The online poker and casino gambling revenue report for February 2015 has been released by the New Jersey Division of Gaming Enforcement. While it’s clear that internet poker is on an alarming decline compared to last year’s results, it’s also worth noting that, despite the cash game traffic results, the Party Borgata poker network is still the leader in New Jersey.

When WSOP.com and 888Poker teamed up in January by pooling a portion of their player bases across certain cash games and tournaments, it appeared that the newly formed WSOP / 888 network was primed to take over the top spot in New Jersey’s online poker market.

According to current statistics from traffic tracking website PokerScout, WSOP/888 is averaging 200 players at the cash tables over a 7 day period, while the Party Borgata poker network is averaging only 150. That information would lead many to believe that WSOP / 888 would easily overtake the market as the #1 gross revenue generator in the Garden State. But the latest revenue reports indicate otherwise.

The NJ DGE’s revenue report shows that PartyPoker and Borgata Poker (collectively the Party Borgata Network) reaped $1,103,501 from interactive peer-to-peer gaming (i.e. online poker rake and tournaments fees). Caesars Interactive Entertainment, which operates as the license holder for WSOP.com and 888Poker, generated $942,154.

Together, New Jersey’s online poker market produced $2,045,655, with Party Borgata owning 53.94% of the market share. WSOP / 888 made up for the remaining 46.06%. In terms of cash game traffic, though, the numbers look quite different, with WSOP / 888 leading at 57.14% of the market share, and the Party Borgata poker network trailing with 42.86%.

How Party Borgata Poker Network retains #1 Rank

There are only two reasons why Party Borgata would remain on top, despite having lower cash game traffic than its sole network rival in New Jersey. The most likely cause would be a stronger interest from the online poker community in Party Borgata’s tournament schedule.

The network has a larger selection of well-structured tournaments that offer higher guaranteed prize pools than WSOP / 888, and the majority of them are networked across both PartyPoker and Borgata Poker. WSOP and 888 only chose to network a small number of their largest weekly guarantees, which are still collectively lower than those presented by Party Borgata. The highest Sunday GTD at WSOP / 888 generally fluctuates between $25k and $35k, while Party Borgata offers a minimum Sunday $50k GTD, often increased to $100k GTD.

The only other factor that could cause such a seemingly opposing result in New Jersey’s online poker leadership is the value of the players taking part at the cash tables. If PartyPoker and Borgata Poker are drawing more high volume, high stakes players than WSOP / 888, it would reason that the network would collect more from cash game rake than their competitor, despite having the lower traffic numbers.

Revenue Reports Good & Bad News for New Jersey

When comparing February’s online poker revenue to January 2015, the numbers don’t look good at first. Jan 2015 brought in $2,299,426 ($1,283,746 or 55.83% from Party Borgata, $1,015,680 or 44.17% from WSOP / 888). In Feb 2015, the total was down 11% to $2,045,655.

However, if we negate the fact that February had 3 less days than January, calculating the daily average instead, the results look more like this: $74,175 per day in January, $73,059 per day in February. That equates to a mere 1.5% differential, and should be a lot easier for New Jersey regulators to swallow.

Where the largest discrepancy lies is the comparison between February 2015 and February 2014. Last year at this time, the Garden State’s online poker revenue totaled $3,109,203. Overall, the internet poker market has seen a disturbing decline of 28.3% in year-over-year results.

On a positive note, online casino revenue in New Jersey is still running strong, accounting for approximately 4x more than online poker. When both online poker and casino revenues are combined, the DGE reported a total internet gaming win of $10.4 million in February 2015, up 0.9% from $10.3 million in February 2014.

New Jersey’s online gambling market has been active for 15 months now, and after consistent reports of sluggish growth, it seems the industry’s revenue generation is finally staying on a northbound track. For the second month in a row, the interactive gaming win is up, including a substantial boost in online poker revenue.

For the month of January 2015, the New Jersey Division of Gaming Enforcement (DGE) reported a total internet gaming win of $11,567,337. That figure translates to an 8% increase, up from $10,736,118 in December’s report. Of that, $9,267,911 came from the state’s online casino operators, while the other $2,299,426 was derived from peer-to-peer gaming (i.e. online poker operations).

Clearly, casino style gambling is more popular – and more profitable – than online poker games, but this month’s unwritten award for rate of growth goes to the latter. Internet casino win rose 6.38%, while online poker revenue grew 10.45% month over month.

Party Borgata Network leads in Online Poker Revenue

There are currently four online poker operators pilfering their virtual wares in New Jersey – Party Poker NJ, Borgata Poker, 888Poker and WSOP NJ. Party Poker and Borgata Poker are licensed to the Borgata Atlantic City, sharing their player bases on the aptly named Party Borgata Network. 888Poker and WSOP.com, although both licensed under Caesars Interactive and using the same 888-branded software, didn’t not begin sharing their player bases until last month.

