International player pooling bill makes progress in NJ

Raymond Lesniak_NJ Senator

S980 would allow NJ licensed operators to offer their online platforms to players located outside of the US

Legislation proposing to allow online operators in New Jersey to offer their platforms to players located in countries outside of the US has been approved by a senate committee.

Bill S980, co-sponsored by Senators Raymond Lesniak and Jim Whelan, was approved by the Senate State Government, Wagering, Tourism and Historic Preservation Committee yesterday, and will now be heard by the Senate Budget and Appropriations Committee.

If passed into law the state’s Division of Gaming Enforcement would be responsible for issuing operators already licensed in the state with a Restricted Foreign Internet Wagering (RFIW) permit.

In January Lesniak amended the bill to remove language that would also have permitted sports betting in the state, but added provision to license payment providers.

Under the bill payment processing companies Casino Service Industry Enterprises before being able to process overseas internet gaming transactions in a bid to improve acceptance rates by the banks.

The bill is part of Lesniak’s grand designs for New Jersey to become an international hub for egaming, competing with the likes of Gibraltar and the Isle of Man.

He has also been a key figure in fighting for the legalization of sports betting in the state, which is appealing to the US Supreme Court to overturn the federal ban.

In other news:

-          Optimal signs deal with Borgata in NJ

-          Move to ban internet lottery games in Minnesota gains traction

-          IGT extends deal with Sony for Wheel of Fortune

NJ Governor slashes egaming revenue estimates

 

ChrisChristie-716x1024

Governor Christie revises initial estimate of state revenues from around US$200m in first fiscal year to just $34m  

New Jersey Governor Chris Christie has downgraded earlier estimates on how much tax revenue the state would generate through egaming by more than 500%.

Christie had predicted gross gaming revenues from internet gambling would hit US$1.1bn in the first seven months from launch, generating around $200m in tax revenues for state coffers.

Yet in his latest state budget plan announced on Tuesday, Christie revealed he now expects egaming tax revenues to reach just $34m for the fiscal year that ends 30 June, and predicted that number would increase to just $55m the following year.

However some industry experts expect revenue figures to climb once that market matures, and may even reach the initial estimates put forward by the governor.

“Estimates are always just that – estimates – and there are a lot of variables in play whenever a new market opens such as customer awareness and other factors relating to marketing and logistics,” David Deitch, an attorney at Ifrah Law, said.

“We expect those factors will all stabilize soon and, when they do, we expect results to come back in line with the estimates of expected revenues,” he added.

Gross gaming revenues from egaming in the Garden State have been mediocre to date and figures released by the state regulator showed total revenues for December reached just $7.4m.

Although January saw a 28% increase to $9.5m they still failed to meet industry expectations with New Jersey Senator Raymond Lesniak branding them “dismal”.

New Jersey is fairing much better than Delaware, which saw net revenues from regulated internet gaming total just $145,000 in January.

In other news:

-          Online lottery ticket sales shelved in Colorado

-          Michigan Lottery launches egaming app

-          Nevada and Delaware compact: five talking points

NJ appeals to Supreme Court to legalize sports betting

AmericanFootball_eGRNA

State Senator Raymond Lesniak says he expects the court to make a decision on whether it will take the case by June

New Jersey has filed an appeal with the US Supreme Court in a last-ditch attempt to overthrow federal law and legalize sports betting in the state.

Sports betting is illegal in all bar four US states after a federal law to ban the activity was passed in 1992.

Nevada, Delaware, Montana and Oregon managed to legalize the practice before the law came into effect.

The Garden State has made several attempts to legalize sports betting over the past few years, with Governor Chris Christie signing a sports betting bill into law last year.

Christie said the state would ignore the Professional and Amateur Sports Protection Act and permit sports betting at casinos and the state’s four race tracks in a bid to boost revenues in Atlantic City.

However hopes for the provision of sports betting in New Jersey  received a blow in March 2013 when a federal judge granted a permanent injunction against the state, backing the argument of four major professional sports leagues who claimed legalizing sports betting would heighten the chances of corruption and match fixing.

