Nevada Approves Online Poker Network Shared by Competitors
According to a report by Howard Stutz of the Las Vegas Review-Journal, competing online poker operators in Nevada may soon team up on a single, unified poker network.
A proposal was made Wednesday to the Nevada Gaming Control Board (GCB) by representatives of 888 Holdings in which 888 would develop the network, which would be formed by WSOP.com, a Caesars Interactive Entertainment site, as well as an upcoming poker offering from Treasure Island. 888 may develop another room in conjunction with Treasure Island and connect it to the network, as well. Future poker rooms would also be allowed to join. The plan was tentatively approved by the GCB.
The Treasure Island poker room was originally announced in March 2013, when 888 Holdings partnered with Avenue Capital Group to create the All American Poker Network (AAPN). Treasure Island was granted its online poker room shortly thereafter and was to be the first room on the network, although that obviously has not happened yet. It was not stated whether or not the multi-operator network would use the AAPN name. AAPN currently operates in New Jersey with 888poker.com as the lone poker room on the network. 
The idea behind the network proposal would be to put more player traffic in one spot, thus making creating more games and making the rooms more attractive to potential players. Whereas many businesses can get by with a small customer base, online poker rooms cannot. Low traffic has a compounding effect. Poker rooms with few players have empty tables. Those empty tables turn away prospective players, which keeps traffic low. At the same time, sparse games cause the already few players to leave, reducing the poker room’s traffic further.
It is very hard for small poker rooms to grow, hence the need for a move like this. Said 888 attorney Yehoshua Gurtler, “For Nevada, a network provides more gaming taxes due to greater product attractiveness and player participation.”
888’s network platform would assign revenue from each player according to the poker room at which they originally registered.
Nevada already knew there was a need for operators to work together. In February, the governors of Nevada and Delaware signed the Multi-State Internet Gaming Agreement, which will allow players from either state to play on poker rooms based in the other. As it stands now, players in the three states in which online poker is regulated – Nevada, Delaware, and New Jersey – can only play on sites based in their state and can only play against players located within state borders. For Nevada and Delaware, in particular, this severely limits the potential player traffic on their sites. Nevada’s population is estimated to be 2.8 million, making it the 35th largest state in the U.S. Delaware has less than a million residents, ranking it at just 45th.
There are currently three online poker sites operating in Nevada: WSOP.com, Ultimate Poker, and Real Gaming (associated with South Point). According to PokerScout.com, WSOP.com is currently the largest of all U.S. regulated poker rooms, with a seven-day average of 160 cash game players. This is has likely been boosted by the many poker players in Las Vegas for the World Series of Poker, so it would not be at all unexpected for it to slip back behind New Jersey’s Party Borgata Network, which has an average of 150 players. Ultimate Poker is way behind with a seven-day average of just 55 players, while Real Gaming hasn’t really registered on PokerScout’s charts yet.
Combining WSOP.com’s traffic with two new 888-operated poker rooms would not probably do all that much initially, but even a 100-player boost could certainly help. That would put the combined network close to the top 20 in PokerScout’s rankings (for comparison, WSOP.com is 35th right now). More importantly, however, it would hopefully make the rooms on the network look more attractive to players and create further growth.
Delaware’s regulated internet gaming industry is already run similar to the proposed Nevada multi-operator network. There are three racinos in the state that are licensed to offer online gaming; players who sign up at any of them end up playing on a poker network with players from the other two sites. As mentioned, Delaware’s population is so small that this was really a necessity. Online poker rooms would have no ability to survive if they had to go it alone. Even with a statewide network, Delaware’s poker traffic is but a blip on the national radar.
Neither Delaware, Nevada, nor New Jersey have had the success with online gaming that was anticipated pre-regulation. In the Stutz piece, he quotes Eilers Research gaming analyst Adam Krejcik, who said in a report last month, “Many will argue that we are only in the early innings of regulated online poker in the U.S. and problems surrounding payment processing and geolocation have negatively impacted results.”
Krejcik probably approves of the 888 proposal, as he also said, “Looking forward, we believe states considering adopting real-money online poker should have cautious expectations and believe it’s important to not lose sight of the bigger issue, which is to grow overall gaming revenues.”
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