Nevada Governor Brian Sandoval Perplexed by New Jersey’s Refusal to Sign Interstate Poker

Nevada Governor Brian Sandoval wants to make an interstate poker compact with New Jersey. He expressed his thoughts at a Nevada Gaming Policy Committee hearing on Friday in Las Vegas. While the remarks were not strong, Gov. Sandoval expressed a certain amount of frustration with the inability to make a deal with New Jersey.

According to the Las Vegas Review-Journal, the meeting was called mainly to discuss e-sports, which is the official name for professional, tournament-style online gaming. Nevada’s leaders believe their state can become a hub of electronic sports in the United States.

Rick Velota’s Live Tweets

As the meeting took place, the Review-Journal’s Rick Velota was live tweeting the event. As the discussion of esports was coming to a close, Gov. Sandoval said that he was “perplexed” by the fact Nevada has been unable to get an online poker deal with New Jersey.

Sandoval said he does not understand why Nevada has balked at signing such a deal in the past, but he hopes Gov. Chris Christie will sign a deal in his last full year in office. Chris Christie faces term limits in New Jersey, though he is banking on being a key figure in a Donald Trump administration — perhaps as Vice President or Attorney General.

Like Yankees and Dodgers Teaming Up

Gov. Sandoval said he long has thought a team-up of the two gambling powerhouses made a lot of sense. He said at the meeting, “It would be like putting together the Yankees and the Dodgers.

Brian Sandoval realizes the long term success of online poker depends on an interstate poker compact with many states signing player liquidity agreements. That is why Sandoval signed a compact with Delaware Gov. Jack Markell in spring of 2014. Since that deal went into effect a little over a year ago, Nevada and Delaware online poker rooms have seen a marked uptick in their player traffic.

The Importance of Player Liquidity

Player liquidity is more important to poker than increasing the customer base is to most businesses (though it’s important in all businesses). An online poker room needs 9 players at a time. Several variants of poker are popular, including Texas Hold’em, Omaha, and Seven-Card Stud. Each version of poker is going to need different style of betting: pot-limit and no-limit at the very least.

Other rules are important in poker events, such as the size of the player pool, the jackpot prize, and the amount of time it takes to resolve play. Turbo events and sit-n-go events take much shorter periods of time than million-dollar guaranteed events. Players need a choice between freezeout events, rebuys, and add-ons. Some players might not even prefer tournaments, and instead choose to play in cash games called “ring games”.

Then there are the bet limits. High rollers, mid-stakes players, and penny players each need their own talbes. Add it all up and online poker sites need hundreds, of not thousands, of gamblers playing at any given times. So player liquidity is huge, even for a state as big as New Jersey. There is a reason why the DGE has discussed sharing pools between New Jersey and the United Kingdom.

Analysis of New Jersey’s Online Gaming Market

New Jersey has a player pool two-and-a-half times the size of Nevada and Delaware combined, which is the likely reason Gov. Christie has balked at the notion. Christie likely sees a poker compact helping Nevada and Delaware more than it helps New Jersey.

New Jersey’s leadership may have wanted to go-it-alone, but they also might be reevaluating that decision. The online gambling experiment has disappointed somewhat from a revenue perspective. Gov. Chris Christie wildly overestimated the gaming revenues from online gambling, saying before the rollout it would bring in $1 billion a year. That proved to be more like $120 million a year, with revenues creeping up since. $150 million is a more realistic target number.

Steps in the Right Direction

The Division of Gaming Enforcement (DGE) has shown a willingness to tweak the system to wring more revenues out of online gambling. The state changed codes for credit card transactions, hoping to make it easier for VISA and MasterCard to accept credit card payments. The state also licensed PokerStars, which has boosted online gambling revenues. David Rebuck, Director of the DGE, has talked to Nevada and the United Kingdom about poker compacts.

At a point, the advantages of boosting player liquidity might become obvious. If a big state like Pennsylvania or California approved online poker and joined the compact, New Jersey certainly would follow. But if that didn’t happen immediately, there are arguments why New Jersey might sign a compact. Ultimately, a large scale interstate poker compact might be an economic boon for states, if something like the multi-state lottery associations (Mega Millions, Powerball) were to form for online poker.

How Signing a Poker Compact Helps New Jersey

It goes without saying that such an economic alliance would be a political alliance, too. If New Jersey wants to promote solidarity against federal bans on online gambling, then it should bring more states into economic partnerships. If Nevada had a real stake in online gambling, its politicians would have reasons to ignore Sheldon Adelson when he tries to spike iGaming in Nevada — and beyond.

Signing an interstate poker compact with Nevada and Delaware also might be a backdoor way to gain acceptance for PokerStars in other states. If New Jersey made its price for joining the interstate poker compact acceptance for all of its license holders, then PokerStars might become licensed in Nevada and Delaware — who have viewed PokerStars as a bad actor in the past.

If Chris Christie and Brian Sandoval are serious about increasing online poker revenues, they must see that a multi-state poker alliance and PokerStars are essential parts of the solution.

About Cliff Spiller

Cliff Spiller has been an online writer for 14 years. He worked for Small World Marketing for a decade, where he covered topics like gaming, sports, movies, and how-to guides. Since 2014, he has blogged about US and international gambling news on BestOnlineCasinos.com, USPokerSites.com, and LegalUSPokerSites.com

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