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Five years, five biggest lessons learned in New Yersey’s online gambling
Reading Time: 5 minutes
On February 26, 2013, New Jersey celebrated a historic milestone. It was on that day that then Governor Chris Christie signed Assembly Bill 2578, which legalized online poker and casino games in the state, into law.
Exactly nine months later the first regulated sites went live. And while the industry was not without its growing pains, it has proven an overwhelming success, generating over $130 million for state coffers and contributing to the revitalization of downtrodden Atlantic City.
In this retrospect we take a look at some of the biggest lessons learned during the industry’s first five years, paying particular attention to unexpected trends that threw analysts for a loop. New states considering iGaming legislation can look to these examples in order to glean a better perspective as to how to max out their own industries.
1 — Outrageous projections are damaging
Exaggerated revenue projections are nothing new, especially in regard to nascent industries. But when those predictions are so outrageous that the new industry has absolutely no chance of meeting expectations, it can have a long-term detrimental impact on public perception.
This is exactly what happened to the NJ online gambling industry.
Conservative estimates projected $200 – $300 million in first-year revenue; lofty but attainable under the right circumstances. They weren’t the problem. It was Morgan Stanley‘s estimate of $1 billion, and Chris Christie’s own projection of $1.2 billion which made headlines, ultimately putting the industry in an unenviable spot.
How Christie derived this figure is anyone’s guess, but we suspect it has something to do with bolstering his political clout. Unfortunately, when the industry posted first-year revenue of $122.9 million — a very respectable number — it was widely viewed as a colossal failure. As a result, other state legislators shied away from online gambling, and it wouldn’t be until 2017 that another state (Pennsylvania) legalized the activity.
Thankfully, industry operators weren’t deterred by the negativity. Last year, NJ online gambling generated $245.6 million, and in January 2018, it set a new high-water mark for monthly revenue.
States on the fence about iGaming legislation are advised to look at this growth trajectory, and not be fazed that NJ online gambling sites didn’t live up to the bombastic predictions set forth by Christie in 2013.
2 — Online casino is the new online poker
When Black Friday forced PokerStars, Full Tilt, and other major online poker brands out of the US in 2011, players were rightly devastated. At the time, poker was something of a national pastime in the states, and its sudden removal cost many residents their livelihood, and a significant number their jobs.
By 2013 online poker was well past its popularity peak, but that didn’t prevent players from becoming enthused about its return to New Jersey. Unfortunately, these players were met with a hard reality early on, that this new online poker market was merely a shadow of its former self.
Most of the problem had to do with the capped liquidity of the NJ market. Prior to Black Friday, sites had a population reach in the hundreds of millions. Now their reach was just under 9 million. Factor in the industry’s various early struggles (payment processing limitations, geolocation failures) and traffic and revenue quickly floundered.
During those early days, operators poured countless marketing dollars into poker (remember 888’s 80% rakeback deal?), believing it to be the best use of their funds. They were wrong, and in being wrong they hindered the growth of online casino — a vertical that did not depend on high liquidity for success.
Since, they’ve learned their lesson and online casino sites have thrived. In 2017, online casino accounted for a staggering 90.1% of industry revenue.
Granted, we do think online poker will capture more market share in 2018, but that’s only because NJ has taken steps to rid itself of its liquidity problem, by forging a player pooling compact with Nevada and Delaware.
3 — What’s in a brand? Apparently, not everything
When NJ online gambling launched in November 2013, analysts believed that Caesars and Borgata sites would dominate the landscape. They did, for a time.
But it quickly became clear that over the long-haul, strong branding was only one piece of the puzzle. Nowhere was this more evident than on Golden Nugget licensed sites. A relatively small casino brand in New Jersey, at least compared to Borgata and Caesars, Golden Nugget purposely held back on its marketing spend for about a year, only to open the floodgates once other sites pulled back on their initial promotional blitz. It was also around this time that it picked up Betfair, a highly regarded international brand, under its license.
This one-two punch worked, and the positive results were amplified by the operator’s aggressiveness, resulting in a rapidly expanding game library, new formats, better software, and top-flight payment processing. Since, Golden Nugget has never looked back, and in January 2018 it became the first operator to generate over $7 million in a calendar month. For perspective, no other operator has ever pulled in $5 million.