The state then filed an appeal with the Third Circuit Court of Appeals, which ruled against New Jersey last September and left the Supreme Court as the only remaining chance for success.

Senator Raymond Lesniak, a supporter of sports betting, said he expects the court to make a decision on whether it will take the case by June.

The Supreme Court is selective in the cases it takes – of about 10,000 petitions received each year, the court grants and hears around 80 cases, or less than 1%.

In other news:

-          US investment firm set to buy 6% stake in bwin.party

-          Louisiana Governor opposes egaming regulation

-          Florida considering internet gaming regulation

The week in 60 seconds

eGRNA_the week in 60 seconds

A round-up of the good, the bad and the ugly during a week which saw a new online poker in California and a NJ Senator claiming the state needed PokerStars more than ever

Story of the week

Pechanga-led group enters Cali internet poker fray

The biggest story of the week was the news that a coalition of powerful Californian tribes led by the Pechanga Band of Luiseño Indians is poised to introduce new online poker legislation, as part of what appears to be the most protectionist set of proposals seen to date.

 

The new bill is backed by eight influential tribes, including the Agua Caliente Band of Cahuilla Indians, the Temecula Band of Luiseño Mission Indians, and the Barona Band of Mission Indians.

Under the proposals the number of licenses the state can issue is unlimited, tax rates would be quarterly fees amounting to 5% of an operator’s gross gaming revenue (GGR), while one-off license fees would be set at US$5m.

The new draft will likely add to the momentum which has gradually been building in the state, with several tribes signing tentative agreements with platform developers and suppliers.

Good week

New bill paves the way for egaming success in Illinois

Illinois lobbyists are hopeful of egaming progress this year following the introduction of a new gambling expansion bill.

The legislation would permit operators to apply for an online gambling license, as well as establishing five new casinos and authorizing slot machines at racetracks and airports.

A similar bill has failed to pass into law on two previous occasions, with state regulators voicing concerns over its ability to cope with the increased scale of state’s gambling industry.

However supporters say the state’s dire financial situation means lawmakers are desperate to find new ways of bolstering state coffers.

Bad week

Lesniak says latest NJ egaming revenues are “dismal”

Regulated internet gambling generated gross gaming revenue (GGR) of US$9.5m in New Jersey in January, up 28% on the previous month according to figures released by the state’s Division of Gaming Enforcement (DGE).

But despite showing signs of improvement the figures have been called ‘dismal’ by New Jersey Senator Raymond Lesniak, who says they are a long way off estimates from the likes of Governor Christie, who predicated the New Jersey egaming market to be worth $1.1bn within seven months of launch.

“Compared to Governor Christie’s unrealistic projection, the numbers are dismal,” said Lesniak.

The Borgata, which has partnered with online operator bwin.party in the Garden State, remained dominant with revenues for the month of January totaling $3.9m, up 16% on the previous month.

Quote of the week

“We pride ourselves on our strong, long-term relationships with clients, so when a former client sued us we were extremely shocked and disheartened. We can’t speculate why Chad Elie chose to strike out and blame others for his actions, we can only speak to the facts,” said Jeff Ifrah on a Nevada judge throwing out a claim against Ifrah Law filed by convicted Black Friday payment processor Chad Elie.

In other news:

-          New Jersey revenue figures: five talking points

-          Affinity Gaming CEO steps down

-          Caesars subsidiary acquires social gaming studio Pacific Interactive

New Jersey revenue figures: Five talking points

New Jersey Road Sign

What we can learn from yesterday’s news that gross gaming revenue had increased – but not as fast as many hoped 

1) Previous assumptions must be disregarded

New Jersey Senator Raymond Lesniak said what many in the industry were thinking when he labelled the latest egaming revenue figures “dismal”. Despite increasing 28% on the previous month they are still a long way off meeting moderate estimates from the likes of Eilers Research, which predicts the market to be worth up to $200m by the end of the year.

