More about NJ’s legal online gambling industry
Online poker and casinos are legal in New Jersey. The New Jersey Division of Gaming Enforcement regulates all games. Atlantic City casinos are licensed for up to five brands. These resorts partnered with experienced software providers to produce this service.
New Jersey online gaming partnerships
There are six companies that operate casinos in Atlantic City. Five of these companies hold NJ online gaming licenses. The only one that does not is Trump Taj Mahal. It once partnered with Ultimate Gaming, which dropped the agreement when Trump Taj Mahal and its parent company filed for bankruptcy in 2017.casinò dealer - Automatenspiele - live roulett - blade spelautomater - casinò - cleopatra 2 spelautomater
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Borgata is the most profitable casino in Atlantic City. It parlayed this success to the Internet. Borgata is the highest grossing New Jersey interactive platform to date. Its software provider is bwin.party. In terms of cash game players, Borgata and Party Poker are two skins on the largest New Jersey poker network. Pala Casino, which is a tribal interactive company based in California, offers a casino platform. Pala does not have a poker room at this time but stated it plans to spread one in the future.
MGM now fully owns Borgata. Previously, MGM and Boyd co-owned the property. Now that MGM is the sole owner, they are expected to launch an online casino brand before too long. Read our preview of MGM’s NJ online casino.
Caesars Entertainment partnered with 888. The two sites operate under the Bally’s and Caesars licenses in Atlantic City. These brands include WSOP.com, Harrah’s Casino, Caesars Casino and 888. WSOP.com and 888 share a poker network. 888 powers it.
Golden Nugget is a small casino on the marina. It has grown a successful online business in New Jersey. Golden Nugget spreads a variety of games from multiple distributors. Golden Nugget is partners with Betfair, who was forced to bail on Trump Plaza when it folded in 2014.
Mohegan Sun manages Resorts in Atlantic City. Both operate online casinos but do not have poker at this time. PokerStars joined the Resorts interactive license in 2016.
Tropicana partnered with Gamesys. The two licensed New Jersey casinos operate under the brands Tropicana and Virgin Casino.
New Jersey online gaming software
There are many versions of casino and poker platforms in New Jersey. While there is some variation between the sites, there is also overlap, especially among the casino games.
888 is licensed through Bally’s in Atlantic City. It provides the poker platform for WSOP.com. 888 is a skin on that network. It also uses proprietary software for casino games. It has a limited library. There are only about a dozen slots, one video poker game, roulette and blackjack.
Bwin.party provides the poker platform to Borgata. Party Poker is a skin on that network. The casino platforms combine proprietary games with more traditional slot providers.
International Game Technology, often referred to as “IGT”, provides slots, video poker and table game software to most New Jersey casinos. Its content includes Game King video poker, blackjack, roulette, and slots Cleopatra, Kitty Glitter, Double Diamond and Dungeons and Dragons. Every New Jersey site except 888 uses games provided by IGT.
Bally Technologies is a slot manufacturer for bricks-and-mortar casinos. It provides its most popular titles to New Jersey online casinos. Its partners include Caesars, Harrah’s, Borgata, Tropicana and Virgin Casino.
Amaya Gaming compiles software titles from multiple brands into one platform. It powers these games under a single license. Its main partner is Resorts. Amaya Gaming will launch PokerStars and Full Tilt in 2016. It acquired those brands in 2014 from Rational Group.
SHFL is often referred to as Shuffle Master. It owns the rights to numerous table games. These include Three Card Poker, Four Card Poker, Ultimate Texas Hold’em and Let it Ride. Every New Jersey online casino except 888 uses some form of SHFL games.
New Jersey online gaming performance
New Jersey online casinos launched on November 21, 2013. In December 2013, the first full month of action, New Jersey online casinos won $7.4 million. Two years later, that number rose to $13.2 million. That is a difference of 56 percent. The increase was steady with little seasonal variance.
That performance in November 2015 was the best in the history of New Jersey online gaming. Poker and casino games are reported as two different products. Revenue from these games is going opposite directions.
Poker rake was $2.9 million in December 2013, the first full month the games were live. It peaked the following month at $3.4 million. Poker rake slumped ever since. There were some seasonal boosts during the winter. Poker revenue bottomed at $1.8 million in September 2015. It has since rebounded 11 percent, as of November 2015. Learn even more about NJ online poker here.
Convergence of live and online gaming
Caesars Interactive sites
Caesars Casino, Harrah’s Casino and WSOP.com – offer a VIP program that tie into Total Rewards. That is the loyalty program for Caesars Entertainment’s live casinos. Players that achieve the Diamond tier for four consecutive months may convert that into the same level at bricks-and-mortar casinos. Seven Stars players may also do this. Live casino players may move their status to the online sites to receive higher returns from casino and poker action. The status must be maintained at the gaming site.
These Caesars sites also run promotions that include its resorts. This includes WSOP.com satellites to live events or ways for casino players to earn Reward Credits that can be used at Caesars resorts in Atlantic City.
