Gambling in the USA

Five years, five biggest lessons learned in New Yersey’s online gambling

Published

7 years ago

February 26, 2018

Five years, five biggest lessons learned in New Yersey's online gambling

Reading Time: 5 minutes

On February 26, 2013, New Jersey celebrated a historic milestone. It was on that day that then Governor Chris Christie signed Assembly Bill 2578, which legalized online poker and casino games in the state, into law.

Exactly nine months later the first regulated sites went live. And while the industry was not without its growing pains, it has proven an overwhelming success, generating over $130 million for state coffers and contributing to the revitalization of downtrodden Atlantic City.

In this retrospect we take a look at some of the biggest lessons learned during the industry’s first five years, paying particular attention to unexpected trends that threw analysts for a loop. New states considering iGaming legislation can look to these examples in order to glean a better perspective as to how to max out their own industries.

1 — Outrageous projections are damaging

Exaggerated revenue projections are nothing new, especially in regard to nascent industries. But when those predictions are so outrageous that the new industry has absolutely no chance of meeting expectations, it can have a long-term detrimental impact on public perception.

This is exactly what happened to the NJ online gambling industry.

Conservative estimates projected $200 – $300 million in first-year revenue; lofty but attainable under the right circumstances. They weren’t the problem. It was Morgan Stanley‘s estimate of $1 billion, and Chris Christie’s own projection of $1.2 billion which made headlines, ultimately putting the industry in an unenviable spot.

How Christie derived this figure is anyone’s guess, but we suspect it has something to do with bolstering his political clout. Unfortunately, when the industry posted first-year revenue of $122.9 million — a very respectable number — it was widely viewed as a colossal failure. As a result, other state legislators shied away from online gambling, and it wouldn’t be until 2017 that another state (Pennsylvania) legalized the activity.

Thankfully, industry operators weren’t deterred by the negativity. Last year, NJ online gambling generated $245.6 million, and in January 2018, it set a new high-water mark for monthly revenue.

States on the fence about iGaming legislation are advised to look at this growth trajectory, and not be fazed that NJ online gambling sites didn’t live up to the bombastic predictions set forth by Christie in 2013.

2 — Online casino is the new online poker

When Black Friday forced PokerStars, Full Tilt, and other major online poker brands out of the US in 2011, players were rightly devastated. At the time, poker was something of a national pastime in the states, and its sudden removal cost many residents their livelihood, and a significant number their jobs.

By 2013 online poker was well past its popularity peak, but that didn’t prevent players from becoming enthused about its return to New Jersey. Unfortunately, these players were met with a hard reality early on, that this new online poker market was merely a shadow of its former self.

Most of the problem had to do with the capped liquidity of the NJ market. Prior to Black Friday, sites had a population reach in the hundreds of millions. Now their reach was just under 9 million. Factor in the industry’s various early struggles (payment processing limitations, geolocation failures) and traffic and revenue quickly floundered.

During those early days, operators poured countless marketing dollars into poker (remember 888’s 80% rakeback deal?), believing it to be the best use of their funds. They were wrong, and in being wrong they hindered the growth of online casino — a vertical that did not depend on high liquidity for success.

Since, they’ve learned their lesson and online casino sites have thrived. In 2017, online casino accounted for a staggering 90.1% of industry revenue.

Granted, we do think online poker will capture more market share in 2018, but that’s only because NJ has taken steps to rid itself of its liquidity problem, by forging a player pooling compact with Nevada and Delaware.

3 — What’s in a brand? Apparently, not everything

When NJ online gambling launched in November 2013, analysts believed that Caesars and Borgata sites would dominate the landscape. They did, for a time.

But it quickly became clear that over the long-haul, strong branding was only one piece of the puzzle. Nowhere was this more evident than on Golden Nugget licensed sites. A relatively small casino brand in New Jersey, at least compared to Borgata and Caesars, Golden Nugget purposely held back on its marketing spend for about a year, only to open the floodgates once other sites pulled back on their initial promotional blitz. It was also around this time that it picked up Betfair, a highly regarded international brand, under its license.

