New Jersey Interstate Poker Network Hits A Snag

August 7, 2017
NJ Interstate Poker Agreement

The US online poker market is still in the process of being rolled out. Only three states have successfully passed legislation introducing online casinos and poker—Nevada, New Jersey and Delaware. Pennsylvania is the next closest state to online gambling expansion, though nothing has been made official yet. New Jersey has expressed interest in forming an interstate compact that would foster a dense player pool, but some logistical issues are causing delays. Currently Nevada and Delaware share an interstate gambling compact that allows them to share their online poker player pool with provisions in the agreement that would allow for the same sharing with online casino games as well.

New Jersey’s online gambling market has brought in roughly $700 million in revenue in its nearly 4 years of service. The lion’s share of that revenue comes through the online casinos, leaving online poker to wither away. The Garden State has begun exploring potential avenues for expanding their poker market, and their best possible solution is joining forces with other states. They have even gone so far as to propose a compact with the UK Gaming Commission, one of the largest player pools in the international market.

Lawmakers have reached an impasse with their targets for a poker market. On the international front, the UK Gaming Commission simply cannot justify teaming up with New Jersey. While New Jersey has been in the market for nearly four years, that fact that it is struggling does not exactly scream ‘lucrative business partner’. Currently, the UK online poker market is dense and works with PokerStars, one of the largest online poker brands. A deal with New Jersey would force them to cut ties with the industry leading outfit, something that does not seem worthwhile.

The other obstacle in New Jersey’s way is the language of their online gambling law. The current law requires any operator licensed by New Jersey (a license would be required in order to service local residents) to have their servers located in Atlantic City. This is where the logistical issues arise—New Jersey’s small player pool does not justify the UK relocating servers to New Jersey. This issue is also why states like Nevada, Delaware and Pennsylvania might have difficulty entering into an interstate agreement. In order for anything to happen, New Jersey may have to amend their online poker legislation.

An interstate poker network makes sense for multiple reasons. For starters, the domestic player pool would increase by millions, supporting more competition and revenue brought in from player traffic. Another reason the compact would be beneficial is that it would make for a more high-quality online gaming experience. Online gaming software brands would be more incentivized to offer their games to a larger poker network versus small individual states. A common understanding between states would foster an online poker market that could churn revenue back into states that could be applied to state infrastructure.

For New Jersey, they have an ace in the hole for their online poker sector—sports betting. The US Supreme Court is currently hearing a case between NJ and the major sports leagues. New Jersey is fighting for the right to host sports betting. If the case ends up in their favor, online sports betting could be introduced as well. This could be the catalyst in driving traffic to their online gambling sites, which could translate to an increase in poker numbers.

If an interstate poker network is to exist, lawmakers must create an environment that can feasibly and logistically support it. Geolocation is a big part of US online gambling because states have to verify if players are located within state lines, however, it would not be necessary if all states could have legal online poker. The future looks bright for US online poker, but it seems it will take quite a while for it to hit full stride.