New Jersey Online Poker Revenue Takes A Nosedive In June; PokerStars Absorbs Biggest Hit

The honeymoon period between PokerStars and online poker players from New Jersey has officially come to an end.

In the month of June, PokerStars’ revenue took the single biggest monthly hit of any operator in market history. It was bigger even than the losses incurred by Party Poker / Borgata and WSOP NJ / 888 when PokerStars first entered the market a few months back.

PokerStars’ poor performance, combined with lackluster showings from other operators, drove New Jersey online poker revenue to its lowest point since November 2015. It overshadowed what was yet another record-breaking month on the online casino front.

PokerStars revenue, market share plummet

According to financial reports released by the NJ Division of Gaming Enforcement on Wednesday, the NJ online poker industry generated $1,969,175 in gross gaming revenue for June, representing a 23.4 percent monthly decline. Factoring in June’s shorter length relative to May, that statistic improves slightly to -20.9 percent.

PokerStars, which accounted for nearly 45 percent of industry revenue in May, saw its revenue plunge 32.4 percent to $778,070, and its market share to 39.5 percent. That’s still tops for the industry, but the divide is much smaller.

It would have been tinier still had the state’s other operators not also turned in uninspired performances. Party/Borgata revenue took a 19.5 percent hit, falling to $589,002: its lowest monthly tally since NJ online poker went live in November 2013.

Fueled by its Online Championship Series and general hype surrounding the live Series, WSOP/888 absorbed a smaller blow, with revenue falling just 12.4 percent to $602,103, thus marking the first time that WSOP/888 has outperformed rival Party/Borgata.

WSOP/888 now boasts a 30.6 percent market share, up from 26.7 percent in May.

If there’s any silver lining, it’s that year-on-year revenue is up 7.3 percent. Still, that’s a far cry from the 33.3 percent revenue was up for May. The smallish year-on-year gain also indicates that most of PokerStars’ revenue is now cannibalized from other operators.

So what happened?

Seasonality undoubtedly played a role, as June tends to be one of the worst months for online poker for any region that isn’t called Nevada. But there’s more to the story, especially where PokerStars is concerned:

• The World Series of Poker likely drove a significant chunk of NJ players away from there home computers and to Las Vegas. It’s plausible that PokerStars, which appears to be more “regular infested” than other NJ-based sites, lost the most players to the live Series.
• The absence of Jason Somerville on Twitch — he took time off to host Run it Up Reno and play in the live Series — presumably had a negative impact on PokerStars’ signups.
• PokerStars’ revenue for May was artificially inflated by the first running of the NJ SCOOP, making the monthly decline look worse than it actually is.

Still, all this doesn’t fully explain why PokerStars’ revenue dipped by such a large margin, especially considering that in early June, the operator brought its widely popular CardHunt promotion to the NJ market. It also introduced Zoom Poker.

The only possible justification we’re left with is disinterest from online poker players; a disinterest fueled by waning novelty. We witnessed a similar phenomenon during the market’s early days, when revenue fell by 37.6 percent from January to July of 2014.

July positioned to be a bounce-back month for NJ online poker

July has notoriously been a better month than June for the industry. In 2014, revenue climbed 4.8 percent month-on-month. And in June 2015, GGR ticked up 2.8 percent in July before climbing 5.2 percent in August.

While these figures aren’t exactly earth-shattering, they suggest that revenue should creep above the $2 million marker and remain there for the foreseeable future, especially if WSOP/888 keep up with their high promotional spend.

No signs of slow down for online casino

As bad as online poker was in June, online casino was nearly as good. The industry set another revenue record (its eighth in nine months), generating $14,433,002. This figure represents a 3.3 percent monthly gain, and an otherworldly 46.8 percent annual increase.

• Leading the charge was the Golden Nugget, which became the first NJ-based online casino to turn in more than $3.5 million in revenue for a single month.
• The duo of Tropicana Casino and Virgin Casino also performed admirably, generating $3,346,287 — good for the second highest monthly total of any operator in market history.
• Even Resorts managed to have something of a bounce back month, with revenue climbing 4.4 percent to $1,924,972.

While these figures bode extremely well for the sustained growth of the NJ industry’s casino arm, they also suggest that seasonality may not play as big a role for online poker in New Jersey than it was elsewhere.