That said, increasing revenues by a third compared with the previous month will satisfy some CEOs for now, especially considering issues with geolocation and payment processing are yet to be fully resolved. It’s still early days in the Garden State, and as marketing efforts ramp up and operators launch new products there is still plenty of time for the market to mature.

One question that can’t be ignored is what impact PokerStars – with its large and loyal fan-base – would have had on the market if the New Jersey regulator had not taken the decision to suspend its license application for two years.  Would they provide the key to unlocking its full potential? Lesniak seems to think so.

“The less than stellar results are a result of PokerStars not being in play,” he said.

2) Online casino driving revenues

The latest figures reveal that online revenue is the driving force behind growth, accounting for 64% – or $6m – of total gross gaming revenues. For the first time since launch the Borgata saw revenues for its online casino platform ($2m for the month) surpass player spend on its internet poker sites PartyPoker.com and BorgataPoker.com ($1.8m for the month).

At Caesars Interactive the difference in revenues generated from its online poker and casino platforms for the month was negligible. Poker sites active under its licenses – including 888.com – attracted revenues of $1.52m compared with $1.51m for its online casino product. Last month poker generated $1.07m, with online casino revenues totaling $962,369.

These are signs that the market is normalizing following a surge in poker signups at launch, due to players who took a break from the game post Black Friday and UIGEA hungry to return. With online casino games yielding much greater returns, the sooner it outgrows the poker the better.

3) More players wager less

More than 70,000 new internet gaming accounts were created during January, taking the total since launch to 197,782. The rise in player signups is reassuring when compared with Delaware, which saw signups drop by more than half in its second month of regulated egaming.

According to Eilers Research, the figures imply gaming win per account of $48, down from $59 for the previous month. This, in part, can be attributed to individual players creating more than one egaming account and spreading their play across multiple platforms.

Morgan Stanley estimates that only 2-3% of New Jersey’s adult population have so far created an egaming account, so there is still a large potential player market for operators to tap into. Cue varied and innovative marketing campaigns designed to reach an array of demographics.

4) Borgata and Caesars dominate online poker

New entrants to the market were always going to have a tough battle on their hands when taking on established giants such as the Borgata and Caesars. But with the pair claiming almost 97% of the New Jersey internet poker market between them, the fight appears to be over before it has even begun.

Betfair, which provides the Trump Plaza with its online platform, has been hit the hardest with GGR from its poker product totaling just $11 for the month, down from $38 in December. Its casino product fared slightly better, with revenues totaling $556,996.

Other more established operators such as the Golden Nugget and Tropicana are yet to launch their poker platforms, but will be at a huge disadvantage having missed the first mover advantage enjoyed by the Borgata and Caesars.

It begs the question whether some operators will have to join networks like the All American Poker Network in order to boost liquidity and grow revenues. Some online operators may even decide to shelve their poker products altogether and focus solely on online casino if the long-term returns on their investments look uncertain.

5) Marketing for success

With regulated internet gambling now very much up and running in the Garden State, operators will have focus their attention on marketing in order to attract new players, grow the market and thus increase overall revenues.

Expect more high-profile sponsorship deals like the partnership signed between PartyPoker and the Philadelphia 76ers and the New Jersey Devils, and media-savvy gimmicks like 888 offering New York Giants wide-receiver Hakeem Nicks $88,800 to legally change his name to 888.com.

But what of the smaller operators with shallower pockets? Will they see the benefit of investing millions of dollars in marketing and advertising in order to claim such a small share of the pie? Or will that spend be vital in securing the future viability of their platform in the state?

It could very well be a catch-22 situation that may see one or more operators to consider their presence in the market.

