NJ Online Poker Revenue Holds Steady, But Battle For Market Supremacy Tightens

August 16, 2016
NJ Online Poker Revenue Holds Steady, But Battle For Market Supremacy Tightens

After a disappointing June, the New Jersey online poker industry failed to recover lost ground, with the state’s three operators combining to generate $2,012,105 in gross gaming revenue for the month of July.

That figure represents a 2.2 percent increase over last month’s tally, but a 1.1 decrease after normalizing for July’s slightly longer duration. Year-over-year revenue was up just 6.7 percent, marking the industry’s smallest annual gain since PokerStars entered the equation in mid-March.

Speaking of which, PokerStars’ once dominant lead in the NJ market has all but evaporated. Since controlling 46 percent of the industry in April, the operator has shed market share in four consecutive months.

What results is a tightly contested race, where a concentrated marketing effort by either WSOP 888 or Party Poker Borgata could result in a swift changing of the guard.

PokerStars’ downward trend continues

Since peaking at $1,177,837 in April, PokerStars’ revenue has been in a steady state of decline. According to financials released by the NJDGE on Friday, the operator generated just $754,199 in July, down 3.1 percent.

PokerStars’ share of the market has slipped to 37.4 percent, and although it remains the market share leader, there is now only a 7.2 percent divide separating first from third.

NJ online poker rev - July 2016

On the flip side, WSOP/888 turned in a strong performance. The site’s revenue was likely bolstered by both increased brand awareness tied to the running of the World Series of Poker Main Event, and the launch of a Summer Reload bonus that saw players flock to the cash game tables.

WSOP/888 brought in $649,832 last month, marking a 7.9 percent improvement over June’s record low, and representing the second month in a row that WSOP/888 has held the industry’s number two spot.

The operator may have a long road to travel before registering the kind of numbers it did in the pre-PokerStars days (year-on-year revenue was down 26.7 percent), but at a 32.3 percent market share, it’s proving a tough competitor.

Party Poker/Borgata also had something of a rebound month, with monthly revenue up 3.2 percent to $608,074. That said, it was still the operator’s second worst month in industry history.

A bit of perspective: In the first few months following the market’s launch in November 2013, it wasn’t uncommon for Party Poker/Borgata to rake in nearly three times its current revenue.

But these days, the prospects of the operator, or any single operator for that matter, pulling in seven figures in a given month seems like a long shot.

Online casino the real story

The state’s online casino arm continues to tell the more compelling narrative.

In what has become an almost predictable trend in New Jersey, the state’s 13 online casinos combined to set another monthly revenue record, generating $15,356,879 in July.

It was the first time the industry has cracked the $15 million barrier, marking a 6.4 percent increase over last month’s now short lived record and a 44.2 percent year-on-year surge. Online casino currently accounts for 88.4 percent of total NJ online gambling revenue — more than it ever has before.

The partnership of Golden Nugget and Betfair, who together comprise the Golden Nugget license, led the way with $3,706,991. That figure represents the highest monthly figure ever posted by a single operating license.

Other notable monthly increases:

  • Resorts: Up 19.4 percent to $2,298,099 — a new record for the operator
  • Caesars: The operator’s three online casino sites combined to generate $2,745,834, up 12.6 percent
  • Borgata: Surged 5.4 percent, and reclaimed the industry’s number two spot

Only Tropicana failed to make headway, with revenue dropping 3.1 percent. Still, its $3,242,891 take was nothing to scoff at.

What does the future look like for NJ online poker?

August has typically been a rebound month for the industry. In 2014, revenue climbed 4.9 percent from July to August. Similar gains were experienced last year, when revenue climbed 5.2 percent.

There’s little reason to suspect that the industry will deviate from this trend.

The overall composition of the market too, shouldn’t alter dramatically in the short-term, despite recent trends.

Aggressive promotions like Late Night Happy Hours (double loyalty points from 9 p.m – 1 a.m nightly) will help WSOP/888 from ceding market share. But now that the live Series and the network’s best promotions are in the rear-view mirror, it’s difficult to envision it gaining too much more ground on PokerStars.

Instead, expect the industry to undergo a stabilization period, where no one operator accounts for less than 25 percent or more than 40 percent of the market for the foreseeable future.

As noted earlier, one slam dunk marketing effort could disrupt this pattern, but that’s not expected until at least late fall, when online poker liquidity is nearing its seasonal peak.

Cheryl Ann Quigley / Shutterstock.com

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