27 days ago in one of the discussions I started on this forum, I stated the following regarding online poker:
“In the global market there is a huge pool of players that can replace the players dropping off from various websites. In NJ, there is a finite number of players and we already know from surveys that only a small percentage of casino players have an interest in playing online. It is therefore logical to assume that the growth in NJ online poker and casino will not continue at double digits. In fact, I predict very limited month over month growth. I predict no more than 150M in Internet gaming revenue from NJ which is 85% less than Christie predicted and between 50-65% less than the most pessimistic projections. In light of all this I continue to stick to my guns and declare that the NJ online gambling experiment will be disappointing.”
After the NJ online gaming revenue figures for February came out yesterday, I was not surprised to see that the results were exactly in line with my predictions. Player interest is tapering off and we will continue to see a plateau and potential decline in revenue figures.
The only potential way the numbers may increase is a result or promotions, giveaways, or marketing dollars spent that we may not be able to actually see in the gross win figures but would seriously impact the profitability of the online operations.
Validating my aforementioned position, Craig Abrahams, CFO of Caesars Acquisition Company stated and in a conference call this week:
“We expect the impact of marketing costs and expenses related to the ramp up of operations to continue this year as we work to attract new customers, invest in operational infrastructure and create greater awareness in both Nevada and New Jersey.”
One should also note that online gambling revenues at Caesars Interactive were a drop in the bucket compared to their social and non-gambling interactive revenues.
Again I will state for the record that I do not believe that online gambling in NJ will be a success and as a result the excitement will die down and US states will not be that interested in jumping on the bandwagon in the near future.
Unless a Federal Poker bill is passed (slim chance) and there is true interstate cooperation and player liquidity, the online gambling experiment in the US is bound to fail.
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