Unlikely Heroes Lift NJ Online Gambling Revenue To Previously Unseen Heights

February 15, 2017
Unlikely Heroes Lift NJ Online Gambling Revenue To Previously Unseen Heights

In an almost expected development, the New Jersey online gambling industry set a new revenue record last month, toppling the previous record set the month prior.

More of a surprise were the two quantities that proved the difference makers: Caesars and NJ online poker.

Top line numbers for NJ online gambling in January

NJ online casinos generated $18,820,098 in January, representing a 2.4 percent uptick over December, and a year-over-year increase of 28.6 percent.

To no surprise, online casino was the primary driver of revenue, accounting for $16,481,232, or 87.6 percent, of the total tally. Online casino revenue was up 1.2 percent from December, and climbed 32.1 percent year-on-year.

Online poker brought in an impressive $2,338,866, and was up significantly over both last month (+11.3 percent) and last year (+8.7 percent).

Despite all the positive comps, there are a few signs that the industry is finally heading toward a stabilization period. Namely, the year-over-year growth margin was lower than it’s been since March 2016, when industry revenue was up just 17.8 percent.

Also, individual online casino operator revenue was stagnant, with the lone exception being Caesars. Notably, newer entity Resorts appears to be reaching maturity — whereas in early 2016, it was still headed down a growth path.

Online poker revenue climbs across the board

It was a strong month for online poker, with all three operators pulling their weight:

  • Borgata Party revenue was up 8.2 percent, to $676,819, month-over-month. Year-over-year revenue was down 43.5 percent, although that’s hardly an apples-to-apples comp given the entry of PokerStars in March 2016.
  • WSOP 888 also made strides, with revenue climbing 6.9 percent to $713,364.
  • PokerStars remained the industry market share leader, accounting for $948,683 in gross gaming revenue, up a staggering 17.3 percent.

In total, industry revenue was up 11.3 percent over December, and 8.7 percent over last year. By comparison, last January, revenue was down 6.4 percent year-over-year.

The monthly gains come as much welcome relief, as the industry had been stuck in a two-month slump.

That being said, it’s now becoming apparent that PokerStars only grew NJ online poker by a nominal amount.

  • Since June, there has only been two months when the industry posted double-digit gains.
  • And in one of those months (October), revenue was artificially inflated by the running of two $1 million+ tournaments series.

Explaining the uptick

Based on cash game analysis only, it looked as though the industry might have a down month. According to Poker Industry Pro via PokerScout, average cash game liquidity sputtered throughout January, falling from 400 on Jan. 1 to 333 on Jan. 31 — a decline of 16.8 percent.

But in this instance, looks were deceiving.

Although cash game traffic trended downward in January, on average, it was still higher than it was in December. In that month, liquidity stagnated near record low levels before shooting up the week before Christmas, and reaching near annual peak numbers around the New Year.

The Winter Series, which smashed its $275k guaranteed prize pool, likely accounts for why PokerStars outperformed its competitors. It’s also one of the primary reasons for online poker’s surge.

A pattern is now forming. Whenever Stars hosts a one-off series, we can expect a huge upturn in monthly revenue. And although the surge will only be temporary, they happen often enough to offset the overall general decline of the industry.

[i15-table tableid=20717][i15-table tableid=20704]

Caesars’ positive momentum continues

The big surprise on the online casino front was Caesars, which eclipsed the $3 million mark for the first time in industry history. And it did so by a sizable margin.

Caesars generated $3,318,899 in January, up 10.8 percent over December, and an otherworldly 45.8 percent over last January. The site has been trending upward since October — over that three-month span revenue has climbed 37.6 percent.

Interestingly, and probably non-coincidentally, Caesars’ resurgence began shortly after it migrated to NYX Gaming’s OPS. Since, Caesars has added a flock of new games, and slapped a fresh coat of paint on its website. Its promotions, in our estimation, have also leaned more aggressive since June.

In this context, the operator’s turnaround comes as little surprise.

Other talking points

  • Golden Nugget has another excellent month. The Golden Nugget Casino, Play SugarHouse, and Betfair Casino triad generated $4,776,218 in gross gaming revenue, just $14k less than last month’s record-shattering mark.
  • Revenue for BorgataResorts and Tropicana’s online casino was relatively flat.
  • February is typically a down month for the industry, particularly online poker. The month’s shorter duration compared to last year won’t help matters.
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