Everything You Need To Know About The Interstate Online Poker Agreement

Steve Ruddock October 16, 2017 10087 Reads
intrastate online poker

Thanks to a new interstate agreement, New Jersey online poker players will be able to play against online poker players in Nevada and Delaware in the not too distant future.

On Friday, New Jersey Governor Chris Christie announced an agreement was reached “with Nevada Governor Brian Sandoval and Delaware Governor John Carney to allow Internet gaming patrons in New Jersey to play online against players in those two states.”

The announcement was welcome news for online gambling supporters, who have been long frustrated by a lack of legislative progress across the country.  The news helps dampen the blow of the ongoing situation unfolding in neighboring Pennsylvania.

When the agreement comes to fruition, US online poker liquidity will receive a much-needed jolt.

The long, winding road to an agreement

Delaware and Nevada entered into an interstate online poker agreement and created the Multi-State Internet Gaming Association in February 2014.

In March of 2015, the two states began sharing online poker liquidity.

New Jersey, was invited to join MSIGA, and conversations have been ongoing, but an agreement could never be brokered between the states until now.

In a March 2017 interview with Online Poker Report, New Jersey Division of Gaming Enforcement Director David Rebuck was pessimistic that an agreement could be reached between the states.

Rebuck cited the formal structure of MSIGA as a barrier:

“In New Jersey, our law for allowing agreements between state regulatory agencies are less restrictive. We don’t need a formal compact. We are allowed to have agreements that can be worked out in a less bureaucratic way.”

Rebuck also had concerns that the pooling of players gave operators active in both states a leg up on the competition. An advantage the New Jersey Division of Gaming Enforcement is uncomfortable with.

“When you look at the compact it really only benefits one company,” Director Rebuck said. “In New Jersey, I can’t do an agreement that only benefits one operator.”

Director Rebuck did go on to say, “If there was an opportunity for the other operators [to also benefit] that would be different.”

By July the possibility of New Jersey teaming up with the other states was once again a possibility.

Director Rebuck, foreshadowed Friday’s news when he told Global Gaming Business Publisher Roger Gros he had reopened liquidity sharing talks with Nevada.

“I have reopened the dialogue with AG Burnett to determine if we can try to get an agreement between New Jersey and Nevada to have liquidity,” Rebuck said during the audio interview.

And on Friday, October 13, 2017, New Jersey formally announced it was entering into an interstate online gaming agreement with Nevada and Delaware.

What does the agreement authorize?

The agreement will allow licensed online poker operators in two or more states to share liquidity in cash games and tournaments.

The agreement also paves the way for operators to link online progressive jackpots, creating larger, and faster-growing slot and table game jackpots.

There may be opportunities for other liquidity sharing opportunities like blackjack or slot tournaments.

How big of an impact will the agreement have on online poker?

Even if the liquidity sharing agreement doesn’t bring in a single new player, it will have several positive effects:

  • Tournament guarantees will be larger and more appealing, with Sunday guarantees as high as $100,000 depending on how players are divvied up across the networks.
  • Average total cash game traffic will increase by nearly 200 percent in Nevada-Delaware and 50% percent in New Jersey. Again, how much each operator stands to gain is dependent on how many dual operators there are.
  • Peak hours will be expanded due to substantial player bases in two different time zones three hours apart.
  • With the player base expanded, fast/fold games and more Sit & Go tournaments can be introduced.

How soon could Nevada, Delaware, and New Jersey share players?

Don’t expect the states to be sharing player pools tomorrow.

When asked, neither the NJDGE or the Nevada Gaming Control Board would offer anything in the way of a timeline.

NJ DGE Director Rebuck has said on multiple occasions that enacting an interstate agreement isn’t “as easy as flipping a switch.”

In the press release, he sounded more optimistic, saying, “New Jersey stands prepared to approve a game offering for all three states as soon as an operator submits such a product for testing.”

NGCB Chairman AG Burnett provided a similar statement to OPR:

“The technology teams in Nevada, New Jersey and Delaware are going to meet to discuss next steps. The timeline is to move toward integration ASAP.”

Realize it took Nevada and Delaware 13 months from the announcement of an agreement to pooling their online poker players.

With the infrastructure in place and a model to follow, it would be depressing if it took over a year for New Jersey to link up with the two existing MSIGA states.

However, don’t be surprised if the timeline is measured in months.

Here’s why:

  • There are inter-jurisdictional regulatory issues to work out.
  • Operators need to be licensed and products approved for interstate pooling.
  • Beyond the existing online poker framework of MSIGA, this agreement also allows operators to link progressive jackpots, which adds another dimension.
  • In order to avoid picking winners, regulators may give other operators a chance to have licenses approved in Nevada.

Who are the likely operators to launch in Nevada?

Considering his previous concerns that an interstate agreement with Nevada and Delaware only helps one operator, there’s a strong possibility that one or more New Jersey online poker operators are already eyeing a Nevada online poker license.

MGM makes the most sense

MGM owns Borgata in Atlantic City where it’s partnered with GVC/partypoker.

In addition to launching an MGM-branded online casino and poker site in New Jersey, the company has been at the forefront of online gaming legislation in multiple states.

Adding a Nevada online poker site wouldn’t provide much in the way of revenue, but it would better position the company to be a player if more states legalize online gaming.

The overarching question is how Nevada regulators will view GVC, a company with a track record of operating in charcoal gray markets. Despite not being known for being lax in its vetting. the NJ DGE approved their application

Pala

Pala is struggling to gain market share in New Jersey and adding another PalaPoker.com in Nevada is unlikely to move the needle. The move would only serve to double the company’s online poker expenses.

However, the company has been shopping its online poker platform around, and it could find a home in Nevada. If they partnered with a strong brand capable of grabbing some market share, it might make sense.

How about PokerStars and others?

Bad Actor language shuts the door on PokerStars chances

PokerStars is shut out of the Nevada until at least 2018, and likely in perpetuity based on how the state’s bad actor clause is constructed and interpreted.

Someone else?

US online poker liquidity is set to grow by 50 percent, and some of the companies sitting on the sidelines may be more inclined to get into the online poker business.

There is no shortage of candidate casinos in Nevada. As long as they partner with an existing online provider in New Jersey,  any casino could launch a site. Once launched, they’ll be able to share liquidity with sites using the same platform provider in other states.

For instance, at one point time, Treasure Island was planning on launching an 888-powered online poker site and sharing liquidity with Caesars’ WSOP.com.

Another possibility would be a Nevada casino launching an online poker site and later teaming up with one of the New Jersey casinos that doesn’t presently offer online poker: Tropicana, Golden Nugget, and the soon to be opened Hard Rock AC.

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