Borgata’s iRewards program gives benefits to its poker and casino players. Satellites to live Borgata poker tournaments may be won at its site. Casino players can earn hotel comps, free meals and other perks at Borgata’s Atlantic City resort. Its VIP program also gives players better value when converting points to comps at Atlantic City as opposed to cash or poker tournament tickets.
The other New Jersey sites offer promotions that connect with the casino games. This includes drawings for free hotel rooms and meals. Concierge and host programs also have discretionary ability to award comps at Atlantic City resorts.
New Jersey site safety
The Division of Gaming Enforcement regulates online gaming sites. This is the same department under the state’s attorney general office that regulates all Atlantic City casinos.
The New Jersey Division of Gaming Enforcement is the strongest casino regulator in the world. Its strict oversight is displayed in the fact there have been no major issues with any New Jersey site. Every player received winnings. This includes a $1.52 million Let it Ride winner at Betfair.
There is also proof that security at the sites is top notch. A player attempted to defraud a site out of $10,000, according to the Division of Gaming Enforcement. She was arrested after claiming her identity and credit card were stolen. Geolocation software pinpointed the transactions occurring at her address, according to law enforcement.
Other important points regarding NJ online casino security:
- New Jersey online gaming sites must hold all player balances in a separate account from operating funds.
- Players must pass a verification process that ensures they are who they say they are.
- This also prevents minors from gaining access to real money online gaming.
- Problem gamblers may opt out of the sites through a simple process.
- Geolocation software ensures players are within the state at the time of action.
- All deposits and withdrawals are processed through a secured site. Regulated New Jersey sites use the same encryption as banks.
Now that state-regulated online gambling and poker is in its third year of operation, little has changed since the first year.
In 2013, three states took advantage of the opportunity — Nevada, Delaware, and New Jersey — and as of mid-2016, the option is still available in the same three states and no others. While New Jersey and Delaware both offer players a choice of casino gambling or poker, Nevada regulated online gambling is limited to poker only.
How state-run online gambling is faring in the U.S. so far
New Jersey, the last of the three states so far to launch online gambling, continues to lead the other two big time both in number of sites and total revenue. (Here are May’s numbers, for instance.)
In New Jersey, five operators (Borgata Hotel Casino & Spa, Caesars Interactive Entertainment – NJ, Golden Nugget Atlantic City, Resorts Casino Hotel, and Tropicana Casino & Resort) are currently offering a total of 12 online casinos and five online poker rooms.
These numbers are in striking contrast to online gambling in Nevada and Delaware. In Nevada, two operators, WSOP.com and Real Gaming, each have a poker site, with WSOP accounting for about 99 percent of the business.
In Delaware, all online gambling is under the control of the Delaware State Lottery in partnership with 888 Holdings. Each of the three licensed racinos in the state — Delaware Park, Dover Downs, and Harrington Raceway and Casino — offers online gambling for both casino games and poker.
Even though initial revenue generated by online gambling fell far short of projections in all three states, there’s been a steady growth — demonstrably in New Jersey, and to a lesser extent in Delaware.
During its first full year of operation, NJ online gambling took in $122 million. During the calendar year 2015, NJ iGaming generated $148.8 million in revenue. This was 21 percent higher than 2014. The figures so far for 2016 suggest continued growth, up an impressive 29 percent from last year.
The first full year of online gambling in Delaware generated $1.4 million. This was followed by an increase to $1.8 million in revenue for 2015. The most recent 2016 figures released by the Delaware Lottery show that total iGaming revenue has established new records for three consecutive months (March, April, and May).
A major contributing factor to the growth in online gambling revenue in Delaware in 2015 and 2016 has been the combined poker player pool with Nevada online players. Previously, there simply weren’t enough players to make the Delaware online poker games an attractive option.
Nevada stopped issuing separate reports for iGaming revenue at the end of 2014, but the relative contribution of online poker to the state’s total gambling market, which is estimated at $11 billion, is believed to be negligible. In fairness to both Nevada and Delaware, there’s no way that either state could come close to achieving New Jersey’s success. The Garden State has about triple the population of Nevada and Delaware combined.
Meanwhile several other states are currently offering online lottery ticket purchases but have not made the decision to offer online casino gambling or poker. The states to keep an eye on as the most likely second wave of legalized state-run online gambling are Pennsylvania, New York and California.
Casino online gambling doing very well in NJ, poker not so well
When online gambling was still in its infancy, the primary focus was on poker, with full-scale online casino gambling not taking off later.
NJ online players have a choice of five poker rooms. This includes the newResorts-run PokerStars. However, online poker has proven to be a tougher sell. In comparison to online casino gambling, which NJ players can’t seem to get enough of, the revenue coming in from online poker is lackluster.
This trend is apparent in the figures reported for 2015. Total online casino revenue in New Jersey for 2015 amounted to $125 million, up 33 percent from 2014, while poker revenue actually fell 18 percent to $23.8 million.
On the other hand, during its first month of operation — March 2016 — the long-awaited return of PokerStars.com to the U.S. resulted in tremendous traffic on that site. But now that the novelty has worn off somewhat, the extent to which PokerStars can keep up the momentum is uncertain. Meanwhile, the other NJ online poker rooms need to do a lot more to generate more traffic to their own sites to remain competitive.
