The first week of shared online poker liquidity on WSOP and 888 branded sites in New Jersey, Nevada, and Delaware has been nothing short of momentous.
- Cash game traffic has skyrocketed, to the point where games across many No Limit Hold’em and Pot Limit Omaha stakes are running around the clock.
- The first attempt at a weekly $100k guarantee on WSOP.com was met with excitement, with participants combining to create a more than $156k prize pool.
- New Jersey players are enjoying far more avenues of entry into live WSOP events.
The combination of WSOP’s $15 Million Summer initiative and the forthcoming presence of the live World Series of Poker all but guarantees that the next several months will be historic ones for legal US online poker.
But it’s nothing compared to what will happen should Pennsylvania join the Multi-State Internet Gaming Association, a likely scenario that could come to fruition as early as this year.
Just look at the numbers, man
Pennsylvania has a population of approximately 12.8 million residents, compared to roughly 13 million residents for NJ, NV, and DE combined. Just based on that metric alone, one can reason that legal online poker participation in the US will effectively double once Pennsylvania enters the fray, even in the absence of shared liquidity.
Should PA share its liquidity with the current triumvirate, the equation changes, and for the better. Online poker industries are largely dependent on market size, so much so, that doubling the size of a market can lead to a tripling of participation rates.
The reasons for this are simple. Larger markets enable operators to roll out more games, a wider range of stakes, and larger guarantees. Companies in these bigger markets will also be able to justify significantly larger marketing initiatives. Not to mention, if the market spans multiple time zones, then that serves to lengthen the all important prime time hours.
As a result, the larger market attracts more players on a per population basis.
The Pennsylvania advantage
PA is a particularly advantageous market for online poker, for several reasons.
First off, the prevalence of poker activity is already high. During an average month, Pennsylvania’s land-based poker rooms generate an approximate average of about $5 million per month. Atlantic City poker rooms are lucky to do half that. Granted, some of that revenue comes from out-of-state (particularly New Jersey), but a good portion remains in-house.
Suffice it to say, Pennsylvania knows poker, and not just the heavily populated portions of the state like Philadelphia and Pittsburgh, as casino poker rooms are located throughout the state.
An additional advantage is the state’s large borders. Unlike New Jersey, which is pinned to the Atlantic Ocean and only borders PA, and small portions of New York and Delaware, Pennsylvania borders nearly the entirety of southern New York, western Ohio, Maryland, and northern West Virginia.
The importance of this close proximity to other states will become apparent during the World Series of Poker, when out-of-state players will likely drive across the border in droves to participate in top-shelf tournament events, most notably the online bracelet events.
It’s reasonable to assume that PA will also see an influx of online poker players on Sundays, as the biggest majors should regularly guarantee somewhere in the vicinity of $200,000.
Then, there are the disadvantages
Unfortunately, the disadvantages of PA online poker are mostly of the industry’s own doing. Namely, regulators are enforcing bewildering restrictions on an operator’s ability to reach customers.
- A requirement that online poker games not be accessible from within PA land-based casinos.
- Forcing online poker skins to be in some way, shape or form connected to the license holder (i.e. sub-domains and branding).
- Limiting users to one screen name/account per license holder.
It’s still not entirely clear how damaging the restrictions on skins will be, as the law can be interpreted several different ways. But even in its most non-restrictive form, it will hamstring the industry.
The tipping point
Right now, WSOP/888 is the only network with a presence in every state where online poker is legal. That will change when Pennsylvania enters the mix, as presumably both PokerStars and GVC (both currently present in the NJ market) will set up shop.
While the presence of multiple operators is invariably a good thing for players, as competition will likely lead to stronger marketing and promotional rollouts, it does also suggest that traffic figures on WSOP/888 will rise more moderately on a per population basis when PA enters the mix than they did when NJ joined forces with NV and DE.
So whereas the entirety of the online poker market could conceivably triple, WSOP.com traffic may only go up by 1.5x. What that may ultimately mean is individual sites may have trouble reaching a critical tipping point.
As mentioned previously, in online poker, liquidity begets liquidity. However, there are junctures where the impact is compounded. One of these is when a site gets big enough to sustain a thriving fast-fold format.
If there were say just one network across all four states, we’re fairly confident fast-fold games would get off regularly. However, by spreading the wealth across two or three major networks, the biggest of which stands to have average cash game traffic of about 400 -500, the idea of fast-fold becomes less realistic.
This ideal also applies to one-off formats like Stud, 8-Game, and others, which could probably sustain if there was just one massive network, but will struggle in a multi-network atmosphere.
There are also concerns about the black market. These are less worrisome, as the benefits of playing in a safe and regulated landscape should be enough to convince players to make the switch.
Granted, some NJ players did abandon legal sites for the black market, as the black market sites were still considerably bigger. But as the population reach of legal sites increases, the one thing (size) that the black market has going for it takes a big hit.
The additional of Pennsylvania to the Multi-State Internet Gaming Association will prove transformative for the legal US online poker industry.
Sites like WSOP.com will benefit widely from the increased population reach, especially during the summer months when players from neighboring states will be coerced to Pennsylvania. But WSOP and 888 won’t be the only beneficiaries of a four-state pact, as both PokerStars and GVC could become major players.
Heavy competition in what still stands to be a smallish market is a double-edge sword. On one hand it incentivizes individual sites to reach higher, encouraging greater overall traffic. On the other, too much competition limits the ability of operators to grow, as even in a four-state network the population cap is still rather low.
Finding that balance will be key.
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