ESPN has just published a great article by Tim Fiorvanti about the launch of Amaya’s (AYA) PokerStars in New Jersey:
“It’s been a long road for PokerStars since April 15, 2011, but after clearing numerous regulatory hurdles and enduring an ownership change, they dealt their first official legal hand of online poker in the United States on Monday in New Jersey.
“It’s clearly a milestone for the company and for our history, with Amaya being free and clear to operate in the U.S.,” said Eric Hollreiser, Vice President of Corporate Comms., Amaya Inc. and PokerStars. “Psychologically, it’s important. It’s important from a business perspective too, and although it’s a small amount of a business, it is a beachhead into what will be a much larger licensed U.S. market in the future. Just how large and how soon remains to be seen.”
After capping capacity at 500 players during the soft launch period, as they got the final checks and clearances from the New Jersey Department of Gaming Enforcement, the player pool ballooned to more than twice that number Monday. At its peak, there were around 1,200 concurrently logged-in players, according to PocketFives’ Lance Bradley.
PokerStars quickly surged into the lead, as far as cash game traffic in New Jersey was concerned. According to PokerScout, what was a 60-40 split between WSOP.com/888poker and partypoker/Borgata on March 14 became a 40 percent share for PokerStars NJ on March 21, with 36 percent playing on WSOP/888 and 24 percent on partypoker/Borgata. The total market size grew by 21 percent over that span.
“I think what we see in these early indications is that PokerStars still has strong brand affinity and delivers the goods,” Hollreiser said. “I think the early reviews that we’re seeing on the site are reminding people why they have always loved PokerStars. We’ve continued to evolve, and the experience has only gotten better.”
PokerStars isn’t going into this alone, however. They have a partner in Resorts that supported them throughout the regulatory process that dragged on for well over two years beyond the initial launch of online gaming in New Jersey.
“For Resorts, this is a big deal for us,” said Mark Giannantonio, president and CEO at Resorts Casino Hotel. “Clearly, we would have liked to see this happen in a timelier manner, but at the end of the day, the Division of Gaming Enforcement was doing its due diligence and doing a very thorough analysis. Clearly now, at least for PokerStars, it’s a catalyst that could allow them, potentially, into [more] U.S. markets.”
“It certainly took a long time, and we were eager to get here, so it would never have been fast enough [in our eyes],” Hollreiser said. “That said, with it behind us, we can say that it was an incredibly thorough, exhaustive examination. The DGE has set the gold standard for gaming regulations in the world, so I’d rather that they took their time, did a thorough investigation that they felt was necessary and hope that people in the future will read that report and feel confident and certain that the company is a very strong, ethical and deserving licensee.”
Even without an established real money platform for close to five years, PokerStars retained (or added) a number of U.S.-based pros to their Team Pro roster. Chris Moneymaker, Jason Mercier, Vanessa Selbst, Barry Greenstein, Victor Ramdin and Team Online pros George Lind and Randy Lew have all been part of the team since before Black Friday. Jason Somerville parlayed his popular streaming content on Twitch into his own spot as a Team Online pro, but until Monday he had to travel outside U.S. borders to stream his PokerStars action. Jennifer Shahade also falls under the Team PokerStars banner as the brand’s “Mind Sport Ambassador.”
Moneymaker, the 2003 World Series of Poker main event champion, remains one of PokerStars’ most visible and recognizable presences. He took the opportunity to hop on the PokerStars client Monday, alongside a number of his fellow Team Pros. His first opportunity to play on the site he represents in his native country meant quite a bit to him.
“To be honest, it was really surreal,” Moneymaker said. “I remember when Black Friday happened. I thought it would be a week-long thing or something that was a momentary blip. Pretty quickly, you realize that this is going to be a long-term problem. It’s been a long journey to get from that point to where we are today — taking trips out to California, going to Washington D.C., doing lobbying and things like that. To see a lot of those efforts show fruit, where we can actually play in the U.S. now, is an amazing thing.”
As excited as he was to fire up the PokerStars client, Moneymaker really enjoyed himself once the action got going. “They had mixed games going. We had 141 people in the big tournament. We booked 608 people on at 1:00 in the morning,” he said. “Overall, I think it was a huge success, and it felt really good to be able to not have to leave the country to actually get on and play on PokerStars. There are so many positives to it, and I’m excited about the future. It’s a smaller community, obviously, but it seemed more like a home game — everyone was just talking, and everybody was excited to be back. Everybody kept requesting higher limits too. Everybody wanted to play bigger. There’s tons of action, and everybody that I played with last night had really positive feedback. That’s a really cool thing when you’re playing online.”
The response was overwhelmingly positive in the early going. It helped that, as opposed to previous launches in New Jersey and Nevada, there were no major complaints or issues as far as players in the state of New Jersey having geolocation issues while attempting to log in.
