Since 2013 the three states that passed online gaming and/or poker regulations – Nevada, New Jersey, and Delaware – have gone their own ways in trying to be successful in the online gaming industry. Now, the trio of states have made the historic decision to compact between each other.
In a press release, Governor Chris Christie of New Jersey announced the important decision. “New Jersey has been a pioneer in the development of authorized, regulated online gaming, which has been a budding success since its launch in late 2013,” Governor Christie said. “Pooling players with Nevada and Delaware will enhance annual revenue growth, attract new consumers, and create opportunities for players and Internet gaming operators. This agreement marks the beginning of a new and exciting chapter for online gaming, and we look forward to working with our partners in Nevada and Delaware in this endeavor.”
Although there isn’t a firm date set for the beginning of the deal between the three states, it will eventually allow their citizens to compete amongst each other in cash game or tournament and tournament poker. There is also a provision for sharing the pools between the states for progressive slot games, something that New Jersey and Delaware will be able to do as states that regulate an online casino industry (Nevada is poker only). Although the agreement is a hallmark of better days for the industry in the three states, there are still roadblocks to its actual implementation.
First, there is a clause in the New Jersey regulations that stipulate that all gaming must originate from Atlantic City, something that nearly stopped the Garden State’s online gaming industry from even getting off the ground back in 2013 during debate. The director of the New Jersey Division of Gaming Enforcement, David Rebuck, may be confident that “New Jersey stands prepared to approve a game offering for all three states as soon as an operator submits such a product for testing,” that doesn’t mean that Nevada and Delaware will be willing to give up this power.
If the servers creating the game do not originate in New Jersey, then the New Jersey regulations make it an illegal game. The Nevada regulations do not have any type of restriction as to where the game takes place (they only state that it must be licensed by the Nevada Gaming Control Board) and it is unknown what Delaware’s regulations say on the issue. The best way to get around this would be for Nevada and Delaware to allow for the games to originate from Atlantic City, but that’s a slippery slope into #2 on our list.
Second, there is the potential for New Jersey to attempt to dominate the proceedings. With the largest pool of players of the three states, it is possible that the state’s regulators may want to get everything their way. If the states have agreed to a true compact, however, this isn’t much of a worry as these issues would have been previously worked out.
Third, there is the question of how many rooms would be able to operate in the system if all three states must license them. Currently the only site licensed by all three is 888-software driven WSOP.com, who is the dominant power in Nevada and Delaware (these two states had compacted previously) and who also has operations in New Jersey (with Caesars and Harrah’s in partnership with 888). There are other sites in New Jersey – including partypoker and Betfair – that would like the same opportunity to compact with the other states, but they currently don’t have a dance partner – a casino in Nevada or Delaware (Delaware is driven by 888 software) – to take advantage of the compact.
Finally, there is the 800-lb. gorilla in the room – PokerStars. While they are licensed and operating in New Jersey with Resorts Atlantic City, they also aren’t licensed in Nevada or Delaware. The battle for a license with these states would be huge between those outlets who “played by the rules” (party, 888, etc.) and left the U. S. after “Black Friday” and PokerStars, who continued to serve and became the biggest online poker operation in the world.
There are further issues with the number of players – it still isn’t enough (between the three states there are roughly an average of 250 players during a seven-day period) – that can only be corrected with more states joining the compact. But it is outstanding that the trio of states that have been in operation for four years now have come together as one to drive more states into the game and the building of a larger market for online gaming and poker.
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