New Jersey DGE Reflects on First Year of Online Poker

Posted on January 5th, 2015 by Jon Pineda
New Jersey online poker letter

David Rebuck penned a letter looking back on the last year of online poker in New Jersey and his vision for the future of the industry. (Image: Ben Fogletto/Press of Atlantic City)

New Jersey’s online poker market had a first year that can be described as either successful or disappointing, depending on whom you ask.

Revenues from the sites have been below expectations, and there have already been site closures, but the money that has come in from poker and other online casino games has helped improve the fortunes of Atlantic City’s remaining casinos.

The New Jersey Division of Gaming Enforcement (DGE) looked back on the first full year of online poker in a press release that outlined both the struggles and the triumphs of the Internet gambling market in the state.

“From a regulatory standpoint, our system is working,” wrote DGE Director David Rebuck in the press release. “There have been no major infractions or meltdowns or any systematic regulatory failures that would make anyone doubt the integrity of operations.”

New Jersey Leads American Regulated Online Poker Market

The press release noted that, as of the end of November 2014, there were more than 506,000 accounts opened on New Jersey’s online gambling sites, and that New Jersey accounts for over 90 percent of the regulated Internet gambling revenue in the United States. That includes about 75 percent of online poker revenues, with Nevada accounting or most of the rest.

However, a large part of the release was also devoted to pointing out that the DGE had learned many lessons over the last year, and that there were still plenty of ways in which the state’s online poker landscape could be improved.

Geolocation has been an ongoing issue for New Jersey poker sites. Only players located within the state’s borders are permitted to play on Internet gambling sites, meaning that a location must be determined for anyone who tries to log in. This has caused some problems for players who live in New Jersey, but are close to the border.

“Currently, geolocation has approximately a 98 percent success rate,” Rebuck wrote. “We are always in discussion with the industry for improvement, and there have been great strides in enhancing geolocation protocols.”

New Credit Card Code Could Solve Payment Issues

A more pressing concern may be payment processing, where problems have persisted since the launch of the sites in late 2013. According to the press release, only about 73 percent of Visa transactions and just 44 percent of MasterCard transactions are being approved at online gambling sites.

This has been a major bottleneck that has restricted the size of New Jersey’s online poker market: it’s likely that many recreational players who have a credit card rejected give up rather than trying to find a workaround, meaning that they never actually get to playing for real money.

But that situation could improve in 2015. According to Rebuck, a new credit card code has been created specifically to differentiate legal online gambling transactions from those on unlicensed sites.

“As the banking industry becomes more familiar with legalized Internet gaming and patrons become more educated about the various options for funding their accounts, further improvements are expected in this area,” he wrote.

Looking forward, Rebuck wrote that cooperation with other states in sharing player pools for poker is one of the DGE’s major goals.

“The Division has been in discussions with other jurisdictions, such as Nevada and the United Kingdom, but no compacts have been entered to date,” he wrote. “The Division is open to discussions in this area and always seeks to ensure that any agreements are most beneficial to New Jersey’s Internet gaming industry.”

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