US Online Poker Continues Its Sharp Decline In 2015

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Monday, March 23rd, 2015 | Written by Charles Washington

Pre-regulation few states were talking about the potential benefits online casino gambling could bring to their coffers, with all the initial attention concentrated on the country’s online poker market. Perhaps it was more attractive a proposition debating the merits of poker as a ‘game of skill’ rather than giving political opponents fuel by focusing upon a general gambling expansion, but more than a year since the USA’s first state launched regulated iGaming it is clear online casino games are the real driving force behind the industry and currently account for around three-quarter of total revenues. Meanwhile, the poker market continues to shrink and cause concern amongst operators.

Delaware’s Shrinking iPoker Market

Delaware launched its online gambling industry in November 2013, and from January to June 2014 the state returned four months of iGambling revenue growth. The second half of the year, however, saw revenues tumble during five out of six months, a negative trend which has continued into 2015 with revenues falling by 9.3% to $132,074 in January, from $145,667 generated in the same month in 2014. Moreover, online poker revenues saw the sharpest declines with revenues plummeting by a massive 68.7% to $27,695, from the $88,588 taken in January last year.

As a result, the need for Delaware to enact its Multi State Internet Gaming Agreement (MSIGA) with Nevada has become more pressing than ever, and as Dover Downs Casino CEO Ed Sutor commented in February 2014 when the MSIGA was first announced:

“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.”

That, of course, was more than a year ago and despite Nevada Governor Brian Sandoval last month predicting the compacts “imminent” enactment within “four to six weeks”, no official date has been set for the launch of the much vaunted player pool sharing agreement.

Nevada Stopped Releasing iPoker Results

Likewise, Nevada’s iPoker-only market has equally been hit by shrinking revenues, and in November 2014 the Silver State’s first ever regulated poker site Ultimate Gaming shut its operation for good. Highlighting the uphill struggle faced by online poker sites in the USA, Ultimate Gaming Chairman Tom Breitling stated at the time:

“As has been the case in other jurisdictions, online poker revenues in Nevada have fallen far short of original projections. Moreover, the state-by-state approach to online gaming has created an extremely cost-prohibitive and challenging operating environment. These factors have combined to make the path to profitability very difficult and uncertain. Consequently, we have decided to cease operations.”

With Nevada’s iPoker industry now consisting of just WSOP.com and Real Gaming, the Nevada Gaming Control Board has ceased releasing monthly online poker revenue figures. However, onlinepokerreport has used the traffic figures from online tracking site PokerScout to predict recent revenues and according to its analysis Nevada’s iPoker industry has continued to slide from December 2014 through to February 2015.

Live WSOP A Band-aid Solution

While Nevada’s prestigious live tournament series, the World Series Of Poker (WSOP), has brought a surge of traffic to the Silver State’s iPoker industry for the few summer months the competition runs for, the onlinepokerreport describes the WSOP as a “band-aid solution that will temporarily mask the market’s downward momentum,” with the article emphasizing the need for operators to explore more long-term solutions, especially with regards increasing player liquidity with Delaware. Nevertheless, Delaware’s small population of 935k, and Nevada’s of 2.8 million people is still considered too small to support a lucrative industry, and so persuading New Jersey to join their compact may represent the best way forward in attaining the critical mass needed to sustain a viable and healthy poker ecology.

New Jersey iPoker Down 34% In February

Last month, New Jersey’s iGaming revenues rose by 1% to $10.4 million, with online casinos up by an impressive 16.13% to $8.35 million, but poker plunging by 34% to just $2.05 million. One would think that this downward trend in iPoker popularity would act as a motivator for New Jersey to throw in its lot with Nevada and Delaware and join their MSIGA, but despite being courted by these states New Jersey has maintained that it has no wish to enter into any such arrangement at present. With just a slim chance any other US states regulating iPoker industries of their own in the near future, New Jersey may yet find collaborating with Nevada and Delaware provides the best opportunity for all three states to grow their online poker markets together, rather than wither away separately.