New Jersey Online Poker Revenues Rebound in October

Following a disastrous September, the New Jersey online poker market responded in a big way.

According to figures posted on Friday by the NJ Division of Gaming Enforcement, the state’s two poker operators – Party/Borgata and WSOP/888 – generated $1,913,403 in gross gaming revenue, significantly above September’s all-time low.

On an even more uplifting note, year-on-year revenue was down less than in any other month in 2015, and not by an insignificant margin. Compared to October 2014, revenue dipped just 2.8%, whereas prior to last month, the industry’s smallest decline of 2015 came in May, when annual revenue was down 10.4%.

As almost to be expected, the NJ’s online casino arm put forth another strong performance, generating just a shade under $11 million. That statistic represents a whopping 45.7% year-on-year increase, and a 6.8% improvement over last month.

The rare combination of growth in both poker and casino propelled the industry to its second-highest monthly revenue total ($12,863,935) since going live in November 2013.

October growth a pleasant surprise

Judging by last year’s trend (see chart below), it appears as though October would be a down month for online poker in New Jersey. From September 2014 to October 2014, online poker revenue fell 5.6%, and even more on a relative scale, as October is one day longer than September.

By contrast, from September to October this year, revenue grew 8% — representing a 13.6% swing toward the positive.

As to why the market performed so strongly, that’s somewhat of a mystery. It certainly didn’t have to do with the weather, as this October was warmer and sunnier than average.

Here are a few likely explanations:

• The GSSS III performed remarkably well, generating artificially inflated tournament revenue for Party/Borgata. Of the Series’ 43 events, only seven posted overlays. Contrast that to last year, when player confidence was at all-time low due to the disastrous execution of the first Garden State Super Series.
• As part of the lead-up to the November Nine, WSOP.com boasted a rather strong promotional schedule.
• September’s low totals were probably just a fluke, a consequence of warmer than average temperature readings and Labor Day weekend falling completely in September.

The latter theory appears to hold some water, as in the five months prior to September, online poker revenues were quite stable, never falling below $1.84 million or rising above $1.95 million. October’s figure is consistent with those numbers, whereas in September online poker generated just $1.77 million.

Borgata reclaims a sizable market share lead

At $1.08 million, the Borgata improved 13.6% over its September total, recording its highest online poker revenue total since May in the process.

Caesars also posted gains, but they were much more incremental in nature. Revenue was up 1.6% month-on-month.

This disparity supports the notion that the GSSS III did in fact play a huge role in the market’s growth.

In October, Borgata widened its market share lead over Caesars to 56.4%, up from 53.7% last month. But with the GSSS III in the rear-view mirror, I expect the race to be much tighter come the end of November.

Future outlook

Last November, NJ online poker recorded its lowest revenue total for the year. So far, it doesn’t look like history will repeat itself.

• Seasonal trends have kicked in full force. In just the first two weeks of November, online poker liquidity in NJ is up 7%.
• Two-year anniversary promos should entice at least some dormant players back to the virtual green felt.
• There are five Sundays in November. Sundays are typically the best day for online poker traffic, especially on the tournament front.

The Thanksgiving holiday may have a negative impact, but from what it appears, is more likely to help bolster revenue. Last year, traffic on Thanksgiving Day was markedly down, yet from (the other) Black Friday to that Sunday, liquidity was way up.

I expect a similar trend this year, with even stronger Sunday numbers, due to Party/Borgata hosting a $100,000 guarantee.