This one-two punch worked, and the positive results were amplified by the operator’s aggressiveness, resulting in a rapidly expanding game library, new formats, better software, and top-flight payment processing. Since, Golden Nugget has never looked back, and in January 2018 it became the first operator to generate over $7 million in a calendar month. For perspective, no other operator has ever pulled in $5 million.

Other smaller brands have also done well. Resorts, Atlantic City’s smallest casino brand and a latecomer to the online market, defied all odds and now accounts for significant market share. Why? Probably because its casino software and game libraries are second to none.

And for what it’s worth smaller brands are apparently making an impression on AC’s big hitters. Recently we’ve seen sites under the Caesars license make a host of improvements, and Borgata has been upping its online casino game considerably of late, via new games and creative promotions.

The lesson here is that smaller casino brands in other states have plenty of reason to lobby for iGaming, perhaps even more than bigger names, because the online space is a more level playing field.

4 — AC and NJ online gambling, perfect together

One of the chief concerns revolving around NJ online gambling was that the industry might cannibalize Atlantic City revenue. Not only were these worries quickly put to bed, but it was revealed that online gambling had a complementary impact on brick & mortar casinos.

As early as February 2014, three months after industry launch, it was shown that online and land-based players come from very different stock, with little overlap. Going further, a portion of these online players were incentivized to visit Atlantic City for the first time.

We’re not saying online gambling is the sole reason Atlantic City land-based gaming revenue has stabilized, but it’s certainly a factor.

Not only that, but iGaming has proven to bolster Atlantic City revenue under select circumstances. To wit, it was recently reported that AC revenue was down a sharp 10% in January, primarily due to a string of inclement weather early in the month. However, for that very same reason, online gambling soared to a new revenue record.

Without online to cushion the blow, AC revenue would have fallen by a much larger margin, and that’s worth something.

Unfortunately there are still some holdouts that earnestly believe online will cannibalize their business. Hopefully these misguided fears will be dispelled once proof mounts in other states that this is not the case.

5 — Live Dealer proves a critical addition

The impact of Live Dealer games, launched on Golden Nugget Casino in 2016 and Betfair Casino in 2017, is not to be overlooked.

Not only do Live Dealer games take in some healthy wagers, but they’re proving a gateway to online gambling for those more comfortable with brick & mortar casino settings. In turn, some of these new players eventually warm up to electronic games.

We don’t have exact revenue figures for Live Dealer games, but based on the vertical’s growth — both in the number of tables running and hours of operation — we suspect it’s growing quickly.

Expect Golden Nugget to roll out several more Live Dealer games this year, including the Bet Behindfeature for blackjack, which could be a game changer. It’s also plausible that Golden Nugget will lease its studio space to more operators (Betfair currently utilizes it), as the cost of running an independent studio might prove too high for most.

Source: njonlinegambling.com

Gambling in the USA

Gaming Americas Weekly Roundup – November 4-10

Published

6 days ago

November 12, 2024

Niji Narayan

Reading Time: 2 minutes

Welcome to our weekly roundup of American gambling news again! Here, we are going through the weekly highlights of the American gambling industry which include the latest news and new partnerships. Read on and get updated.

Latest News

PENN Entertainment and ESPN announced that account linking between ESPN BET and ESPN is now available for customers, creating an even more deeply integrated media and betting experience. By linking accounts, fans now have the ability to seamlessly track upcoming, live and settled bets within the ESPN app and on ESPN.com. With this product enhancement, ESPN BET will soon bring fans more personalised bets and timely promotions based on their favourite sports, teams, players and fantasy rosters.

Accel Entertainment Inc. has announced that it has completed the acquisition of 85% of the ownership interests of Toucan Gaming LLC and LSM Gaming LLC, two Louisiana-based route operators and owners of multiple licensed video poker establishments (collectively, “Toucan”), for approximately $40 million. The combined business will operate as Toucan Gaming throughout Louisiana and will be led by Stan Guidroz, an industry-leading gaming executive and current CEO of Toucan Gaming. Mr. Guidroz owns the remaining 15% of Toucan’s ownership interests and will lead the Accel team supporting Toucan’s continued growth.