In other news:

-          Playtika set to acquire social gaming studio Pacific Interactive

-          Nevada judge dismisses claims against Ifrah Law

-          Interview: Jim Ryan is back and means business

Lesniak says latest NJ egaming revenues are ‘dismal’ despite 28% increase

Raymond Lesniak_NJ Senator

Gross Gaming Revenues for the month of January increased 28% to US$9.5 with the Borgata still leading the way with a 41% share of the market 

Regulated internet gambling generated gross gaming revenue (GGR) of US$9.5m in New Jersey in January, up 28% on the previous month according to figures released by the state’s Division of Gaming Enforcement (DGE).

But despite showing signs of improvement the figures have been called ‘dismal’ by New Jersey Senator Raymond Lesniak, who says they are a long way off estimates from the likes of Governor Christie, who predicated the New Jersey egaming market to be worth $1.1bn within seven months of launch.

“Compared to Governor Christie’s unrealistic projection, the numbers are dismal,” said Lesniak.

“The less than stellar results are a result of PokerStars not being in play, ineffective advertising by internet operators, and banks not allowing their credit cards to be used for internet gaming. I expect those obstacles to be overcome and revenues to steadily grow in the future,” he added.

The Borgata, which has partnered with online operator bwin.party in the Garden State, remained dominant with revenues for the month of January totaling $3.9m, up 16% on the previous month.

Its PartyPoker site generated GGR of $1.8m for the month, which was surpassed for the first time by its online casino offering which saw revenues hit $2m.

Caesars Interactive, which operates the World Series of Poker and CaesarsCasino sites, remained in second place and saw GGR increase 49% to $3.03m.

Poker sites active under its licenses – including 888.com – attracted revenues of $1.52m compared with $1.51m for its online casino product.

Third in overall GGR was the Trump Taj Mahal ($858,351), followed by the Tropicana ($841,565) and the Trump Plaza ($557,007).

“Our market-leading performance is testament to the quality of our online product and the power of the Borgata brand. These results also once again demonstrate online gaming’s potential to expand our business,” said Keith Smith, CEO of Boyd Gaming which operates the Borgata.

“About 85 percent of our online players have not had rated play at Borgata in at least two years, showing there is little overlap with our land-based business. Online gaming is growing our database, creating a long-term opportunity to market Borgata to an entirely new group of customers,” he added.

Golden Nugget saw the greatest increase in revenues month on month, with figures soaring 69% to $286,922 following the delayed launch of its platform.

At the other end of the spectrum the Trump Plaza and its online partner Betfair US were still struggling to generate revenues from its online poker platform, recording GGR of just $11 for the month of January.

In other news:

-        Nevada judge dismissed claims against Ifrah Law

-        Affinity Gaming CEO to step down

-        Amaya completes CA$70m Wagerlogic sale

The week in 60 seconds

eGRNA_the week in 60 seconds

A round-up of the good, the bad and the ugly during a week which saw Senator Lesaniak amend his NJ foreign internet wagering bill, and CAMS name Frank Fahrenkopf as an advisor

Story of the week

Lesniak amends NJ foreign gambling bill

New Jersey Senator Raymond Lesniak has made numerous changes to the language of his Restricted Foreign Internet Wagering (RFIW) bill, including removing provisions for sports betting.

If passed into law, the bill would allow licensed operators in New Jersey to offer their online platforms to players outside of the US.

Senator Lesniak told eGR North America that he had removed sports betting provisions to expediate the passage of the bill into law.

Under the modified language, operators applying for a RFIW permit must already have been issued an egaming license by the state’s Division of Gaming Enforcement (DGE).

Payment processing companies will also have to be licensed as Casino Service Industry Enterprises before being able to process overseas internet gaming transactions.

Good week

IGT posts revenues of US$541m for Q1 2014

International Game Technology (IGT) has posted Q1 revenues of US$541m, a 2% increase on the same period last year, thanks to the continued growth of DoubleDown and a first launch in New Jersey.

Social gaming subsidiary Double Down Interactive, which IGT purchased Double Down Interactive for $500m in January 2012, saw revenues increase 57% to $65m for the quarter and 6% sequentially.

The launch of real-money gaming in New Jersey also helped increase overall online revenues by 41% from $52.9m in 2012 to $74.6m. IGT supplies its products to the likes of the Golden Nugget and Gamesys in the Garden State.

