In November 2014, the New Jersey Division of Gaming Enforcement (DGE) granted conditional approval to an online gaming partnership between Atlantic City’s Borgata Hotel Casino & Spa (via its parent company, Marina District Development Company LLC) and Pala Interactive LLC. It was a fairly momentous occasion, as it marked the first time a Native American tribe had been licensed, even conditionally, to offer online gambling in the United States (Pala Interactive was created by California’s Pala Band of Mission Indians). Pala already had experience operating a large land-based casino in California and with the DGE approval, it appeared to be just a matter of time until Pala launched a gaming site in New Jersey.
Pala’s online casino site, PalaCasino.com, did launch not too long thereafter and has been up and running ever since. The poker site, though, has always been in the “coming soon” stage. Now it looks like PalaPoker.com is being put on hold indefinitely. In an interview with CalvinAyre.com, Pala Interactive CEO Jim Ryan said that competitive concerns have led to PalaPoker’s delay:
So right now we’ve launched with our casino product, our plan is to launch with poker, our plan was to with launch poker in Q1 of this year and by and large it’s ready to go. We put that on hold. We put that on hold because we do expect PokerStars to enter the market, not that we would have grabbed a significant share because there are two very credible poker networks operating in the states of New Jersey at this point in time, liquidity is obviously a challenge, we’ve seen one poker network already exit the marketplace.
In a nutshell, Pala just doesn’t think it can compete in the New Jersey market at this time. It’s not unreasonable to think that, either, and is, in a way, refreshing that a company doesn’t have the arrogance to think it can just go in and dominate. Though the New Jersey online poker market is barely more than a year old, it is already pretty much owned by the Party Borgata Network (interesting that the Borgata’s current online offering is basically blocking its prospective one) and the WSOP/888 combination. WSOP/888 has the most cash game traffic with a seven day average of 220 players, according to PokerScout.com, while Party Borgata has 180 players. And as Ryan said, if PokerStars is finally permitted entry this year, it would be even harder for Pala to get any sort of foothold in the state, especially since it does not have the brand name that it has in California.
And while on the one hand I like that Pala isn’t going to just waste resources in a possible losing effort, I am not a huge fan of how passive the company was going to be before it decided to hold off on launching its poker site. In the interview, Ryan said that the company was going to use New Jersey as a learning experience for an eventual launch in California, if and when that state legalizes online gambling. I understand the sentiment there, but everything he said sounded like Pala wasn’t even going to try to compete and just use New Jersey as a sacrificial lamb. I wouldn’t be reckless, but I’d still try to put together a great product and turn a profit.