Other smaller brands have also done well. Resorts, Atlantic City’s smallest casino brand and a latecomer to the online market, defied all odds and now accounts for significant market share. Why? Probably because its casino software and game libraries are second to none.
And for what it’s worth smaller brands are apparently making an impression on AC’s big hitters. Recently we’ve seen sites under the Caesars license make a host of improvements, and Borgata has been upping its online casino game considerably of late, via new games and creative promotions.
The lesson here is that smaller casino brands in other states have plenty of reason to lobby for iGaming, perhaps even more than bigger names, because the online space is a more level playing field.
4 — AC and NJ online gambling, perfect together
One of the chief concerns revolving around NJ online gambling was that the industry might cannibalize Atlantic City revenue. Not only were these worries quickly put to bed, but it was revealed that online gambling had a complementary impact on brick & mortar casinos.
As early as February 2014, three months after industry launch, it was shown that online and land-based players come from very different stock, with little overlap. Going further, a portion of these online players were incentivized to visit Atlantic City for the first time.
We’re not saying online gambling is the sole reason Atlantic City land-based gaming revenue has stabilized, but it’s certainly a factor.
Not only that, but iGaming has proven to bolster Atlantic City revenue under select circumstances. To wit, it was recently reported that AC revenue was down a sharp 10% in January, primarily due to a string of inclement weather early in the month. However, for that very same reason, online gambling soared to a new revenue record.
Without online to cushion the blow, AC revenue would have fallen by a much larger margin, and that’s worth something.
Unfortunately there are still some holdouts that earnestly believe online will cannibalize their business. Hopefully these misguided fears will be dispelled once proof mounts in other states that this is not the case.
5 — Live Dealer proves a critical addition
The impact of Live Dealer games, launched on Golden Nugget Casino in 2016 and Betfair Casino in 2017, is not to be overlooked.
Not only do Live Dealer games take in some healthy wagers, but they’re proving a gateway to online gambling for those more comfortable with brick & mortar casino settings. In turn, some of these new players eventually warm up to electronic games.
We don’t have exact revenue figures for Live Dealer games, but based on the vertical’s growth — both in the number of tables running and hours of operation — we suspect it’s growing quickly.
Expect Golden Nugget to roll out several more Live Dealer games this year, including the Bet Behindfeature for blackjack, which could be a game changer. It’s also plausible that Golden Nugget will lease its studio space to more operators (Betfair currently utilizes it), as the cost of running an independent studio might prove too high for most.
Source: njonlinegambling.com
Source: European Gaming Media and Events
A partnership between game developer Turbo Games and iGaming solution provider and aggregator Slotegrator began in November 2022 via the APIgrator game integration solution. Since then, the collaboration has been developing successfully — and now it’s time to analyze what made it successful.
Turbo Games has noticed how the new technologies spreading throughout the industry can work for the good of brand transparency and player loyalty: “We can already see how blockchain technology has made it possible to make betting checks more accessible to players. All you need is a blockchain-hash and a decoder service. We think we will continue to move in this direction. Many traditional online casinos do not offer the possibility to check the bet. Sooner or later we all have to come to this. Perhaps the development of artificial intelligence will help here, because we are already seeing its involvement in all spheres of human life.”
Turbo Games specializes in provably fair games. Provable fairness is a concept where players can verify their wins or losses using blockchain technology — the outcome of the game is dictated by a smart contract and is absolutely random, barring the possibility of any human involvement. Using cryptographic hashing algorithms, the gambling site and the player’s device both generate seeds (random strings of numbers). Players receive a key that allows them to check the results; if the results are the same as the game round they witnessed, it proves that there was no foul play.
According to statistics from Turbo Games, the audience for provably fair games is mostly between 18 and 25 years old. However, there are also players aged 35-40 who prefer traditional games but would like to try something new, and have turned their attention to provably fair games.
There are good odds that the technology of provably fair games will become more popular, if not even commonplace, because it gives players a feeling of transparency and proves that the business is trustworthy without the need to search through dozens of reviews. Whereas many innovations in iGaming simply add entertainment, provable fairness addresses security concerns and reassures players that they’re not being exploited, which is invaluable.
