As you all are aware, the U.S. Internet gaming debate is no longer a hypothetical one, nor is the question of whether a federal bill will pass before state-by-state regulation occurs. 

While the latest attempts to pass a federal iGaming bill failed, and although several federal iGaming bills have been proposed since then, gamblers in Nevada, Delaware, and New Jersey have begun real-money betting online. It would be an understatement to say that much has been written about the advent of iGaming in the United States. That said, and knowing that new headlines may have been written by the time this column goes to press, there is still more to write about. Even more importantly, there is more to act upon.

Has iGaming been a success so far?  Nevada, where poker is the only authorized game, has not released its revenue figures yet. However, we do know there are three sites operating in Nevada and that several more may be joining their ranks soon. We also know that both revenues and number of customer accounts established have been increasing. Furthermore, and particularly with the entry of Caesars Interactive Entertainment into the market, casinos have been cross-marketing to iGaming players with promotions and poker tournaments. As for Delaware, due primarily to the size of the state, the revenue numbers have been lower than anticipated. There is hope that the historic compact between Nevada and Delaware will boost those revenues.

That brings us to New Jersey. Although regulators and the gaming industry worked tirelessly and met the November 26, 2013 go-live date, initial results were somewhat disappointing, partially due to geolocation and other challenges. Nevertheless, operators and analysts remained optimistic and opined that iGaming would be successful and a large revenue generator in New Jersey, but cautioned it would be an evolutionary and not a revolutionary process. In other words, success would come in the form of a slow and steady increase in revenues and number of customer accounts. 

Indeed, a recent study conducted by The Richard Stockton College of New Jersey’s Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT) showed 2.5 percent of New Jersey adults have already gambled on a legal New Jersey website. Dr. Posner, executive director of LIGHT, said that the results of a recent Internet gambling poll suggests that 7.5 percent of New Jersey adults, approximately 250,000 people intend to do gamble online within the next 12 months. “It’s important to note that individuals can open more than one wagering account and this projection should be seen as a baseline since marketing of Internet gaming has just begun,”  Posner said.

As the months have passed, the geolocation issues and other challenges have been minimized, and increased marketing efforts have occurred. Additional casino licensees have entered the market. The release of New Jersey’s February figures show revenues increasing by 9 percent from January to February for a total of $10.3 million for the month, with 26 percent more customer accounts opening for a total of 248,241 customer accounts.  Importantly, casinos have reported many new customer accounts opened by individuals who have never visited Atlantic City. As in Nevada, cross-marketing efforts to bring those individuals to the land-based casinos have begun.

 Despite the positive signs, in order for iGaming, especially poker, to be a success in the United States, more jurisdictions need to enter into compacts with each other. With respect to legislation, many jurisdictions are actively trying to pass iGaming legislation, whether it is for poker only, or for all games. Currently, it appears Massachusetts and California have been the most active in trying to enact legislation, but efforts are being conducted in many other jurisdictions including Illinois and Pennsylvania. As for agreements among jurisdictions, Delaware and Nevada have crafted and executed an agreement with respect to the offering of poker that will increase the player pool and (hopefully) player participation in both states.  As the first of anything is often the most difficult, there is hope that the model can be expanded to include other jurisdictions with iGaming, as well as jurisdictions which could compact as a way to quickly enter the iGaming market. New Jersey is well-positioned to be such a super-hub. And we need not be limited to increasing the player pool in the United States only. States are also permitted to enter into agreements with foreign jurisdictions that have legalized iGaming.