With that in mind, only Borgata (Party/Borgata Poker) and Caesars (WSOP/888 Poker) are reporting online poker revenue. In that regard, Party Borgata still maintains a solid lead, representing $1,283,746 (55.83%) of the total peer-to-peer yield for January. WSOP/888 are slowly catching up though with a total of $1,015,680 on the month (up from $949,432 in December 2014).

WSOP NJ / 888Poker lead New Jersey in Cash Game Traffic

In terms of cash game traffic, however, WSOP.com and 888Poker are now cornering the New Jersey market. After partially combining their player bases in mid-January, the Caesar-licensed operators finally edged out the Party Borgata Network as the most popular poker site in New Jersey. According to PokerScout, Party Borgata currently averages 150 cash game players, while WSOP/888 have climbed to 220 players on a 7-day average.

Helping to keep Party Borgata on top in the online poker revenue counts was last month’s second running of the Garden State Super Series (GSSS II). The online poker series ran from January 11^th through the 25^th of the month, drawing in a plethora of players to participate in the 69-event, $1 million guaranteed series.

Remarkably, WSOP.com and 888Poker held no events of that caliber last month, yet still managed to see a small increase in online poker revenue. As such, it will be interesting to see just how well Party Poker NJ and Borgata Poker perform in February compared to WSOP and 888Poker when no major online poker events are on the table.

The biggest guaranteed events for New Jersey online poker players in February are the Sunday Majors. Again, Party Borgata has the better offering with a $100k GTD at 5:00pm every Sunday, but WSOP and 888 are working their way up, having increased the Big Sunday from $35k to $50k for last weekend’s Feb 15^th rendition. Whether the prize will remain the same this coming Sunday is yet to be seen.

Acquisitions and mergers have been the name of the game across the global online gambling industry for the last few years. Last year, Amaya Gaming spent $4.9 billion to take over PokerStars parent company, Rational Group. For $6.4 billion, International Games Technology is about to merge with GTECH SpA. Now it appears that online gambling giant 888 Holdings is entertaining a takeover bid by the UK’s largest bookmaker, William Hill.

The story first broke this morning when The Times reported that William Hill is in “advanced talks” with 888 over a bid to acquire the Gibraltar-based online gambling firm. The report indicated that Will Hill was offering 210 pence per share, amounting to approximately £750 million (USD $1.14 billion).

After the report was published, 888 Holdings released a statement confirming talks with the UK-based bookmaker. “The board of the company confirms that it received an approach regarding a possible offer for the company by William Hill,” read the statement from 888. “There can be no certainty, however, that any firm offer will be made.”

If Will Hill were to take over 888 Holdings, it would give the company a leg in the US online gaming market as well. 888 is already licensed to operate online poker rooms in Nevada, Delaware and New Jersey, with online casino operations in the latter two states.

Immediately following the announcement, shares in 888 Holdings began to skyrocket. The stock price had jumped to 175.00 pence by 3:00pm GMT, closing at 171.50 for an overall jump of +18.28% by end of trading day. In contrast, shares in William Hill fell -3.13%, closing at 377.40.

According to industry analysts, striking a deal between the two live and online gambling companies will be easier said than down. It’s been speculated that the founders of 888, believed to be the Israeli Shaked family, want the bid increased to as high as 300p/share (£1.07 billion; or USD $1.64 billion). That rumor seems to stem from previous takeover talks in 2011 between 888 and Ladbrokes that fell through when the two couldn’t agree on a mutually affable purchase price.

Karl Burns of Panmure Gordon said the 210p/share bid was already a bit on the pricey side, and that he does not expect Will Hill to increase its offer. “I think there is a good chance that the deal may not go through,” said Burns, adding that it could “stretch [William Hill’s] balance sheet to a degree that they may have to raise capital as well.”

While acquisitions have become a lot more commonplace in the live and online gambling industry since 2010, they have clearly escalated more so over the last year. One dominant factor attributing to online gambling buyouts is the increased regulation and taxation of the industry throughout certain regions.

The UK in particular has become an expensive region for online poker, casino and sports betting operators. A new regulatory framework came into force late last year – one that William Hill was prepared to fight when it was first proposed in 2012 – in which tax havens like 888’s home base in Gibraltar are no longer cost-efficient for operators who accept UK players. Those operators must obtain a UK license and pay a 15% POC tax, greatly increasing their bottom line.

Nevada was the first state to launch a regulated internet gaming market in the United States, but the last of three (including Delaware and New Jersey) to issue public online poke revenue reports for the industry. Now, after nearly one year of unrestricted revenue data logs, the Silver State is once again not required to make its online poker earnings public knowledge.

According to the guidelines set forth by the Nevada Gaming Control Board (NGCB) when drafting iGaming regulations, the state is only required to issue reports detailing online poker revenue generation if there are three or more active operators. When Ultimate Poker closed its virtual doors late last year, it left only two operators, thus no obligation to publish the information.

