PokerStars was first to market in Pennsylvania, and it’s reaping the early rewards. That said, it won’t be the only game in town forever. And at least one operator believes the US online poker market is worth fighting for.
That operator is 888. And contrary to popular opinion, 888 still sees online poker as a big opportunity in the US.
To get the non-PokerStars point of view on the US and Pennsylvania online poker markets, Betting USA spoke with Yaniv Sherman, head of commercial development for 888 Holdings.
888 provides the online poker platform for the Delaware Lottery’s online poker sites, the 888-branded online poker site in New Jersey, and most notably, the WSOP online poker sites in Nevada and New Jersey.
Why PA Could Be a Better Online Poker Market Than NJ
What could be different is Pennsylvania itself.
The overwhelming majority of New Jersey online gambling revenue is generated through online casino and online sports betting products, with online poker amounting to what could be classified as a rounding error, accounting for less than 5% of all online gambling revenue.
But Sherman doesn’t think New Jersey is the blueprint for online poker in other states.
“Well, let’s look at the facts first. New Jersey quickly turned into a casino-dominant market,” Sherman said. “And now sport is taking its share of the online market, with casino growing on the back of sports betting.”
But as Sherman points out, the early environment in New Jersey caused a lot of online poker operators to throw in the towel, and local casinos were reluctant to deal with the more complex product and liquidity requirements, so they focused on casino games.
Those same factors (from payment processing to the novelty of geolocation) won’t be present in other states like Pennsylvania.
And compared to the 54% tax rate levied on slots, Pennsylvania has a favorable online poker tax rate of 16%.
“It’s going to be smaller than casino and sport, but it’s out there, and I think it’s an interesting case,” Sherman told Betting USA. “There are fewer participants that can actually speak the language and provide a good customer experience outside of the black market. Ourselves, GVC, and PokerStars.”
US Online Poker Is a Unique Opportunity
Beyond Pennsylvania, Sherman sees the US as a ticking poker time bomb.
“That’s an interesting part about the US,” Sherman said. “In Europe, you need a significant amount of population,” to maintain a viable online poker market.
As Sherman explains, even in populous “poker” countries like Italy and Spain, there are very few viable brands. But in the US, 888 is maintaining critical mass with 12 million people in Nevada and New Jersey combined.
“That’s very encouraging,” Sherman said. “If you add Pennsylvania, you’re doubling that population overnight.” Sherman believes that would create a significantly bigger network, subject of course to PA agreeing to join the interstate poker network.
As Sherman put it:
“That’s why I say that the US is poker country. Countries that have between 30 or 40 million people in Europe have trouble maintaining that critical mass. In the US, I think it’s different. A smaller population can maintain critical mass.
“Poker is much more embedded in the culture, and you don’t need to explain the game or go through the education process. Everybody plays poker here. It’s part of their everyday life.”
When Will 888 Launch Online Poker in PA?
Sherman wouldn’t provide a timeline for 888’s online poker launch in Pennsylvania, but he made it clear that the sooner WSOP.com is up and running, the better.
“From a B2B perspective, we want to get poker up and running in Pennsylvania in the future,” Sherman said. “With poker, liquidity is king, and building up liquidity and traction with the players is a constant challenge, which is why there are far less competitors in this vertical.”
“So far we’ve been doing very well in the US, looking at the first few days of PokerStars, there’s a healthy market out there, and we would be happy to participate in it.”