The New Jersey online poker market opened up in November 2013, and while the market has seen plenty of ups and downs over the past ten years, today it stands as the most appealing among the states that have legalized online poker for real money in the USA.
The revenue numbers for March in the Garden State are yet to be released by the state’s Division of Gaming Enforcement (DGE), but the first two months of 2023 have exhibited annual growth — breaking the string of 22 consecutive months of annual declines. March and the coming months are likely to follow in the same direction.
And what has helped buck this trend? The launch of the shared liquidity network by PokerStars.
On January 1, PokerStars US combined its players in New Jersey with its Michigan player pool to become the second operator in the country to share liquidity across state lines. Implementing shared liquidity immediately impacted PokerStars NJ's online revenue figures, seeing a 46% annual growth in January and an even better 75% in February.
It also helped PokerStars NJ to claim the top spot. Before the merger, the operator had been sitting at the bottom mostly.
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Meanwhile, PokerStars’ competition in the Garden State declined during the same period. WSOP NJ and 888poker NJ, under the Caesars license, generated $701k in February, down by 16% annually. The triad of BetMGM Poker NJ, partypoker NJ, and Borgata NJ under Borgata’s license — saw $704k in revenues, down 21% year-over-year.
Despite declines by two out of three licenses, the NJ online poker market saw an uptick of 6% and 2.5% year-over-year for January and February, respectively. While modest, the growth represents the first time the market has achieved that distinction since 2020.
But the real money New Jersey online poker market is far from saturation. WSOP and BetMGM — the other two licensed operators in NJ with online poker operations in Michigan are also expected to connect their Michigan player pools with their existing NJ networks.
While neither network has showed any plans to combine their NJ & MI player pools yet, BetMGM has shown encouraging signs that suggest it could soon launch interstate online poker and become the third operator in the country to do so.
Once that happens, the NJ online poker market will see another round of revitalization.
However, that would also mean that PokerStars would lose the advantage of being the only operator to involve Michigan as part of its shared liquidity network. Either way, the New Jersey online poker is positioned to see many more good months ahead. Pokerfuse expects the NJ market to report annual gains throughout 2023.
Here are some of the most monumental ways shared liquidity will forever change the New Jersey online poker market and beyond.
Implication #1: Revenue to Flourish Throughout the Year in NJ & MI
It is not rocket science that shared player pools lead to generating more revenue from rake at the cash game tables and poker tournament fees, as already evidenced in the first two months in New Jersey. This trend will probably continue throughout the year before the fanfare wears off.
Not just in New Jersey, Michigan has also seen growth in igaming revenue since PokerStars combined NJ-MI player pools. While the state does not explicitly report revenue for the online poker vertical, January saw a significant uptick in PokerStars’ revenue in the Great Lakes state. The shared liquidity network is clearly a significant contributor.
Also, considering that BetMGM and WSOP are expected to launch or expand their US networks thanks to Michigan becoming the latest signatory to the online poker compact, online poker revenues in New Jersey & Michigan will flourish further this year.
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Implication #2: Success of Existing Shared Liquidity Could Persuade Pennsylvania and West Virginia to Join the Multi-State Compact
With Michigan becoming the latest member to join the Multi-State Internet Gaming Agreement (MSIGA), the onus is now on Pennsylvania. With a population of 13 million, the Keystone State stands to be the largest state by population to offer online poker in the US. However, supporting a genuinely thriving online poker industry without shared liquidity is still not big enough.
Pennsylvania regulators have shown intent of joining the MSIGA agreement in the past, and it could likely become the fifth signatory this year.
Another state where online poker is legal, and regulators are interested in joining MSIGA, is West Virginia. Its state agency has indicated interest in joining the compact “at the appropriate time.” Whether WV online poker happens this year remains to be seen, but the increase in revenue to NJ & MI should certainly help persuade the state to join the multi-state agreement.
Implication #3: Shared Liquidity to Influence Lawmakers to Legalize Online Poker in New States
With more states joining the interstate poker compact and helping generate more revenue, the prospect of generating more tax revenue from online poker will catch on to more states.
But for that to happen, the multi-state online poker compact would need at least 7-8 members, including membership from big states like New York and Pennsylvania. Only then would lawmakers realize the value of online poker and the potential revenue that can be earned from this vertical.
Currently, seven states have legalized online poker: Delaware, Nevada, New Jersey, Pennsylvania, Michigan, West Virginia, and Connecticut — five of which are active.
Multiple states have considered legalizing online casino and online poker in recent times — though the efforts have not come to fruition. These include Indiana, Kentucky, New York, Illinois, and Iowa.
It may take a little time, but the near future looks bright for other states to consider online poker. Pokerfuse expects in the next five years, at least ten states will have legalized online poker.
A state like New York legalizing online poker would be a game changer for the landscape of US online poker, as NY is one of the biggest states in the country. With 19.7 million residents, the Empire State is much bigger than any state currently with legal online poker, including Pennsylvania and Michigan.
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Implication #4: Shared Liquidity Might Incentivize Smaller States to Launch Online Poker
The success of shared liquidity in New Jersey and other states would also persuade states with sparse populations to regulate online poker. Of seven states that have legalized online poker, four house residents of fewer than 4 million.
No online poker operator has opted to launch their operations in Connecticut or West Virginia. As these states are not part of the compact, running a stand-alone room would not be economically viable.
But shared liquidity in Nevada and Delaware has made these states workable for operators to continue their operations there. Had the interstate agreement not existed, these smaller states would have had no incentive to legalize or regulate online poker.
Implication #5: Bigger Player Pools Could Increase the Chance of Attracting New Operators
Currently, the US-regulated online poker market is limited to three or four options. These include PokerStars, WSOP, BetMGM network, and 888poker. However, implementing shared liquidity to seven or more states would make the market more appealing and potentially attract new operators.
In the past, there have been several candidates that have considered launching online poker or have operated. These include Pala Poker, Wynn, software provider IGT, and even the iPoker network.
But one room that is actually making genuine efforts in entering the US market is Phil Galfond’s Run It Once (RIO) Poker. While the timeframe for its launch is not unknown, the room will go live through its partnership with BetRivers, the online casino brand for RIO’s parent company, Rush Street Interactive.
Run It Once Poker, Powered by BetRivers, is expected to debut its US online poker operations in New Jersey, Michigan, and potentially Nevada by launching a shared liquidity network from Day 1. It could also launch in Pennsylvania should the state become a compact member.