New Jersey opens up to the Prospect of an Interstate Compact

Posted on April 16th, 2014 by Robert DellaFave

New Jersey opens up to the Prospect of an Interstate CompactDGE online gaming consultant Mario Galea sees New Jersey forging an interstate compact by the end of 2014.

In an interview with calvinayre.com, former Lotteries and Gaming Authority of Malta Chairman and CEO and current NJ DGE consultant Mario Galea stated that the Garden State will likely enter into an interstate compact with other states that have regulated iGaming operations by year’s end.

This follows only six weeks after Delaware and Nevada first announced their intentions to sign a shared liquidity agreement, combining poker players from the two states into a common pool.

A Brief Synopsis of the Galea Interview

Galea began the interview by reinforcing the DGE’s commitment to its regulatory policies. In accordance with the DGE, New Jersey gambling sites were tasked with implementing a myriad of player protection checks including strong authentication, self-imposed restrictions and protocols related to cashiering methods, all of which serve to distinguish its regulated market from offshore sites. Galea emphasized the pressure the DGE placed upon itself to have everything in place by the go-live date of November 26th, 2013.

The conversation than moved to compacts and liquidity, with Galea explaining that New Jersey’s systems were set up to share data among states. For instance, the system would allow data captured from a player residing in Nevada but playing on a New Jersey site to be shared with Nevada’s iGaming operators.

Mario exhibited a high degree of confidence in New Jersey’s framework, claiming that All the hard work has been done.

When asked about the future of the industry, Galea placed an emphasis on learning, indicating that the nascent regulated market has experienced its share of growing pains since going live last April. However, according to Galea, the regulated gaming market in the United States is evolving at a faster rate than it is in Europe – which to date has never managed to do cross-border.

The interview concludes with Galea proclaiming that New Jersey could very well see a liquidity agreement take form by the end of this year.

Should New Jersey forge an interstate compact?

Up until recently, it appeared that New Jersey held little interest in aligning with Nevada or Delaware, and for good reason. In terms of population, and subsequently player base, both states are significantly smaller than the Garden State. And anyone who’s played online poker knows that volume is king.

To further illustrate this point, the average number of players participating in cash-games on a Nevada-based online site is currently hovering around 160. In Delaware, it’s a mere 15. Compare this to New Jersey, which in late-January touted upwards of over 600 concurrent cash-game players.

But lately, New Jersey’s regulated market has fallen on difficult times. Revenue figures show that while New Jersey’s online casino market is growing at a healthy rate, its poker industry is actually losing momentum. In fact, traffic across New Jersey sites is down over one-third from its January peak.

In addition, the compact set up between Nevada and Delaware was designed so that other states could easily opt in. And considering that 888 already has an operating interest in all three states, converting sites like WSOP.com from a ring-fenced entity to one that shares liquidity across states seems both feasible and preferable.

An agreement among the three states could also compel other states to join into the mix, especially smaller ones that would rely on interstate compacts to remain viable.

Will New Jersey enter an interstate agreement by year’s end? That’s anyone’s guess, but the prospects look more favorable than they did just a few weeks ago.

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