People move of the week

CAMS names Frank Fahrenkopf as company advisor

Player verification service provider Central Account Management System (CAMS) has appointed former American Gaming Association CEO Frank Fahrenkopf as a company advisor.

Fahrenkopf, who left his role at the AGA in January 2013 after almost 20 years, will offer strategic guidance to CAMS as it looks to grow its operations in regulated egaming markets in the US.

“Frank’s considerable political and gaming acumen will be invaluable as we forge ahead in New Jersey and into other states,” said Matthew Katz, CEO of CAMS. “He wrote the playbook on how industries like ours can mature and expand within the United States.”

Quote of the week

“Rod Phillips has led OLG to its highest net profit to the Province since 2005. He has captained the design and launch of the modernization of Ontario’s lottery and gaming industry. Under his watch OLG has achieved its highest level of public confidence,” said Philip Olsson, chair of the OLG Board, on CEO Rod Phillips surprise departure.

In other news:

-          IGT posts revenues of US$541, in Q1 2014

-          Louisiana egaming bill expected this year

-          OLG boss Phillips steps down

Lesniak amends NJ foreign gambling bill

Raymond Lesniak_NJ Senator

Changes to the langue include removing provisions for sports betting and licensing payment processors to improve transactions with banks

New Jersey Senator Raymond Lesniak has made numerous changes to the language of his Restricted Foreign Internet Wagering (RFIW) bill, including removing provisions for sports betting.

If passed into law, the bill would allow licensed operators in New Jersey to offer their online platforms to players outside of the US.

Senator Lesniak told eGR North America that he had removed sports betting provisions to expediate the passage of the bill into law.

“I have removed the sports betting element as it would likely encounter legal challenges and slow the process of the bill in passing into law,” he said.

Under the modified language, operators applying for a RFIW permit must already have been issued an egaming license by the state’s Division of Gaming Enforcement (DGE).

Payment processing companies will also have to be licensed as Casino Service Industry Enterprises before being able to process overseas internet gaming transactions.

“I have spoken with the banks and they have said they feel more confident processing payments from licensed vendors, which is why I have added this element into the bill,” said Lesniak.

Lesniak is confident the bill will encounter little opposition in becoming law, and will help boost egaming revenue figures for the state.

On Tuesday the DGE released figures that showed egaming had generated $7.4m in gross gaming revenue its first month in the Garden State, lower than some estimates.

“Without a doubt this bill will be passed into law this year. The revenue figures released earlier this week were decent and I expect them to improve over time. I believe my bill, and elements like the licensing of payment processors, will help revenues grow even further,” he added.

In other news:

-          The week in 60 seconds

-          California online poker bills set to die

-          Illinois Lottery launches mobile app 

The week in 60 seconds

eGRNA_the week in 60 seconds

A round-up of the good, the bad and the ugly during a week which saw Golden Nugget go live in New Jersey, and new research suggested the US egaming market won’t be as valuable as many predicted  

Story of the week

Almost 100,000 sign up for egaming in New Jersey

The New Jersey Division of Gaming Enforcement has revealed that nearly 100,000 residents have signed up to egaming sites since they were launched last month.

A total of 91,531 individual accounts have been created across all the sites that are currently live.

The figures come as the New Jersey internet poker market continues to outgrow Nevada, according to stats from rankings site PokerScout.

PartyPoker’s New Jersey is leading the way with a weekly average of 240 cash players, with Caesars World Series of Poker (WSOP) site recording an average of 150.

In comparison, in Nevada WSOP has a weekly average of 110 cash players, with Ultimate Gaming’s Ultimate Poker site recording 80.

Good Week

Golden Nugget Casino goes live in NJ

The week got off to a good start for Golden Nugget, which launched its online casino platform in New Jersey after being given the green light by the Regulator.

Players logging on to goldennuggetcasino.com will be able to access 77 online slots, video poker and table games from platform partners Amaya, Bally Technologies, IGT and SHFL Entertainment.

