Revenue From Online Poker Overestimated
Prior to the launch of regulated online poker in April of last year, revenue projections had a number of state officials eager to get sites up and running.
As we near the first year anniversary of Internet poker’s debut in Nevada, it now appears that revenue estimates were a bit bloated. Although New Jersey’s online gambling scheme has been operating for only four months, indications are that the Garden State’s projections will turn out to be a bit off the mark as well.
Ultimate Gaming chairman Tom Breitling admitted as much yesterday at the iGaming North America Conference at Planet Hollywood in Las Vegas. Ultimate Gaming is the parent company of Ultimate Poker (UP), who got the ball rolling by launching the nation’s first legal online poker site on April 30, 2013.
WSOP.com joined UP four and a half months later and South Point Casino’s Real Gaming rolled out their offering just one month ago. Some analysts had envisioned $80 million in revenue for the first year of action in the Silver State. Though Breitling said the actual numbers will be revealed within a few months, the final one-year tally will be considerably shy of the early dollar figures tossed around by speculators.
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One of the reasons for the lower revenue totals are the stringent requirements in place that verify the identity and location of players, the Las Vegas Review-Journal reported. There are
too many clicks incorporated into the online registration process that Internet poker players never had to deal with in the past at unregulated sites, Breitling told IGNA conference attendees.
However, the standards put in motion in order to keep out underaged gamblers and those who may be located outside of regulated states are working, as there are no reported instances of minors managing to gamble online. Ultimate Gaming CEO Tobin Prior also stepped up to the podium to tell conference goers that Internet gamblers are
far better protected than those who visit land-based casinos.
UP also operates an online gambling website in New Jersey where Governor Chris Christie and other state officials saw dollar signs upwards of $250 million for state coffers in the first year of online action, according to research. But those studies perhaps failed to take into account the geolocation issues encountered, as well as some credit card companies failing to process the attempted deposits of players.
Let’s keep in mind that regulated online poker and gambling is in its infancy. Once other states climb aboard and interstate online poker partnerships are in place, perhaps those early revenue projections will eventually be met.