Opinion: Offshore Poker Sites Are A Red Herring In New Jersey’s Slow Takeup

New Jersey’s online poker launch has not been a success. While most commentators are putting a brave face on things, focusing on small positives – the big picture is bleak. Take up is massively off of projections, and revenue is no longer growing. This news is important not just for New Jersey residents, the continual expansion of State regulated poker depends on the success of the pioneering States.

So, the search for something to blame is in full effect.

First it was the banks and their failure to allow cards to be used.

Now, with most of those issues fully resolved, blame is being pointed at the offshore poker industry and the affiliates who promote those sites. It has gotten to the point where large affiliates are being sent cease and desist letters for promoting offshore sites.

I took a look at some of the numbers, and believe that these site’s impact is marginal at best. I’ll argue below that the government and site operators in New Jersey and elsewhere need to stop looking for external sources to blame – and double-down on their marketing efforts.

The Numbers

My starting point is the average number of players who play at offshore poker sites. I have taken the latest 7 day averages for cash game players from pokerscout.com

Here is what they look like

Bodog / Bovada: 1450

Merge: 500

Winning Network: 350

Chico: 260

Equity: 170

There are some others, so I’ll be generous and round this number up to 3000. I understand that this is just cash (ring game) players and not Tournament or Sit N Go fans. We can account for the fact that there are different players playing different lengths of session later in the piece. I’m also not taking into account the International players on these networks.

I’m going to be generous with the numbers here, because the fundamentals of the argument don’t change all that much.

An Assumption

For now, how about we take 2 numbers, and say to get an average of 3000 cash game players at offshore sites you need 20 times that many accounts… yep, 60,000 accounts. Maybe this is 30x, which would be 90,000 active accounts?

How many of these players potentially come from New Jersey?

Here is where the figures get interesting. New Jersey has 8.85 million (9m is close enough). The US as a whole has 318 million. It is safe to say that approximately 3% of Americans were located in NJ.

3%

Well, if the number of players at offshore poker sites was proportional to the distribution around the US. Then how many NJ residents would be actively playing at offshore accounts?

Based on 60,000 that would be 1800. 90,000 would make it 2700.

Yeah, we could take tournament fans into account and bump this number way up high to 7000, or even 10,000.

Here is my thinking.

10,000 people out of a population of 8.85 million regularly play poker at offshore sites.

Is this really the reason that intra-State poker is not taking off?

I think it is one reason.

Though probably not the most significant one.

I also think that those players will come across to the regulated sites once there are enough games and big enough tournaments running.

At the same time, so many people ‘blaming’ offshore sites when there are so many people out there who are potential players that are not playing on them. Well, it all feels a little too much like needing a useful scapegoat…

Throughout this post I have been generous with the numbers. Not including overseas players at the offshore sites, rounding up all the way, and so on. I’m going to end with one more thought. You could easily double, triple or even quadruple the numbers I have used… and the argument would be exactly the same.

GL at the tables

Mark

PS: Just for the record, I'm positive on regulation and hope this is a huge success. My argument here is only that the finger of blame is being pointed in the wrong direction.