As PokerStars Novelty Fades, NJ Online Poker Revenue Takes Small Hit

The combination of PokerStars NJ launch hangover and the seasonal downturn resulted in the New Jersey online poker industry posting slightly lower revenue for May as compared to April, despite the former’s longer length.

Top-line numbers for NJ online poker

As per financials released by the NJ Division of Gaming Enforcement on Tuesday, the Garden State’s three operators (PokerStars NJ, WSOP / 888 and Party / Borgata) generated a total of $2,570,853 in gross revenue last month, down 0.7 percent from the $2,587,845 total reported for April.

On a per-day basis, revenue was down a tad over 4 percent. However, compared to last May, online poker was up 33.3 percent, eclipsing the already healthy year-over-year growth margin for April (30.4 percent).

Both PokerStars NJ and Party/Borgata incurred roughly 2 percent monthly losses, offset partially by a 3.5 percent gain by WSOP/888.

Casino also feels the heat

The state’s casino arm couldn’t fully combat the allure of warmer weather and the waning novelty of PokerStars either, as for the first time since August 2015, online casinos failed to generate more revenue than in the month prior.

Instead, the industry had to settle for its second highest revenue tally since iGaming first went live in November 2013: $13,975,305.

That figure represents a 2.9 percent drop over April, but a 32.5 percent annual gain.

The triumvirate of Resorts, Mohegan Sun and PokerStars were almost solely responsible for the dip (casino revenue was down 19.8 percent month-on-month), strongly suggesting poker players on PokerStars are growing weary of the operator’s casino offering.

It’s difficult to blame them, given that PokerStars has yet to expand its lackluster game library, nor offer much in the way of casino-focused promotions.

Total industry revenue came in at $16,546,158 — down 2.6 percent for the month and up 32.6 percent for the year.

When a loss is a win

Despite the downwind, May’s revenue tallies can be viewed as a small victory for the industry, for a few reasons:

• From April to May of last year, online poker revenue dropped 2.9 percent, following a 10.9 percent falloff the month before. By comparison, gains of 5.2 percent in April 2016 followed by a 0.7 percent drop in May don’t seem so bad.
• WSOP/888’s monthly revenue dipped 3.1 percent last May. Material gains last month indicate that the operator is doing a more effective job of driving traffic in the lead-up to the World Series of Poker, primarily via more attractive promotions and event qualifiers.
• Despite a lack of strong promotional vehicles, PokerStars NJ revenue held firm. From the looks of it, the performance of the first annual NJSCOOP was strong enough to offset losses on the cash game front.

Perhaps most importantly, data suggests that the industry continues to remain competitive.

At present, PokerStars holds a 44.8 percent market share, with Party/Borgata owning 28.4 percent and WSOP/888 26.7 percent. PokerStars’ share on the cash game side is even smaller: 43.4 percent.

The absence of a majority stakeholder in the New Jersey market should inspire all three operators to put their best effort forward, prompting sustained interest from players.

Can NJ online poker reverse course in June?

It won’t be easy, as June has proven a notoriously difficult month for NJ online poker.

Last June, revenue dropped 4.8 percent month-on-month. The falloff was even more drastic in June 2014, when revenue plummeted 9.9 percent.

Declines of this magnitude don’t exactly come off as a surprise. In addition to what tends to be one of the worst months of the seasonal downtrend, June is also when online players throughout the world gravitate away from their desktops to head to Las Vegas.

The loss of a few thousand players may not be entirely noticeable on a top-tier international site, but in small liquidity markets, just a few dozen regulars leaving can have a drastic impact.

However, there’s at least a chance that NJ will buck the trend this year:

• PokerStars’ widely popular CardHunt promotion sent cash-game liquidity soaring in the early part of the month. According to Poker Industry Pro via PokerScout.com, traffic was up 33.7 percent from May 29 to June 5.
• WSOP/888 has put forth a robust promotional schedule.
• PokerStars has launched fast-fold Zoom Poker in New Jersey, and the games are running. More hands played each month equates to increased revenue for the operator.

Does that mean a June turnaround is likely? Probably not. But like it did in May, expect the industry to nearly tread water during a time when history dictates it should be faltering.