Ultimate Poker made history when the operator launched the very first US regulated online poker site on April 30, 2013. For months, UP remained the only active operator in the state, or the nation for that matter. Then on September 19 of that same year, WSOP.com joined the limited ranks of Nevada’s online poker market. But still, the number of operators was below the required amount to issue public revenue reports.

It wasn’t until South Point became the third operator in Nevada with the launch of Real Gaming in February of 2014 that the state finally released its first online poker revenue report. Due to the nature of those reports, which include 1-month, 3-month and 12-month summaries, the complete yield for 2013 was also revealed, amounting to $8.524 million since the initial launch of UP.

Some had hoped that the NGCB would retract the former reporting rule requirement when the number of operators fell back to two, but obviously that’s not the case. Therefore, until a third operator joins the ranks, concerned market analysts and media outlets will be forced to estimate the monthly yield for December 2014, January 2015 and however many months transpire before publications resume.

Estimated Timeline for launch of 3^rd Online Poker Operator in Nevada

There are three possible candidates to shoulder the responsibility of becoming Nevada’s next 3^rd online poker operator, thus becoming the catalyst for the state’s resumption of online poker revenue reports. Which of those three will hit the market first is hard to say, but it is expected to happen in 2015.

The All American Poker Network (AAPN), on which WSOP.com is currently hosted, is projected to integrate two new sites in the coming year. One is expected to be launched by Treasure Island, and the other 888Poker, proprietor of AAPN. The significance of either of these sites launching would be the resulting shared player pool with WSOP.com, which already leads the Nevada online poker market by leaps and bounds.

The other possibility is HDPoker.com, powered by a new, Nevada-based software company known as Z4Poker. The developer has already been licensed by the NGCB, but has yet to partner with any land-based operator, as is required by regulatory guidelines to offer real money poker games over the internet.

Rumor has it that Z4Poker has a relationship with the Siena Hotel & Casino in Reno, NV, but no partnership deal has been confirmed. In 2014, it was reported that HDPoker anticipated its launch before end of year, with a mobile poker app to be added in Q1 2015, but the website indicates the software remains in Beta Testing mode.

For the last 13 months, the Party Borgata network has led New Jersey’s online poker market in cash game traffic. WSOP NJ was able to creep up behind its rival a few times, but it wasn’t until this last weekend that the Caesars-owned poker room finally took top billing. Not only that; 888’s All American Poker Network (AAPN NJ) skipped ahead into the 2^nd spot.

After maintaining such a strong lead since The Garden State’s iGaming market first went live in November, 2013, the last place Party Borgata expected to be was on bottom. But after New Jersey’s online poker industry was reduced to just three competitors late last year, that’s exactly where the former leader ended up over the weekend.

As for why Party Poker and Party Borgata (collectively Party Borgata) have fallen behind, there are a few factors that can be taken into account. First and foremost, on Monday, January 12, 2015, New Jersey’s WSOP.com and 888Poker initiated a partial merger of their player bases. Secondly, Party Borgata’s most avid members haven’t been especially happy with the software. We’ll discuss more on those issues in a moment, but first…

Current Online Poker Traffic Stats

If we review the Garden State’s online poker cash game traffic over the last nine days, we see a significant change in 7-day averages. We’ll start with Monday, January 12, 2015—the day player pooling first began between WSOP NJ and 888Poker—then proceed to the following Friday, four days later, and finally today’s current stats, another four days down the road.

Note that the following results are derived from the traffic tracking statistics of PokerScout.

WSOP/888 Player Pooling a Huge Success

WSOP NJ and 888Poker NJ are both powered by 888 software, but unlike Party Poker and Borgata Poker (both powered by bwin.party), the two chose not to pool their players from the start. Last week, all low-limit cash game tables were pooled between WSOP and 888. A series of GTD tournaments were also shared, including $130k worth of each sites largest daily and weekly majors.

Negative Feedback for Party Borgata

For the last few months, ever since a major update to the software in September 2014, an MFC Error has been plaguing the online poker network. It mostly affects grinders and players who have multiple tables and/or programs open, particularly when tournament announcements pop up, causing the online poker room to crash. Players generally report other errors within the software upon relaunch, such as the inability to see hole cards.

A fix to the problem was promised on January 5, but no update occurred. Again, a fix was expected during the “week commencing 12th Jan”, as per Party_Rep ‘Colette’ on the TwoPlusTwo forums. But again, no update occurred. Instead, on Friday players were told that previous updates in December were meant to fix the MFC errors—(obviously, that didn’t work)—and that technicians are still working to find “the root cause”.

Players were once more asked to contact customer support with their account information and complete details of any further errors. Members have been justifiably outraged, including many who experienced repeated errors during the site’s GSSS II online poker series. All in all, while traffic is currently on par with last week’s early-week results, once the GSSS II is completed, there could be a lot more New Jersey players making the switch to WSOP NJ and/or 888Poker.