On January 14th, the New Jersey Division of Gaming Enforcement will post the initial revenue numbers for New Jersey’s regulated online poker sites and casinos.
These numbers will cover revenue for November and December. I suspect they’ll be rather raw numbers that point only to gross gaming yield (poker rake plus casino hold).
There’s been a wide array of financial projections for online gambling in New Jersey, with gaps in the hundreds of millions between the highest and lowest.
So what should we expect from the first round of numbers?
I’d put the line at $10.5mm for total GGY at the dozen or so online sites licensed by the DGE.
Some relevant factors for forecasting NJ online gambling revenue
A few critical points that informed this estimate:
- The revenue period runs from the soft launch (November 21st) through the end of December – so just a bit shy of six weeks.
- But the soft launch – where participation was limited by some sites – accounts for about five days of that period.
- It’s difficult to quantify the impact geolocation and deposit issues had on participation, but it was likely material.
- New Jersey’s online gambling sites pumped something between $1-$2mm of player funds into the ecosystem via no deposit bonuses, overlays, deposit bonuses and so on.
- Marketing efforts were somewhat uneven in December; some sites, like PartyPoker NJ, were very aggressive. Others seemed to be holding back until the dust settled from the launch.
- Online poker traffic didn’t really hit its stride until the second week of December. And the latest burst of poker activity came after the close of December.
Available forecasts range by several million
There aren’t really any specific forecasts for the first weeks of online gambling in New Jersey as it actually occurred. Instead, the majority of forecasts were developed prior to launch, meaning they don’t necessarily take into account many of the points raised above.
And many just include a flat estimate for Year 1 of online gambling, without breaking out the ramp-up that many expect to take place over the course of the first year as consumers get more and more comfortable with the concept.
With that said, here’s a sampling of forecasts for NJ online gambling revenue:
- GamblingData.com projects that NJ will generate about $39mm in Q1 of the first year, or about $13mm per month.
- Data from Academicon (combined with assumptions from GamblingData) suggests a per-month take in Year 1 of $6.5 to $8.1mm.
- Eilers Research estimates NJ online gambling will bring in about $19mm a month when mature, which they project as 2-3 years out from now.
Obviously I’m coming in closer to the high end of the consensus. But I believe the amount of promotional money that casinos and poker sites have contributed to the pool will provide a boost, even if it’s somewhat illusory.
As for what the actual number says about the health and momentum of New Jersey’s regulated online gambling industry when it’s released on January 14th, I’d argue that anything over $10mm is a win, anything over $15mm is a massive win and anything below $6mm is a huge disappointment.