Provably fair games are beneficial for both players and online casinos. Vadim Potapenko, Head of Sales at Turbo Games, comments: “It often happens that the users are not satisfied with the result, because gambling is not only about big wins, but also possible losses. By allowing them to check the fairness of a bet, we make life easier for platforms and players. Of course, this allows us to communicate with partners and users that we work honestly and that’s why they should trust our games.”
Ayvar Gabidullin, Business Development Manager at Slotegrator, adds that “this type of game is now becoming more and more popular and has great potential for both players and game providers in the future. On the part of the player, the advantage is that the player can always be sure that his game is fair and he can independently check any of his bets. And for the game provider, this also simplifies the process of implementing casino games, since now it will not be necessary to obtain the appropriate certificates from independent laboratories before launching new games, they can immediately enter the market with these games and where anyone can check the result and make sure that that there is no cheating with players. Many game providers are starting to look towards this type of game. And as far as I see, many operators are starting to think about adding these games.”
What do players in 2023 need? The iGaming industry is all about reputation and trust. Players have a huge number of platforms to choose from, making them pickier and pickier. There’s an abundance of forums where players leave reviews, so if players view a brand as untrustworthy, there are plenty of places they can share their opinion. Provable fairness not only stops that from happening, it provides evidence to the contrary, giving players something else to talk about.
Slotegrator also recommends investing time and effort into localization and creating an effective and detailed marketing strategy — before trying provably fair technology players need to get to the platform, and there is no acquisition without marketing.
ABOUT SLOTEGRATOR
Since 2012, Slotegrator has been one of the iGaming industry’s leading software and business solution providers for online casino and sportsbook operators.
The company’s main focus is software development and support for online casino platforms, as well as the integration of game content and payment systems.
The company works with licensed game developers and offers a vast portfolio of casino content: slots, live casino games, poker, virtual sports, table games, lotteries, casual games, and data feeds for betting.
Slotegrator also provides consulting services in gambling license acquisition and business incorporation.
More information: https://slotegrator.pro/
ABOUT TURBO GAMES
Turbo Games — a provably fair games provider that belongs to Turbo Stars company — has an ambitious goal to establish widespread recognition throughout the iGaming world. Even though it is young, the company consists of professionals who have been working on the brand for over five years and are even planning to introduce a new brand for a wider audience soon.
Turbo Games also works in Europe, India, and South Africa, where the company sees the most potential and expects the same “hype” as in Brazil.
The portfolio of Turbo Games consists of 21 titles, including well-known games like Mines, Crash X, DoubleRoll, Hi-Lo, and Plinko. The studio releases a game every month. However, not all games are developed from scratch. Wicket Blast and Spin Strike, the last two releases, are based on cricket and the Indian Premier League. Crash X remains the most popular fast game in the Turbo Games portfolio, and the studio reports that crash games enjoy stable levels of popularity. Overall, the main focus of the brand is provably fair games.
More information: https://turbogames.io/
Looking to take your career to the next level in the games industry? Then, Nordic Game Talents is the place to be! Games Factory Talents has teamed up with Nordic Game to bring you Nordic Game Talents.
From Oct 27-29, the online and interactive event is dedicated to recruitment and career building in the creative & games industry within the Nordic region. The event empowers participants to be part of a bigger community and motivates them to explore new paths in achieving their career goals.
Hiring creative & games studios – Supercell, Funcom, Panzerdog, Tactile Games, Gamecan, Fingersoft, Dazzle Rocks, Redhill Games to name a few from the Nordic region will be participating in the event. These studios will share information on their latest projects, work culture and what it takes to be part of their team. The individual games associations from Finland, Denmark, Sweden, Norway and Estonia will share insights through live sessions on the booming games industry in their respective countries. Career development topics pertinent to job seekers like – How to have a successful first interview, Creative Portfolio reviews will also be discussed.
Experienced game industry professionals and individuals beginning their careers from around the world are welcome to join the event. One-to-one interviews with the hiring studios can be scheduled through the event platform. A great opportunity to get to know the studios and network with game professionals from around the world.
