November 15 marks the one-year anniversary of Delaware's entry into the online poker market. This time last year, Delware's three struggling land-based racetracks launched poker websites to increase revenues.
After a year in operation, those sites have disappointed executives, regulators, and the lawmakers who approved such gaming in the first place. Revenues have lagged behind projections and traffic figures have not increased in significant ways. These days, the projections for the coming months and years are not good ones.
Delaware Online Card Rooms - September 2014
Take a look at the numbers in September 2014 to get an idea of how dismal the numbers have been. Between the card rooms for Harrington Raceway, Dover Downs, and Delaware Park (all operated by 888poker), the poker sites collected only $32,305 in revenue. The three sites share player traffic and even have a compact with Nevada to share poker players, so those numbers are simply bad.
New Jersey has had disappointing numbers for its online gambling websites, but the Atlantic City casinos have recorded $103 million in just under a year. Delaware has less than half-a-million dollars in that same time, which should give an indication of how disappointing their first year in operation has been.
Cash Game Traffic Not Enough
Online poker is not like online casinos. If a player signs up to play online slots, they don't need a community of players to enjoy their gaming. In the Internet poker industry, gamblers want and need potential opponents. Most of the rake in poker comes from "ring games", an industry term for cash games.
To have a successful site, an online card room needs cash games for low rollers, mid-stakes players, and high rollers. This provides liquidity on the site and draws in player interest from cash game specialists.
Not Enough Liquidity to Draw Poker Players
This would have tremendous appeal to cash game players in Nevada and Delaware, if enough players existed to fuel action. Instead of playing at illegal poker nights somewhere in Delaware or heading down to a casino on the Las Vegas Strip, gamblers could play cards from the comfort of their own home.
Unfortunately, Delaware's card rooms only have enough players for perhaps one low-stakes ring game during peak hours. Much of the day, 9 players aren't online long enough to keep action going. In such an environment, players soon give up and find a game elsewhere.
Online Poker Compact Could Help
The aforementioned interstate gaming compact signed by Nevada Governor Brian Sandoval and Delaware Governor Jack Markell in April 2014 could help, eventually. For the iPoker compact to become a major factor, though, other states are going to have to join the compact. When Delaware and Nevada came to their agreement, they made it easy for other states to join their association. It's a matter of whether those states see advantage to them in such an association.
For the time being, New Jersey's regulators do not. New Jersey is the 11th most populous state, so its leaders prefer to approach online gambling alone. Signing onto the compact would let New Jersey target players in Nevada and Delaware, but it would allow those states to gain revenues off players in New Jersey. Since the other two states sit towards the bottom of U.S. population statistics, that's not likely to happen anytime soon.
Other states will need to pass laws to license and regulate poker. If that happens, then those states might sign on to the compact. At present, California and Pennsylvania are in serious discussions to legalize online poker. But California and Pennsylvania are the 1st and 6th states in terms of population, so they might take the same path that New Jersey did. Therefore, multiple smaller U.S. states might need to join the compact to make it work.
WSOP.com Is Important - 888poker Software
For the moment, the amount of interface between the two states involved in the iPoker compact is limited. Since all three of Delaware's poker rooms use 888 software, the Nevada gaming sites also would need the same software to be able to interface.
Coincidentally, Nevada's WSOP.com uses 888 software at the moment. Since Ultimate Gaming announced it would shut down operations on the last day of the year, the WSOP poker site controls almost all of Nevada's Internet poker market. That is a positive sign, though finding other states that would join into the arrangement would be even better news.
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