In just about five weeks, the doors will open on only the second operation in the United States that will legalize online gaming and poker. On November 26, New Jersey will crack the seal and open up, for its residents, a variety of casino gaming (any game offered in an Atlantic City casino can be made available). More importantly, online poker will earn its second home in the U. S. and major players in the game are ready to take advantage of that.
What will be the potential bounty that awaits the casinos that will be in the mix? According to a study between Academicon and PokerScout.com, in the first year alone there is the potential for $39 million to $65 million in revenues. The research looked at the last two years prior to 2011 (“Black Friday” messed those numbers up pretty well) and found that 38,100 residents of New Jersey participated in online poker during the 2009-10 time frame. At that time, players in New Jersey were spending an average of $765 per year, creating a more than $29 million market.
Academicon and PokerScout have projected that, within the first year, it is possible that a New Jersey-only player pool would generate $39 million in action that would increase to $65 million by its tenth year. If New Jersey were able to partner with other states for online gaming and poker, the research shows that it is possible for a windfall of between $65 and $92 million.
The big question is who will be a part of the New Jersey gaming industry when it opens its doors come next month.
One of the top journalist/analyst in the business, Chris Grove of Online Poker Report, has taken a shot at projecting who will be a part of the industry on November 26. In his analysis, he grades the 12 casinos that are eligible to participate in the Garden State (the regulations state that all gaming must originate from Atlantic City) on a three-tiered scale – green, yellow and red. Through looking at his analysis, he presents some convincing arguments for each of the potential operations.
One of the sites that were licensed earlier this month, the Boyd Gaming (Borgata)/bwin.Party partnership, is one that Grove has in a “green light” status, although there are still questions. Grove notes that the bwin.Party software, long used for their popular PartyPoker platform, has “yet to be tested in a regulated U. S. environment,” which may slow them down some.
On Thursday, both Trump properties in Atlantic City were granted their licenses and their partners aren’t expected to have issues. Grove points out that the Trump Taj Mahal, who teamed up with Ultimate Gaming (owners of Ultimate Poker), shouldn’t have any issues due to Ultimate Gaming’s first-ever operation in Nevada. Trump Plaza also received their license and, due to the fact that their partner Betfair is already licensed in New Jersey, they are expected to be a part of the mix even though Grove has them in a “yellow light” status.
Grove also places the Caesars Entertainment/888 Holdings monolith (four casinos) in the “green light” zone, but the duo’s acceptance of a deal with Wynn Resorts to operate via a Caesars license through the All American Poker Network might be delayed a bit.
On Wednesday, the Golden Nugget received their license, but Grove places them in the “yellow light” zone for a few reasons. Their partnership with Bally Technologies has yet to yield an operable site in the Nevada online poker industry and, Grove notes, there hasn’t been much discussion as to whether they would be in on the launch in November for the New Jersey scene.
The big question for many online poker players in New Jersey is the Resorts International/PokerStars partnership. Grove has them in a “yellow light” status simply because of the complexity of licensing PokerStars in the state. Given their past track record (and the settlement with the U. S. Department of Justice last year), it isn’t a given that PokerStars will be licensed by the New Jersey Division of Gaming Enforcement.
Grove places four of the twelve Atlantic City casinos in the “red zone” (and, unlike football, this isn’t a good thing). The Tropicana/Gamesys alliance is put here by Grove due to “a lack of public talk from the company…indications that the partners aren’t quite ready for launch.” Grove places three other operations – Revel, The Atlantic Club and the Caesars-owned Showboat – in the “red zone” because of “no partner, no apparent plan and no public indications of preparedness.” He also notes the potential sale of the Atlantic Club and the Showboat as a reason for the lack of movement into the industry.
In reviewing Grove’s grading, that would be eight casinos that are either “green” or “yellow.” New Jersey pundits are more pessimistic than Grove, however. Meadowlands Matters writer John Brennan estimates that there will be “two or less” sites that will open up on November 26. Adam Krejcik, the Managing Director of Digital & Interactive Gaming for Eilers Research, responded to Brennan by saying, “I was hearing 3-4, so you are even more cynical than me!”
As we have seen in Nevada, just because licenses are issued doesn’t mean that everyone is going to jump in the water. November 26 will be a big day as we will see who will be ready to go for online gaming and poker in New Jersey – and who will divvy up a very rich pile of cash.