New Jersey Explores Possible Shared Liquidity Deal with United Kingdom
New Jersey’s attempts to forcibly expand the player pool for the state’s casino’s regulated online-poker offerings take a new direction this week. The New Jersey Division of Gaming Enforcement [DGE] confirmed an unofficial and preliminary agreement with the United Kingdom Gambling Commission [UKGC] allowing possible share liquidity of the jurisdictions’ online poker players. As a result, New Jersey has begun canvassing likely market participants for their feedback on this possible future endeavor.
News of the possible deal possibly allowing online poker players from New Jersey and the UK to participate against each other first broke this week over at Global Gaming Business. The GGB feature confirmed some generalities regarding the floated plan via David Rebuck, the director of New Jersey’s DGE.
Player pooling (or liquidity sharing, another common term) is a boon to participating sites, networks and jurisdictions. The practice allows those jurisdictions to offer more games to more players due to a larger combined population. The practice thus creates a positive feedback loop that theoretically increases the overall number of players who participate.
New Jersey already pools players with Delaware, one of the other two US states to have formally regulated online poker. New Jersey also has negotiated such pooled offerings, in an on-and-off manner, with the third such US state, Nevada. However, only one major provider serves both the Nevada and New Jersey markets at the present time — 888, which services the WSOP.com and Caesars offerings in both states. As such, no true competitive market exists to provide urgency for the Nevada deal.
From the New Jersey view, however, other jurisdictions represent likelier short-term opportunities. That’s where the United Kingdom comes in. The UK’s population of 65 million or so dwarfs New Jersey’s nine million (not to mention Delaware’s 940,000). Thus, a partnership with the UK would add the instant vibrancy to the market that the US-based offerings so sorely need. As for the UK, such a deal isn’t a bad idea, either; given the increase in online firewalling throughout Europe, and the slow but steady shift to single-nation online gambling markets, the UKGC also faces major market transition.
Terms of NJ-UK Deal Not Publicized
Terms of the tentative deal between New Jersey and the UKGC remain undisclosed. However, basics almost certainly involve: acceptable and equitable rake rates; a revenue/taxation deal (almost certainly done on a “point of consumption” basis, meaning that taxes are calculated based on the amount of rake generated by a given player, participating from his home jurisdiction; and, of course, that participant networks and service providers are fully licensed to operate in both jurisdictions.
The GGB piece correctly noted that only a small handful of operators currently qualify. The DGE and Rebuck are almost surely canvassing these firms regarding any future shared-liquidity offerings. The short list includes:
- 888.com, which services multiple brands, including WSOP.com and Caesars;
- GVC, new owners of the venerable PartyPoker brand, available in New Jersey as partypokernj.com;
- PokerStars and its corporate parent, Amaya Gaming;
- Gamesys, online partner of Atlantic City’s Tropicana;
- Betfair, which also has a partnership in place with Caesars.
The DGE hopes to have responses in hand from the canvassed firms by the first of August. At that point, the regulator can turn its attention to tougher logistical hurdles needing solutions.
Overall, it’s still early in the process. Even without hiccups, such a deal wouldn’t result in UK and New Jersey poker players mixing it up until 2017 or 2018. Said Rebuck to the GGB, “We’d still have to figure out lots of issues: specific regulations, how the tax rate from each jurisdiction would be applied, player ID and geolocation issues, and other things we probably haven’t even considered yet. But you have to start somewhere.”
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