INTRALOT S.A. has announced the undertaking of a new project between the British Columbia Lottery Corporation (BCLC), the sole lottery operator for the Government of British Columbia in Canada, and INTRALOT, its US subsidiary, for the provision of an online lottery platform. The project also includes the digitalisation of the existing land-based network. The solution will be based on the Player X platform, part of the Lotos X ecosystem, and adds to the company’s overall partnership with BCLC, which has been extended until 2028.

BetMGM Poker has become the third US operator to offer multi-state online poker. The company has merged its player pools in Michigan and New Jersey. Both states are a part of the Multi-State Internet Gaming Agreement, which allows online poker networks to share liquidity and players in participating markets. The two-state network went live Wednesday afternoon after morning maintenance.

Betsson Group has celebrated its success at the SBC Awards Latinoamérica 2024, winning two prestigious awards: Sportsbook Operator of the Year and Leader of the Year, which was awarded to Kevin Saliba, Commercial Director (Business Development) for Latin America. This marks the second consecutive year Betsson has earned the Leader of the Year accolade, following Andrea Rossi’s win in 2023 – an achievement that underscores Betsson’s consistent leadership in the region.

Partnerships

Play’n GO has announced a new operator partnership with renowned gaming brand Hard Rock Digital for their top-rated Hard Rock Bet online casino platform in New Jersey. The Hard Rock brand is synonymous with entertainment worldwide, and this partnership will see Hard Rock Bet players in New Jersey gain access to hit Play’n GO titles such as Piggy Blitz, Book of Dead and Rise of Olympus 100.

SCCG Management, a global leader in gaming innovation and advisory, has announced a strategic partnership with Chata.AI, a technology provider specialising in self-service, proactive analytics that enables businesses to access real-time insights without requiring extensive technical expertise. This partnership introduces Chata.AI’s technology to the gaming industry, providing operators with powerful tools to streamline decision-making and increase operational efficiency.

Gambling in the USA

Gaming Americas Weekly Roundup – October 28-November 3

Published

2 weeks ago

November 4, 2024

Niji Narayan

Reading Time: 2 minutes

Latest News

Elray Resources Inc. has announced a significant milestone in the company’s growth strategy. The company has completed the sale of proprietary technology to 180 Life Sciences Corp. (NASDAQ:ATNF), a NASDAQ-listed company in exchange for preferred stock convertible into a 40% stake in ATNF and warrants to purchase 3 million shares of ATNF common stock, the conversion/exercise of which is subject to stockholder approval. The technology stack contained within Elray’s technology package will assist ATNF in launching an iGaming Blockchain casino.

PrizePicks, the largest daily fantasy sports operator in North America, has announced that it has been awarded Daily Fantasy Sports Operator Licenses in Delaware and Missouri. The company will launch Arena, its innovative peer-to-peer fantasy sports contest, in both states. With these new state launches, Arena will now be available in 15 states across the US.

The Pennsylvania Gaming Control Board (Board) unanimously voted to renew the Category 2 stand-alone casino license of Wind Creek Bethlehem LLC, operator of Wind Creek Bethlehem casino in Northampton County. In making the decision, the Board determined that Wind Creek Bethlehem LLC had fulfilled the obligations under its previously approved casino operator’s license and therefore qualified to have its license renewed for an additional five-year period.

Aristocrat announced that the company was the first international slot and online technology company to be granted a Gaming-Related Vendor license by The General Commercial Gaming Regulatory Authority (GCGRA), the federal entity overseeing commercial gaming activities in the United Arab Emirates (UAE). This announcement grants Aristocrat the ability to provide the company’s land-based electronic gaming machines (EGMs) and online games and technology solutions to commercial gaming operators licensed by the GCGRA.

Partnerships

SCCG Management, a leading global advisory and consulting firm in the gambling industry, has entered into a strategic partnership with Slot Machines Unlimited, a premier provider of refurbished slot machines and gaming equipment. The partnership between SCCG Management and Slot Machines Unlimited leverages both companies’ strengths: Slot Machines Unlimited’s expertise in refurbished gaming equipment and SCCG’s deep industry insight, global network and strategic growth capabilities. The collaboration will enhance Slot Machines Unlimited’s international sales and service operations, ensuring gaming establishments worldwide have access to high-quality slot machines and support.

