The Pennsylvania Gaming Control Board recently declined to give any specifics regarding when its soon-to-launch online poker industry would join with other states’ shared player pools. Pennsylvania regulators told Online Poker Report that they “cannot predict the likelihood” that in-state operators would be allowed to share liquidity.
The commission’s tentative response may seem overly cautious. However, the success of shared player pools remains very much up in the air.
Shared player pools up to this point
There were high hopes in New Jersey when the state joined the Multi-State Internet Gaming Association. Regulators believed that the shared player pools of Nevada and Delaware would boost the state’s online poker revenue.
However, the renaissance didn’t last. As PlayNJ reported, the decision to join the MSIGA has had little to no impact on New Jersey’s online poker revenue.
None of the changes have made any impact on New Jersey’s bottom line. Increased game selection and variety would seem to attract players, but failed to do so.
Monthly revenues, which were already anemic, continued their slow decline. In fact, monthly revenues in the Garden State have remained beneath $2 million for an entire year. Long gone are the days in 2014 when revenue soared past $3 million.
On the other hand, shared liquidity has been nothing but golden for Delaware. The three months of dipping into New Jersey have generated some of the best revenue the state has seen.
In fact, June 2018 was Delaware’s best month to date, with revenue soaring past $25,000. Three out of the four highest revenue months in Delaware have occurred since the joining.
Outlook for Pennsylvania and other states
So why the improvement in Delaware but not in New Jersey? The reasons are unclear, but Steve Ruddock speculates that the infusion of play from New Jersey softened the player pool for the two existing states.
In other words, Delaware players had sharpened their teeth on the salty professionals and better rec players from Nevada. New Jersey’s inclusion dumped a large number of fish into the pond, but only to be devoured.
It’s possible that as much has occurred to the members of the Pennsylvania Gaming Control Board. Frankly, the effect might be more pronounced because of Pennsylvania’s larger size.
However, as Ruddock mentioned, a player pool needs a certain critical mass to survive and thrive. Increasing the player pool size represents a network externality, where the system improves as more people join and use it.
The situation in New Jersey might have been inevitable
Regardless of whether it joined the MSIGA or not, New Jersey’s online poker market was in trouble. The industry’s revenues have trended consistently downward, and there is considerable inertia toward that direction as we move forward.
It’s hard to blame New Jersey or its operators for joining up, however. There was nothing to indicate that things would improve otherwise.
As it stands, online poker is a pittance as a percentage of each online casino‘s budget. Many sites don’t even offer poker, and the ones that do account for a contribution at or below 20 percent of slot revenue.
Furthermore, both operators and gamblers in the state are far more interested in sports betting now. The opportunities to bring in new players and incentivize play are far more likely for wagers on NFL games, NBA games, and MLB contests.
New Jersey online poker is unlikely to ever cease completely. However, as sports betting and live dealer functionalities continue to establish and grow their presences, it will become tougher for it to remain relevant.