“Liquidity” is a hot topic these days in the nascent US online poker business. When Nevada launched online poker at the end of April, there were wide predictions that there might be too few players in a Nevada-only market to sustain the games. Not surprisingly, now that other states have begun to launch their own games, Nevada is interested in making arrangements to share players across state lines to bolster their player pool.
Nevada’s decision to limit online gambling to poker only always seemed like a poor choice to me, but it was predictable given the entrenched interests of the land-based casino behemoths of the Las Vegas strip. No matter how much some of the casino moguls claim to be excited about the prospects of online gambling, more than a few of them are scared to death of the implications for their high-overhead billion dollar facilities. Sheldon Adelson’s opposition to online gambling has been front and center again in recent weeks, as the 80 year old chairman of Las Vegas Sands has pledged to put his considerable fortune to work fighting online gambling. (See Forbe’s article.) One has to believe that this kind of powerful opposition had a lot to do with limiting Nevada’s approval to just poker.
But poker isn’t like other online casino games. It takes multiple players to create a poker game. Slots, blackjack, and other traditional casino games don’t need multiple players to participate. With those games available, a player can log on to the new online casinos in Delaware or New Jersey and be guaranteed a game is available at any time of day. There is no liquidity requirement in the traditional sense.
We will see how much difference this makes when we get the first reports of player activity from the newly opened New Jersey market. The first results are to be published in January 2014. In the meantime, we have access to raw player counts in the Nevada poker market, and they look disturbingly low. Recent stats from the two available sites in Nevada show player pools that peak in the 200 to 300 player range on any given day. That’s far too small a market to make this business profitable.
It seems a given that Nevada needs to pool players with other states. The first tentative talks with another state happened last month, when Nevada governor Brian Sandoval spoke with Delaware governor Jack Markell on the topic. (See article in the Delaware News Journal.)
A more interesting question is what will happen as other states show dramatically higher revenue rates because of their inclusion of all casino games. Will Nevada finally be forced to allow those games as well? I predict the answer is yes. The question is, when?