Galaxy Gaming Inc. has announced that the Galaxy Operating System (GOS) is now live on over 50 ships worldwide with Carnival Corporation & PLC, the world’s largest leisure travel company. Since the installation, tables powered by GOS have awarded over $5 million in jackpot payouts to players. GOS is the jackpot progressive system for all Carnival Corporation ships, including Carnival Cruise Line, Holland America Line and Princess Cruises. Launched in 2024, GOS is the next-generation game management system developed by the industry’s leading table game experts.

The hottest new game from Aristocrat Gaming, Phoenix Link, is now live on casino floors, with Yaamava’ Resort & Casino being the first in North America to offer the highly-anticipated game. As the next evolution of the international hit game, Dragon Link, Phoenix Link features player-favourite mechanics from top games with all-new themes, features and bonuses.

Gambling in the USA

Gaming Americas Weekly Roundup – October 21-27

Published

3 weeks ago

October 28, 2024

Niji Narayan

Reading Time: 2 minutes

Latest News

Bally’s Interactive, the digital and sports betting division of Bally’s Corporation, announced the official launch of the Bally Bet Sportsbook app in Tennessee, marking its expansion into the tenth state. This milestone comes on the heels of recent successful Bally Bet launches in Massachusetts and Maryland. Sports enthusiasts across the Volunteer State can now revel in the comprehensive offerings of the Bally Bet sportsbook app. With a wide array of betting options, including spread, money line and total bets, as well as in-game betting and same game parlays, Tennessee sports fans will have an unparalleled wagering experience.

ESE Entertainment Inc., a gaming company that provides a range of services to leading video game developers and publishers, has announced that it has acquired Bombee Global Entertainment (Bombee Americas), the North American arm of Bombee Event Production AB, (Bombee), a global production company specialised in live production, special effects, broadcast and event management for the gaming sector. Bombee has successfully collaborated with ESE to bring its premier event production services and world class customer service to North America and beyond. The North American arm of Bombee, Bombee Americas, will continue to grow and scale in this new organisational structure under ESE, while maintaining its entire team and global support.

Matthew Wantman has become the overall champion of the PokerGO Tour PLO Series II presented by PLO Mastermind. Wantman secured the prestigious honor after an impressive showing at PokerGO Studio in Las Vegas, outperforming a talented field of the best PLO players in the world to earn the $10,000 PGT Passport bonus. The PGT PLO Series II featured a series of high-stakes pot-limit Omaha tournaments. Wantman’s consistent performance set him apart from the competition and solidified his spot atop the leaderboard.

Partnerships

SYNOT Games has announced its further expansion into the Colombian market through a partnership with BetPlay. This alliance highlights SYNOT Games’ commitment to increasing its presence in Latin America and providing its engaging and innovative games to a wider audience. Through this partnership, BetPlay’s online platform will feature a curated selection of SYNOTGames’ top-performing titles, including fan favourites like Aztec Jaguar, Diamond Fever, Realm of Lions.

Internet Sports International, a global provider of turnkey race and sportsbook software solutions, announced its partnership with the We-Ko-Pa Casino Resort in Fort McDowell, Arizona. Through this consultancy, ISI is powering the casino’s sportsbook and retail sports wagering operations on its gaming floor with its award-winning system. WKP Sportsbook is currently operating, allowing patrons to elevate their excitement by wagering on their preferred sporting events with up-to-the-minute odds and live action. The automated sportsbook kiosks provide access to a wide range of sports propositions for both the beginner and expert bettor.

Aristocrat Gaming, a leading designer, manufacturer and distributor of regulated slot games, announced it is now a promotional partner for Princess Cruises, one of the world’s most iconic cruise lines. Through this exciting collaboration, Aristocrat Gaming will design innovative gaming experiences for guests onboard Princess ships as well as create promotions with land-based casinos that offer Princess cruises as rewards.