Delaware-Nevada Online Poker Compact To Run At End Of 2014

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Thursday, March 6th, 2014 | Written by Charles Washington

At the end of February, the Governors of Delaware and Nevada signed an interstate online poker agreement that will allow the two states located on opposite sides of the US to work together and combine their player pools. However, initial excitement over the landmark agreement has subsided slightly after Delaware Finance Secretary Thomas Cook said that the system is unlikely to be up and running before the end of 2014.

Ramifications of the recent agreement

In spite of Nevada being home to the biggest gambling hub in the United States, with Las Vegas generating over half the revenues reported in the Silver State each year, Nevada’s online poker industry has thus far failed to ignite. Whereas the state of roughly two million people welcomes around 40 million tourist a year to Las Vegas alone, Nevada is ranked just 35th out of the 50 states in terms of population, while Delaware is even further behind in 45th place with less than a million residents.

Unlike casino games where players play against the house, poker requires solid amounts of player traffic in order to survive, and with Nevada reporting a seven-day average of around 200 cash game players, and Delaware just 18, both states are naturally quite relieved to have agreed an interstate online poker agreement.

Commenting on the benefits of allowing Delaware poker players to compete against people in Nevada, Dover Downs Casino CEO Ed Sutor, said: “What that means, quite simply, is we’ll have a lot more players who can come into the poker room..There will be more games available at different denominations. And that should help both states.. It would be very helpful if New Jersey got into our compact, not only for us, but for them. They need more players, as well.”

No plans for New Jersey to join compact

In spite of the call for the USA’s other regulated online gambling market of New Jersey to join their interstate online poker agreement, however, the Garden state is unlikely to accept such an invitation any time soon. Firstly, New Jersey has a state population of almost 9 million people and so are less desperate to join forces with such smaller markets. This is reflected in the end of year projections for the different states, with Nevada poker sites expected to generate around $18 million in revenues by the end of 2014, and Delaware a mere $1.7 million, compared to New Jersey which raked in $9.5 million in revenues for January, alone.

In addition, NJ Senator Ray Lesniak envisions his state being at the center of the USA’s nascent internet gaming industry, and as such the two states’ long-standing land-based casino rivalry for US gamblers is likely to spill over online and prevent them from joining forces on the Internet. In fact, on hearing the news Nevada had managed to recruit New Jersey’s neighboring state as part of its landmark agreement, NJ State Sen. Ray Lesniak expressed a certain amount of frustration, stating:

“Obviously, it’s disappointing. I’m not sure why we didn’t win that battle. I don’t even know if we were in it. I’m going to have to look into this and see quite frankly what went wrong..I think we want to be separate from Nevada because we have more to offer with full casino gambling, which brings in additional revenue. We’ll have to pick up the ball and hook up with other states.”

Which other states may join

In February, a Gambling Compliance report found at least 10 US states will consider legalizing and regulating internet gaming in 2014, including California, Colorado, Hawaii, Illinois, Iowa, Louisiana, Massachusetts, Mississippi, and Pennsylvania.

Thus far, the various states have taken a wait and see approach to online gambling before determining whether the industry presents a a lucrative opportunity, but the recent Delaware/Nevada compact may expedite their decision making and entice other smaller states to join the bandwagon. In any case, more populated states such as California (38 million people) and New Jersey may either decide to go it alone or alternatively hold out for more preferential deals before agreeing to share their player pools.

An alternative solution may involve the US introducing a federal legalized interstate gambling bill sometime in the future, which would automatically address the issue of scalability. However, that situation currently seems less likely, especially with several lawmakers already lining up on Capitol Hill seeking to place restriction on Internet gambling.