-party gaming software designers as possible to offer a one of the biggest variety of online casino games in the industry has it pulling in around $6 million in revenue every month. No matter how innovative and unique Hard Rock’s offering is, it is going to be tough to get close to the $70-million a year in revenue Golden Nugget is raking in.
The answer is online poker
The question is where can Hard Rock really disrupt the market and become leaders? The answer is online poker.
Of the $722 million in revenue online gambling has pulled in, only $107 million has come from online poker.
Everything from the big online tournament series to weekly Sunday guaranteed prize pool events have been marred by overlays. Those who thought the masses would travel to the Garden State for online poker were dead wrong. Even people who live in New Jersey don’t seem all that interested in the limited cash game choice and small tournament prize pools the fenced-in market offers.
PokerStars was a late entry into the market, launching in the spring of 2016. It immediately became market leader. Although the market has remained unimpressive market, with a lot of room for growth.
The one real success story coming out of online poker in New Jersey has been the online satellites into live events at Borgata Hotel Casino & Spa. Borgata has successfully leveraged its position as the home of poker on the East Coast. In fact, it has turned its satellites into some of the most popular online tournaments in New Jersey.
Hard Rock and poker
Over the past few years, Hard Rock has turned its Hollywood, Florida property into a major live poker destination. It started from literally nothing in a post-poker-boom economy most thought was impossible for new venues to compete in. It now hosts a variety of major poker tours. Plus, some of the largest guaranteed prize pool events in the country.
The company may want to try and repeat that success offering live poker at Hard Rock Hotel & Casino Atlantic City.
If it does, running an online poker site with satellites into live events can only help it draw bigger numbers.
Plus,if it thinks globally, and acts locally, online poker is a side of the business in New Jersey where Hard Rock has the best chance of achieving its goal of becoming a global online gaming leader.