As somewhat anticipated, October was a banner month for the New Jersey online poker industry. Leading the charge was PokerStars NJ, which rode its highly successful and aggressive NJCOOP series to over $1 million in gross gaming revenue (GGR).
The partnership of the Borgata and PartyPoker NJ put up impressive numbers ($734,152) in October. However, massive overlays and connectivity problems plagued the network’s GSSS V series. That suggests that the pastures are not nearly as green as reflected by its GGR.
In total, online poker generated $2,389,752, representing an 18.5 percent uptick over September, and annual gains of 24.9 percent. It was the market’s biggest win since May, before the novelty of PokerStars NJ had worn off.
On the NJ online casino side, Golden Nugget became the first NJ operator to cross $4 million in a calendar month. Despite this, total online casino revenue was only up a scant 0.4 percent ($14,276,136) over September, and down 2.8 percent on a daily basis.
Total revenue for Atlantic City online casinos in October clocked in at $16,665,888, marking a 2.7 percent monthly increase and a 29.6 percent surge over October 2015.
At $161.2 million generated thus far in 2016, the industry has already surpassed 2015’s revenue total of $148.9 million. Whether or not it can crack $200 million in 2016, remains an open question.
Full October 2016 revenue breakdown, for both NJ online poker and casino, here.
PokerStars reasserts its dominance
Roughly two-thirds of the market’s resurgence comes courtesy of PokerStars, which saw its monthly revenue grow a staggering 36.2 percent to $1,013,671 in October. That’s despite only leading the industry in cash-game traffic for just over half the month. (Cash game data provided by Poker Industry Pro via PokerScout.)
PokerStars has the first running of the NJ Championship of Online Poker to thank for the uptick. The series was by all accounts, an eye-opening success, with nearly all of its 43 tournaments meeting their guarantees. Of the few tournaments that failed to hit the mark, most only fell short by a few buy-ins.
One such tournament was the $200,000 guaranteed Main Event. Despite its aggressive minimum benchmark, it came just a solitary buy-in short of not offering an overlay.
PokerStars’ impressive performance last month hammers home the point that cash game liquidity is no longer the sole metric, or even the most important metric, by which operator success should be judged. The strong correlation between top-shelf tournaments and increased revenue may entice Stars to host more one-off series in the near future.[i15-table tableid=20717][i15-table tableid=19346]
Looks can be deceiving
Borgata/Party’s most recent revenue trends suggest that the network is rebounding. The operator saw increased GGR of 16.3 percent from September to October in notching its best month since April.
However, that increase is deceptive, and likely not a true reflection of the network’s trajectory. It also reveals a flaw in relying solely on revenue reports to gauge market growth.
Remember, the NJ Division of Gaming Enforcement only reports gross gaming revenue per operator.
Should a tournament produce an overlay, all entry fees are still tabulated as GGR — even if the event produces a massive overlay, resulting in negative net revenue for the operator. This exact scenario played out with alarming frequency during Borgata/Party’s own tournament festival, the Garden State Super Series V.
Of the 60 plus GSSS V events that ran to completion, more than two-thirds produced overlays. Often times, the overlay was huge — 20 percent or more in some cases. Generally speaking, the break-even point for an operator is no greater than a 10 percent overlay.
Then, on the series’ final day, the network experienced widespread connectivity issues, resulting in the cancellation of eight scheduled (and running) tournaments, including the $175,000 guaranteed Main Event.
As per its cancellation policy, the network was tasked with distributing the entire guaranteed prize pool. Again, in some cases the amount paid out exceeded that taken in. More so, because some of the tournaments were still in late registration when the disconnects began.
In short, the network’s revenues for October may look favorable, but net revenues probably reveal a completely different story.
What does November hold?
October’s revenues were a bit of an anomaly driven by the presence of $2.35 million in added tournament guarantees. This, combined with November’s shorter duration and player trust issues with Borgata/Party, will almost inevitably result in the decline of month-over-month revenue.
However, there’s reason to be hopeful that the fall-off won’t be too dramatic:
- WSOP NJ is pushing the promotional envelope. In particular, the site’s upcoming Anniversary Series offer is bound to entice returning players.
- PokerStars isn’t exactly resting on its laurels either. The site has brought back the popular CardHunt promotion, which tends to draw players to the fast-fold and other cash-game tables. It is also rewarding players who accumulate 30 VIP player points per week with PokerStars Championship Bahamas Freeroll tickets.
- The live Borgata Fall Poker Open is in full swing, meaning that the rate of poker tourism in NJ is elevated.
- With colder weather comes the annual seasonal uptick for online poker.
At present, seven-day average cash game traffic is holding at approximately 285 concurrent players. That figure represents only a very modest decrease from November 1, when momentum was still flying high.