Another notable but not surprising finding is the much stronger contribution of slots as compared to table games to online casino revenue.
At the NJ online casinos, approximately 70 percent of the revenue comes from slots, compared to 30 percent from table games. Just like in the Atlantic City land-based casinos, the online casinos have consistently offered many more slot games than table games. When new games are introduced online, they are much more likely to be a slot game.
Furthermore, slot play earns comp points at a much faster rate than table games, and the wagering requirements to clear bonuses are much lower for slots than for table games (and sometimes table games don’t count at all). Accordingly, there is little incentive to play the latter.
At the Delaware online casinos, the recently reported increases in revenue come from increased play on the video lottery terminals and also from poker, with the combined Delaware and Nevada player pool making that option more attractive. However, table game revenue has declined.
Unlike many online casinos run by offshore operators, neither the New Jersey online casinos nor the Delaware online casinos offer any live dealer games. This feature, perhaps more than any other, adds an element of fun and excitement to online table game play, making it a highly entertaining social experience closely resembling playing the same table games in a real casino.
The addition of this option in New Jersey and Delaware could go a long way towards generating increased interest in online table game play.
Online and mobile gambling are bringing more players to Atlantic City
According to Stephen Sweeney, president of the New Jersey State Senate and a keynote speaker at the East Coast Gaming Congress & iGaming Institute, “Atlantic City is on the rebound.”
Even in the face of increased competition from casinos in other states, and elsewhere in New Jersey, if the referendum to expand casino gambling to two casinos in North Jersey gets passed, he is optimistic about Atlantic City’s future.
Another speaking at the conference, Luisa Woods, Executive Director of Online and Internet Marketing at Tropicana Atlantic City, aid that previously inactive players or players who had never come to the property in Atlantic City are now coming due to their online and mobile gambling.
Also, many people who are coming to the casino to play are now playing online as well. At the Golden Nugget Atlantic City, according to Vice President of Online Gambling Thomas Winter, 80 percent of those who play at the Golden Nugget Online Casino are also coming to the Atlantic City casino, whereplay has increased 20 percent as a direct result.
Ongoing concerns and challenges facing state-regulated online casino operators
The reluctance of other states to go full speed ahead in trying to push legalized online casinos and poker rooms is probably due in part to the recognition of the difficult challenges facing them. New Jersey, Delaware and Nevada have all faced these same kinds of challenges.These include:
- Underage gambling
- Dealing with fraud and duplicate accounts
- Problems faced by players when trying to use credit cards to fund their accounts
- Need to get the word out to more people to keep attracting new players
- Keeping away illegal foreign operators trying to infiltrate the market
Tight regulation is key
All three states where state-regulated online gambling is legal impose a minimum age requirement of 21. Also, all three require that at the time of play, individuals must be physically located in the applicable state. In addition, Delaware requires that the player must reside in Delaware.
Geolocation can get tricky at times. For example, initially geolocation was causing problems in New Jersey with individuals who were very close to state borders, but the system is working much better now.
All three states use Know Your Customer (KYC) programs to verify customers’ identity, age, location and eligibility. While some players have expressed annoyance by all the checking and double checking, but the tight security system ultimately works for the benefit of the casinos and players alike.
According to New Jersey law, players whose age and identity cannot be verified by a standard KYC check must submit two forms of ID, one of which must be government issued with a picture and signature. In addition, all online players in New Jersey need to enter a PIN and answer two security questions in order to be permitted to log in to a site and play online for real money. Penalties for violators can range from exclusion to fines, forfeiture of winnings and jail time.
The New Jersey Division of Gambling Enforcement (NJDGE) has concerns about infiltration from unauthorized foreign operators. NJDGE Director David Rebuck wants to impose huge penalties to put fear into these operators.
Rebuck, addressing East Coast Gaming Conference and iGaming Institute attendees, stated that New Jersey has a great working relationship with other jurisdictions that may offer online gambling in the future. He believes that they are equally interested in making sure that foreign operators are shut out of their own potential market.
Account funding shouldn’t be a hassle
Gamblers are by nature impatient. When making deposits and withdrawals becomes too much of a hassle, players will be inclined not to bother.
Payment processing problems are still occurring due to the continued lack of acceptance of legalized online gambling by some credit cards and banks. However, the frequency with which players are reporting this problem is gradually decreasing.
Initially in New Jersey, players were having a tough time using their credit cards to fund their accounts. However, MasterCard is now approving 70 percent of all transactions, and Visa about 62 percent. Players can also use their PayPal account.
Surprisingly, a lot of NJ players still don’t know that they can gamble online
All in all, Rebuck is very pleased with the performance of online gambling in New Jersey. He is so pleased, in fact, that he thinks other states should look to its program as a model for what they need to do to establish and maintain a well-regulated online gambling industry.
However, even in New Jersey, there is plenty of room for improvement. Surprisingly, a lot of people in the state are still unaware of the online gambling option. So states and operators need to get the word out to more potential players. One recent trend that should help is the increased use of cross-promotions that encourage Atlantic City casino players to also play online, and vice versa.
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