Nearly four years after online poker launched in New Jersey and Delaware, and more than four years after Nevada became the first to legalize the games, the three states have announced an agreement to share online gaming liquidity.
The long-awaited news will benefit online poker players in all three states, as well as internet slots players in New Jersey and Delaware. Each state gaming regulator must now approve the plan before the online sites can coordinate to officially launch their shared pools and progressive jackpots.
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Nevada and Delaware Ahead of the Game
In March 2015, Nevada and Delaware launched the Multi-State Poker Network. Governors Brian Sandoval and Jack Markel signed the actual agreement in February 2014, but it took more than one year to secure 888 as the platform and coordinate the online poker sites.
Both states’ representatives knew that the key to online poker success would be liquidity, as neither state alone had the ability to draw significant numbers of players to the tables. By sharing online poker player pools, more games and stakes could be offered, and as tournaments grew, guarantees could be raised. The entire idea of building a larger poker arena was to increase the industry’s attractiveness to players.
It is not known how much revenue Nevada receives from online poker, as the state only boasts of one operator – WSOP-dot-com – and does not report revenue for public consumption unless there are at least three companies in operation. Delaware, on the other, hand, collects minimal revenue from its online poker sites, with much more coming from the online casino ventures.
The bigger plan, however, was to launch the network and eventually bring New Jersey into the mix. The popularity of online poker and other games quickly eclipsed that of Nevada and Delaware, so to join all three states together figured in to a broader strategy.
New Jersey Increases the Stakes
In the middle of Friday afternoon on October 13, New Jersey Governor Chris Christie announced the three-state liquidity agreement.
“New Jersey has been a pioneer in the development of authorized, regulated online gaming,” he said, “which has been a budding success since its launch in late 2013. Pooling players with Nevada and Delaware will enhance revenue growth, attract new customers, and create opportunities for players and internet gaming operators. This agreement marks the beginning of a new and exciting chapter for online gaming, and we look forward to working with our partners in Nevada and Delaware in this endeavor.”
There are two significant results of the agreement.
First, online poker players will be able to share player pools in all three states. This means players in any of the states will be able to compete against each other. With more players on the sites, it will likely improve the number of cash games and stakes available, and tournaments will draw more players, which can result in higher guarantees and more tournament options.
At this point, the only online poker operator in all three states is WSOP, so players on WSOP and 888 will be the first to share liquidity. However, it stands to reason that other online poker operators in New Jersey, such as MGM, might now have the incentive to launch in Nevada as well. This would create much-needed competition in Nevada and give players in the newly-shared US market more options.
Second, online slots players will be able to share progressive jackpots in New Jersey and Delaware. Nevada has yet to authorize online casino games, but it may consider doing so if other states continue to show extensive revenue benefits and now bigger progressive jackpots. Sites that offer casino slot games online will now be able to join those games in two states, allowing jackpots to increase faster and to potentially larger amounts.
Next Steps
New Jersey Division of Gaming Enforcement Director David Rebuck noted, “New Jersey stands to approve a game offering for all three states as soon as an operator submits such a product for testing.”
The onus is now on WSOP and 888 to produce the technology that allows shared liquidity for the online poker sites. If New Jersey is prepared to conduct the lion’s share of the testing, that will ease the pressure on Nevada and Delaware. In the end, though, all three states’ gaming regulators will need to test and verify the software to ensure it meets all standards and is prepared for launch.
It is doubtful that it will take as long as it did for Nevada and Delaware to launch their joint online poker venture, which was more than a year in the making. Players can expect liquidity to be available in 2018, but most likely in the spring or early summer. And with WSOP at the center of the project as it begins, it will likely want to launch in time for players in all states to play online satellites for the summer World Series of Poker tournaments in Las Vegas.
The WSOP did release a short statement after the New Jersey announcement that it is ready to begin the process. “We applaud the government leadership and the regulators in New Jersey, Nevada and Delaware for reaching this meaningful agreement. We will immediately begin efforts to take our existing Delaware-Nevada compact and add New Jersey to the mix by following the requirements established by the regulators so WSOP.com can share liquidity with all three states.”
Meanwhile, Pennsylvania and Michigan continue to work on their respective pieces of online gaming legislation. Should they legalize and regulate online poker and casino games in the near future, they may be able to initiate discussions with the three-state coalition right away. But their decisions regarding bills in 2017 – or possibly 2018 – remain to be made.
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