Participating in the event
As a job seeker attending Nordic Game Talents, take a few minutes to fill out a simple registration form. After filling the registration form you will receive a link to the online event platform – PINE, to join the event on 27th October. Participants joining Nordic Game Talents will also receive a free-of-charge pass to the Nordic Game Conference.
To view the complete agenda, please click here and to learn more about the event please visit Games Job Fair
About Games Factory Talents
A Helsinki-based talent attraction agency dedicated to the games & creative industry. Our services include direct recruitment, organizing game job fairs and managing a community of game industry professionals through our GameDev Talent Board.
To learn more about Games Factory Talents visit – Games Factory Talents
810 THE SPREAD
Cumulus Media Launches 810 THE SPREAD, the Bay Area’s First Sports Station Focused on Sports Betting
Cumulus Media (NASDAQ: CMLS) announces that it has launched the Bay Area’s first Sports radio station focused on sports betting, 810 THE SPREAD. The new station brings sports and sports betting news, information, and insights to the burgeoning and underserved sports betting audience in San Francisco. 810 THE SPREAD will deliver behind-the-book perspectives from experts in a highly entertaining and engaging format. 810 THE SPREAD goes live today on the legendary 810am frequency that has been the 80-year home of historic Talk Radio KGO-AM. Cumulus San Francisco also launched the station’s new website at www.810thespread.com. Kevin Graham, Program Director of Cumulus’ sister sports stations KNBR 680AM/104.5FM and 1050 KTCT, adds Program Director duties for 810 THE SPREAD.
Larry Blumhagen, Vice President/Market Manager, Cumulus San Francisco, said: “810 THE SPREAD joins our sports brands KNBR 680AM/104.5FM and 1050 KTCT for a trifecta of dynamic sports content across four signals and streaming everywhere. We are excited about this new chapter and look forward to serving the Bay Area’s passionate sports fans in an incomparable way.”
Blumhagen added: “This is a bittersweet day for us, as it’s hard to say goodbye to the legendary KGO, which has been a part of listeners’ lives for so many years. We want to thank all the people who have been a part of KGO’s historic run these many years – and the listeners who loyally tuned in to the station. Times change, and we must change with them.”
Kevin Graham, Program Director, 810 THE SPREAD, said: “810 THE SPREAD will be the Bay Area’s best bet for sports fans and sports betting enthusiasts, and we are pleased to introduce sports-betting radio to our community. The station will feature a lineup of expert personalities that deliver unique sports talk and sports betting insights that entertain, inform, and engage, along with Cal Football and Basketball as well as select professional and college sports play-by-play events. While 810 THE SPREAD will feature specific gambling information, we believe our entertaining presentation will make it a favorite for all Bay area sports fans and a perfect complement to the legendary KNBR and KTCT. With its addition, it truly shows Cumulus’ commitment to the Bay area as ‘The Sports Leader’!”
The weekday programming lineup for 810 THE SPREAD includes:
6am-9am – Bet QL Daily – The must-consume show for sports fans and betting fans alike. Hosted by Joe Ostrowski, Joe Giglio, and Erin Hawksworth.
9am-12pm – Jim Rome - Aggressive, informed sports opinions, rapid-fire dialogue, and plenty of sports smack. As one of the most prolific sports talk hosts in America, Rome draws massive tune-in with legions of fans known as clones, who live for Rome’s take on the day’s largest issues in sports.
12pm-4pm – You Better You Bet – Nick Kostos and Ken Barkley have you covered for the best bets on the biggest matchups, the latest line movement and updates in the futures market. We’ll have up-to-the-minute coverage of backdoor covers and bad beats, and the cheers and tears that come with them. It’s sports betting conversation like you’ve never heard before.
4pm-8pm – Bet MGM Tonight – Live sports betting updates for all the night’s games as they happen – plus live “look-ins” for Major League Baseball games in progress. Get the latest scores, sides, totals, props, parlays, futures, and much more with hosts Quinton Mayo, Trysta Krick, and Ryan Horvat.
8pm-12 Midnight – CBS Sports Radio
BetQL Network programming is provided by Cumulus Media’s Westwood One through a partnership with Audacy.
For more information or to stream 810 THE SPREAD, visit: http://www.810thespread.com.
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