The Delaware online poker industry hit its first anniversary marker last week, and while the market might not be everything it had hoped for when it took the precarious step of becoming the second US state to legalize the game, there are stills signs that Delaware online poker could be a late developer.
Bill HB 333 was signed into law by Delaware Governor Jack Markell just a day after it was passed in the state senate, with its backers touting a revenue projection of $7.75 million per year for state coffers, which in hindsight may have been a little optimistic for a state with a population of just 925,749, as of the census of 2003.
Now, while we’re prepared to admit that many people may have been born in Delaware since 2003, we’re pretty sure that none of them are eligible to play online poker.
So, with a limited population and a ring-fenced market, liquidity was always going to be an issue. To be fair, it was an issue that didn’t go unnoticed, which was why the three licensed racino operators were required, sensibly enough, to share the player pool, with 888.com winning the license to be the sole platform provider.
However, three companies competing for the same players while offering the same games does not a thriving market make.
The Force Awakens
Things began brightly enough, with a weekly cash game average of 22 players, which last December yielded a peak of just over $100,000 in total revenue. Unfortunately, it was downhill from there, with barely enough players, on average these days, to launch a six-handed sit n’ go. Heads-up, anyone?
In fact, cash game revenues have consistently been the lowest of any state or nationally regulated market anywhere in the world, with current monthly turnover hovering around the $40,000 market, following a June nadir of $30,000.
However, there is some hope.
Player liquidity is everything in online poker; it allows sites to host a wider variety of ring games and host multi-table tournaments with bigger prize pools, and that in turn attracts even more players and gives operators a better return on their marketing spend. In February, Delaware signed a pact with Nevada, the first of its kind, to allow pooled online poker liquidity between two states, effectively enabling them to share players legally across borders.
“Today this is an Internet poker agreement between Delaware and Nevada,” proclaimed Markell at the time. “But we know more games and more states mean more players, which means more revenue for participating states.”
Furthermore, it was made clear that the agreement would be open to other states that chose to legalize online poker in the future. It helps, of course, that software provider for Delaware, 888.com, is also the market leader in Nevada, in conjunction with WSOP.com.
According to pokerfuse.com, “If participation rates per million of population reach the levels seen in Nevada, the three racinos would be seeing an average of around 60 players occupying seats at cash game tables with peak hour performance perhaps being three times higher.”
In July, 888.com was got the greenlight to launch a pool-sharing platform in Nevada that would appear to be a blueprint for an eventual multi-state platform. These things take time, but it seems realistic to predict that multi-state pool-sharing will launch sometime in 2015, in which case Delaware online poker could be about to become viable and sustainable. And a lot more fun.
Furthermore, it’s a fascinating experiment into the potential of shared economic opportunities between states and, who knows, perhaps even one day states and nation states. Let the future unfold.