iGaming Goes Live in Three States

Since our last entry on iGaming, Nevada, New Jersey, and Delaware have become the first states with (legal) live online gaming websites within their boundaries.

In 2011, the U.S. Justice Department reversed its ruling on internet gambling. Today, legal internet gaming is gradually rolling out across the U.S. How much revenue iGaming will generate and exactly how smoothly iGaming websites will operate remains unseen.[1]


Nevada became the first state in the U.S. to operate legal iGaming.[2] Currently, only online poker is allowed in Nevada, and the Nevada Gaming Commission has no plans to expand beyond this in the foreseeable future.[3] Two websites, UltimatePoker.com and W888.com hold licenses in the state with the express purpose for online gaming, launching their websites in April 2013 and September 2013 respectively.[4] The websites are only allowed to be accessed by players physically within the state of Nevada. Participants are subjected to an extensive identity verification screening that ensures that that they are of gambling age.

But how much is Nevada making off of this new source of revenue? Nevada’s gaming commission has indicated it will only report iGaming revenues in a separate category of monthly reporting once there are three online poker sites operating in the state.[5] With just two websites up and running, there are no official reports of online poker revenue to date.[6]

Chapter 463 of Nevada Revised Statue[7], not only authorizes iGaming within the state, but positions Nevada for interstate gaming, allowing Nevada to negotiate online gaming agreements with other states.[8]


Delaware passed legislation on June 27th, 2012 authorizing online gaming within the state. In October 2013, Delaware rolled out the first “real money stakes” internet gambling games to selected users, and in November 2013, online gambling was made widely available to Delaware residents[9]. Users physically in Delaware are able to play not only online poker, but also blackjack, roulette, and slot games.[10] While online gaming is not expected to generate much improvements in tax revenue, the expectation is that younger gamers will be drawn to Delaware’s brick-and-mortar casinos.[11] After launching online gaming, gamers in Delaware who tried to play poker experienced connectivity issues due to location-based software issues.[12]

New Jersey

New Jersey became the third state to offer iGaming on November 26, 2013, after the New Jersey Division of Gaming Enforcement green-lighted six casinos licensed to operate statewide internet gaming. The six casinos approved are the Borgata Hotel Casino & Spa, the Tropicana Casino and Resort, Trump Plaza Hotel and Casino, the Trump Taj Mahal Casino Resort, Bally’s Atlantic City, and Caesars Atlantic City.[13] Registered gamers who are physically within the state of New Jersey can play blackjack, slots, and poker online.[14]

As of early December 2013, Atlantic City’s casinos are struggling with their verification systems. The general manager at the Tropicana Atlantic City, Steve Callender, said “about 75 percent of people who have tried to play on the resort’s online gaming website — TropicanaCasino.com — have been denied because the system could not verify they were in New Jersey.” This is due primarily to three reasons: technical problems, users not physically present in New Jersey trying to access these sites, and some major banks, PayPal, and American Express having policy to not process online gaming transactions.[15] According to Moody’s, iGaming in New Jersey stands to generate $250 million to $500 million within its first year.[16] Being an early mover in iGaming, New Jersey hopes to gain an edge over casinos in nearby states, such as Pennsylvania, that have caused Atlantic City’s land-based operations to struggle in recent years.

What’s Next?

According to the National Conference of State Legislatures, six states are working to authorize iGaming within their borders. California, Illinois, and Pennsylvania each have iGaming resolutions pending within the state legislative bodies. Colorado, Hawaii, Iowa, and Mississippi had iGaming laws which failed to pass in 2013.[17] With three states already conducting iGaming operations, it’s only a matter of time before the first interstate online poker games make their debut.

Contributed by:

Nicholas Farrae

Senior Analyst, Economics & Gaming

nicholasfarrae@tmg-consulting.net or 504.569.9239 x 31



The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

[1] “So What is New Jersey’s Online Gambling Market Really Worth?” OP Report. Web. Online Poker Report. 23 April 2013.

[2] “Know When to Fold.” The Economist. Web. The Economist Newspaper Limited. 14 Sep. 2013.

[3] “Nevada Examines iGaming Changes.” Casino Connection AC. Web. Casino Connection Atlantic City. 31 Oct. 2013.