This level of excitement and interaction is good news for Resorts, who is intent on continuing to rebuild a brand that was on the brink in 2010, when it was purchased by Bailey. PokerStars joins brands such as Mohegan Sun, Landshark and Margaritaville as big-name partners that have helped Resorts reclaim some of the standing it previously held as the first hotel-casino in Atlantic City.
“There’s just a buzz that PokerStars has produced since being approved back in September, [especially since] the soft launch over the last six or seven days. Our customers are talking about it a lot, they’re coming down to the property. With yesterday’s launch event, we had a big buzz on the casino floor with Chris there and the other players. It’s a huge catalyst for us as a company just to be aligned with PokerStars. There’s no question: We see a great upside with potential live events at the property.”
The live event presence that PokerStars has with the EPT, LAPT and numerous regional tours around the world (including a previous U.S. iteration, the NAPT) has to be one of the most appealing elements of this partnership for Resorts. Although there are clearly plans in place, both sides have been mum in that regard, as far as specifics.
“Live events have always been an important part of our strategy, and many online players aspire to become great live players,” Hollreiser said. “It will definitely be a part of our future, remaining so globally, and we’ll start folding New Jersey into that as much as makes sense. But certainly locally, we plan on doing events with Resorts and finding ways to bring players into live environments and bring traffic into Resorts from our online site. It’s a little too soon to divulge [more details], but rest assured, you’ll be seeing things as early as this year.”
Legal online poker officially launched in the United States in April 2013, with the first hands dealt on the now-defunct Ultimate Poker in Nevada. WSOP.com followed in September of that year in Nevada, Delaware launched online poker in late October of that year, and New Jersey followed suit in November 2013.
Any further progress with the state-by-state legalization of online gambling, and online poker specifically, has been slow and frustrating for an industry that has been largely hamstrung since Black Friday. Four states have made some level of progress and stand out as having the most potential for implementation in the near future: Pennsylvania, Massachusetts, New York and California, per Online Poker Report.
PokerStars has seen the potential of legalization in California, a state that dwarfs the current combined pool of in-state residents by more than three times, with an estimated population of over 39 million, according to the U.S. Census Bureau’s 2015 estimates. They put the same kind of full-court press there that they’re putting on display in New Jersey this week, trying to drum up support at the grassroots level as they try to break through a complicated legal landscape between card rooms, racetracks and Native American tribes.
“We had a very successful lobbying campaign in California last year, where we started engaging our customer base there, with Chris and several other players playing a big part,” Hollreiser said. “We were holding events and holding tournaments in card rooms up and down the state and seeing players come out in droves, willing to sign up for our consumer coalition there. The Poker Players Alliance has also done a great job of lobbying at the state and national level.”
A multi-pronged approach with operators, players and government interests alike pushing for more widespread legalization is likely to continue as many fight to play the game they love. It might come down to whether an alliance between forces that have been ultra-competitive for a limited player base can come together.
“Obviously, the operators have the largest self-interest, so I think we will be continuing to lead the charge,” Hollreiser said. “Personally, I would like to see greater cooperation among the operators and a more unified front. It’s difficult in any industry, but it has been particularly challenging for our industry. I think having players coming together has always been helpful.”
Expansion will be vital over the short and long term in the world of online poker. If the player pool is not refreshed, either the players at the top of the food chain or the operators — or possibly a combination of the two — will suck the ecosystem dry.
“We know about the importance of liquidity in poker, and success breeds success,” Hollreiser said. “The more states that come on board, the more promotion and marketing and excitement around poker occurs [and] has a network effect of bringing more players in. Bringing that liquidity allows us to offer more games, more game types and more stakes levels, which is far more attractive to players because they can get seated quickly and get to play the game they want to.”
There are a lot of parallels to be found with daily fantasy sports in this regard; that is another industry going through a multitude of legal fights throughout the United States. Although DFS has found a wider base of acceptance and continues in other regions in a similar fashion to the way the poker world functioned in the months and years prior to Black Friday, there are certainly lessons to be learned — both positive and negative — from how the biggest entities operate.
“I think the more voices that come out in favor of this, the more advancement we’ll see, similar to what we’re seeing with DFS right now,” Hollreiser said. “I think a lot of that has been driven by the huge number of people that are playing DFS right now, as well as the input of the leagues and the media companies who are reaping the benefits of this. If we can find the interested stakeholders to all come together in a more unified way, perhaps we’ll see more advancement, like in DFS.”
On a smaller scale, New Jersey is hoping PokerStars’ entrance into the state’s online gaming industry will provide a much-needed shot in the arm. With several surrounding states building casinos and considering online presences of their own, this will be a vital time in determining whether Atlantic City and the state as a whole can reestablish itself as a pillar in the gambling world.
If it succeeds in the way many are hoping, PokerStars could prove that a rising tide can lift all boats.
“The market for poker has been anemic,” Giannantonio said. “But with an [industry] leader entering the New Jersey market, it’s going to be great for, certainly, Resorts but also great for New Jersey, and hopefully it delivers some momentum for expansion throughout the country.””