The operator plans to launch its online poker platform – goldennuggetpoker.com – in January, as well as a mobile and tablet version of its casino and poker offering.

Golden Nugget delayed its launch into the New Jersey market saying it needed more time to iron out bugs relating to some of its third party content and payment solutions.

Deal of the week

Sportech to operate sports betting bars in California

Sportech has extended its reach in the US market after signing a deal with Southern California Off Track Wagering to operate up to 10 horserace betting venues across the state.

Sportech will open its first branded bar, restaurant and betting venue in the City of Norco, Southern California, in summer 2014.

The 10,000 sq ft facility will be developed under a joint venture between Sportech and the Silky Sullivan Group, a food and beverage operator based in Southern California.

The gambling market is estimated to be worth $15bn in the Golden State, despite just 36 venues being licensed to take bets on horseracing.

Quote of the week

“I think next year PokerStars will receive its supplier license from the DGE by the end of next year. The regulator has outlined the changes they need to make to be able to operate in New Jersey, and I think they will iron those issues out in 2014.” New Jersey Senator Raymond Lesniak on his egaming predictions for 2014.

In other news:

-          Predictions 2014: Rob Gallo

-          Sportech launches online platform in New York

-          Feature: States of the future

Predictions 2014: Senator Raymond Lesniak

Raymond Lesniak_NJ Senator

New Jersey Senator Raymond Lesniak outlines his predictions for US egaming in 2014, including the return of PokerStars and the first state compacts

I have seen the future of regulated internet gambling across the United States and across the globe, and its name is New Jersey. It took two years to accomplish my goal of making New Jersey the Silicon Valley of egaming because, in part, of strong opposition from some of New Jersey’s bricks-and-mortar casinos, who were chasing the dream of federal legislating for egaming in America.

Thankfully over time they, along with various politicians and lobbyists, came to their senses and embraced egaming. Now they are able to reap the benefits of my legislation, saving thousands of Atlantic City jobs in the process, as well as creating many new employment opportunities and more operators and companies flock to New Jersey.

The next step towards my goal of turning New Jersey into a Mecca for egaming is to establish the state as a central hub for internet gambling in the United States. This is a daunting task, but one I know New Jersey can tackle head on. My latest bill, if passed into law, will allow the Division of Gaming Enforcement to issue operators a Restricted Foreign Internet Wagering permit, allowing them to offer their sites to players in jurisdictions outside of the US.

I know the bill will encounter opposition along the way, most forcibly from Sheldon Adelson. He has already said he will spend whatever it takes to shut down egaming not just in New Jersey but across the whole of the United States. While Adelson won’t be able to stop egaming in New Jersey, he may discourage other states from following our lead. But that won’t deter me and my mission to help other states regulate and implement internet gambling.

The bottom line is if you want to know what is happening with the future of egaming, pay attention to what is happening in New Jersey next year. Here are my top four predictions for 2014.

1) State compacts

New Jersey will establish at least one interstate compact next year. When people start to hear about the revenues generated from egaming in the Garden State, as well as the positive feedback from residents who have taken part in egaming, more states will want to join us.

2) More states will come online

It’s only a matter of time before more states sign up to regulated online gambling. We already know that Pennsylvania is conducting a study into egaming in 2014, and California seems to be getting closer to legalizing internet poker for its residents.

3) PokerStars will return

I think next year PokerStars will receive its supplier license from the DGE by the end of next year. The regulator has outlined the changes they need to make to be able to operate in New Jersey, and I think they will iron those issues out in 2014. I hope they will then announce a series of international poker tournaments to be hosted in Atlantic City, putting it back on the map as a prominent gaming destination.

4) NJ becomes an egaming hub

Next year my new bill will pass and New Jersey will become an international egaming hub. I don’t expect it to encounter anywhere near as much opposition as my past bill, as egaming is definitely building momentum in the state and more and more people are seeing what an asset it is for New Jersey.