[4] “Nevada Poker Sites.” US Poker.com. Web. USPoker.com 2013

[5] “Poker Revenues Rise in June.” Las Vegas Review-Journal. Web. Stephens Media LLC. 2 Aug. 2013.

[6] “Nevada and New Jersey Jockey for Online Gambling Revenue.” The Pew Charitable Trusts. Web. The Pew Charitable Trusts. 11 Feb. 2013.

[7] “Chapter 463—Licensing and Control of Gaming.” State of Nevada. Web. State of Nevada. 2013.

[8] “In Nevada, Online Gambling Poised to go Interstate.” Marketplace Business. Web. American Public Media. 22 Feb. 2013.

[9] “Caesars, Partner 888 to Launch Online Poker in Nevada.” Reuters. Thomsonreuters.com. 17 Sep. 2013

[10] “Delaware Ups Ante with Online Gambling.” Delaware Online. Web. Gannett. 31 Oct. 2013.

[11] “Online Gambling to be Allowed in Delaware.” NPR. Web. NPR. 4 Nov. 2013.

[12] “Delaware Internet Gambling Facing IP Issues, Lack of Poker Traffic.” Pocket Fives. Web. PocketFives.com. 10 Nov. 2013.

[13] “Atlantic City, NJ – NJ OKs Statewide Internet Gambling For 6 Casinos.” Vos Iz Neias. Web. VINNews.com. 25 Nov. 2013.

[14] “Christie Signs Bill Legalizing Online Gambling.” Philly.com. Web. Philly.com. 2 Feb. 2013.

[15] “Online Gambling Issues persist into Second Week of Web Betting on N.J.” New Jersery On-Line LLC. Web. Advance Digital. 5 Dec. 2013.

[16] “Online Gambling is Good for New Jersey’s Credit Rating.” The Washington Post. Web. The Washington Post. 2 Dec. 2013.

[17] “2012 Legislation Regarding Internet Gambling or Lotteries.” National Conference of State Legislatures. Web. National Conference of State Legislatures. 7 Feb. 2013

At What Point Is the Casino Gaming Market Saturated?

As states such as Massachusetts, Florida, New York, New Hampshire, and Maryland enter or expand their presence in the casino gaming market, we have to ask ourselves the question: at what point will the market be saturated?

State by state, casino gaming has been legalized in the U.S.  In years where state and personal budgets are tight, the pace of legalization accelerates as lawmakers search for sources of jobs and for revenues to fund state services and programs.  With each state that has entered the fray, gaming revenues have risen.  The growing American population and the growing acceptance of gaming have fueled the casinos nationwide.  However, established gaming centers such as Atlantic City have suffered, as the majority of the nation’s population is now within a drive or short flight of a casino.

Over the past 8 years or so, I have been analyzing gaming markets across the U.S.  Most recently, I’ve been assessing the potential for expanded gaming in Florida and the Northeast/Mid-Atlantic/New England markets.  What I’m seeing and forecasting is this:  the marketplace can absorb the casinos that are currently proposed, but too much additional supply above and beyond these proposals could saturate the market.  The additions of proposed supply will certainly make competition tougher and will likely have a negative impact on existing gaming operators that don’t step up to the plate.  This competition will be great for gamers – they’ll have more options, and will be able to pick and choose where to spend their gaming dollars.

All of this makes the jobs of those in the gaming industry harder, but potentially more rewarding.  The vast potential for gaming in the United States has not been tapped completely, and smart players in the game will benefit.  In addition to building and operating facilities that gamers will like, gaming firms must consider location.  Capturing gaming dollars will largely be a function of finding the right location – build too far from the population or too close to competition, and revenues could suffer; build in an inaccessible location or one that the community is not in favor of, and no one will come; ignore the potential for synergy with other entertainment options (including other casinos!) and you might be turning away revenues.  Thorough analysis, site evaluation, and thoughtful site selection can help make the difference between building a casino that performs on-par with the market, or one that not only is a market leader, but has the ability to grow the market.

So, the answer to the question of saturation isn’t that simple.  Are we at saturation?  No.  Are we getting close?  Mabye?  Will smart gaming operators be able to grow the market?  We’ve seen it before, why not again?

Contributed by:

Suzanne P. Leckert

Director of Gaming, Feasibility & Land Use Analysis

suzanneleckert@tmg-consulting.net  or (504)569-9239 x 33

The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.