New Jersey licensing: Six talking points
A host of European operators and their US counterparts are now permitted to launch later this month, but how the final egaming landscape will look is still very much unclear
1. PokerStars left out in the cold “ for now
The decision by the New Jersey’s regulator to leave the world’s most popular online poker site out of its second licensing round may not have come as much of a shock, but the impact of the decision, be it a delay or a snub, was felt throughout the industry.
PokerStars has established a partnership with one of the leading Atlantic City brands “ Resorts. It has committed to investing $10m in a new poker room alone, while hinting that its presence in the state will lead to some 200 jobs being created. The decks have been cleared legally, too, removing barriers to entry which have loomed since Black Friday; it settled its civil lawsuits with the US DoJ last year before CEO Mark Scheinberg reached a $50m personal settlement in June.
Yet the Division of Gaming Enforcement appears to remain unconvinced. One New Jersey lobbyist told eGR the matter may even have been influenced by the state’s Governor Chris Christie who, with plans to run for President, is unlikely to make a decision that could be used to attack him at a later date.
So while PokerStars obtaining a licence is by no means out of the question, the initial delay suggests some kind of compromise is the more likely outcome.
2. Amaya Gaming shows strong hand
The Canadian supplier has quietly gone about its business in New Jersey and has kept its dealings under wraps until the last minute. Now the fog has cleared, we can see that Amaya has grabbed an enviable chunk of market share. From launch date, it will be supplying services to partnerships involving four of the six sites set to launch later this month.
Its casino gaming platform will be integrated into bwin.party/Borgata’s sites, as well as CaesarsCasino.com and GoldenNugget.com. Meanwhile its Ongame poker product will be offered through the latter and also Betfair’s New Jersey-facing site. It is only absent from the Ultimate Gaming-Trump Taj Mahal partnership and Tropicana’s deal with Gamesys.
After a frenetic 18 months of acquisitions and strategical positioning, CEO David Baazov’s plan is falling into place. Amaya now has a full complement of online products and it is showing the competition that it means business.
3. European brands will be in the game from day one
The familiar names of 888, bwin.party and Betfair will be among the choices for New Jersey gamblers, as all three prepare to launch their own branded websites later this month.
Accustomed to success this side of the Atlantic, these operators face a baptism of fire as local brands spend big to win market share. How they compete against the established land-based names of Caesars, Tropicana and Borgata remains to be seen, and how easily they maintain their B2B relationships with an aggressive marketing war is also a big question.
If finding a partner and route into the state was hard, the first six months of operations is likely to be even tougher.
4. Paddy Power is waiting in the wings
The Irish operator has made no secret of its desire to establish a US business, and efforts to find a commercial partner were ramped up after New Jersey regulated back in February. It appeared of the DGE’s list of companies eligible for the issuance of a transactional waiver last week, however that will only be applicable once Paddy Power has found itself a casino partner in the state.
Paddy Power possesses the marketing expertise and brand to succeed however it is a relatively unknown quantity among US casinos and gamblers. It also lacks poker software. Yet despite most of the Atlantic City casinos entering into partnerships with other operators, there is still room for Paddy Power to get involved. Under state law, five skins are allowed under each operator licence, which means a Paddy Power-branded casino site, using its own proprietary “ and proven “ content, may not be unrealistic.
5. The unknown quantity of Pala Interactive
Former bwin.party co-CEO Jim Ryan’s new venture popped up on Friday’s list of those companies yet to secure a partnership in New Jersey, and little is known about California-based Pala Interactive and what it intends to do in the Garden State.
Its formation was announced in June and since then Pala Interactive has signed geolocation and player verification deals with GeoComply and CAMS respectively. It runs off the Realtime Edge gaming software, which potentially means Pala can offer online poker, casino and lottery games, however it is unclear if it has B2B or B2C intentions outside of California.
What we do know is that Ryan is a seasoned competitor and his know-how could see Pala Interactive sneak in to New Jersey via the backdoor. As one industry consultant put it, Pala has left it very late to “find a pretty girl”.
6. Trouble at the Atlantic Club and Revel
The sad news that the Atlantic Club has filed for bankruptcy might hold a silver lining for online operators hoping to gain entry into the New Jersey market. The casino, which looked to have been making early progress through its doomed deal with PokerStars, has been looked at by several buyers over the past 12 months.
Any potential suitor will no doubt recognise the opportunity presented by online gaming in New Jersey, and leasing its licence to operate a site could be a quick source of revenue.
Meanwhile the Revel’s management said on Monday that they are pursuing “strategic alternatives” for the business. Analysts in the state are predicting a sale or at worst another bankruptcy filing, meaning it could emerge as another willing partner for online gaming in the not too distant future.