Delaware’s Online Gambling Industry’s Numbers Decline by 27% in May 2014
Delaware’s online gambling revenues declined by a full 27% from April to May 2014. The results were the worst sign for iGaming in the state since regulation began on the state’s three licensed websites in November 2013.
The news was bad for poker revenues and table game revenues, so the across-the-board numbers proved to be dismal. Every month since the legal Delaware online gambling sites began last November, the numbers had increased enough to cancel out declining revenues at the land-based facilities.
Three Online Gaming Sites See Marked Decline
To have numbers go down so precipitously not only signals danger for Delaware Park, Dover Down, and Harrington Raceway’s land-based facilities, but it also indicates that the future of online gambling as a source of tax revenue might be at stake. Politicians can justify supporting gambling inititiatives when they can truthfully tell taxpayers that their support means lower taxes for all residents. When the numbers are low enough that the different is neglibible, the same political stance is not as easy to make.
On the one hand, a decline of some sort was expected in May. The warm weather months correspond to summer vacation, so most land-based casinos see a rise in revenues as the warm weather months approach. Online gaming sites, on the other hand, see a decline of gambling in those months, for many of the same reasons. People tend to be getting outside more often. With the onset of good weather, some online gamblers are bound to find entertainment opportunities away from their computer. Still, the drop in player stats that Delaware saw in May 2014 is not explained only by warm weather activities.
Delaware Poker Revenues for May
Poker revenues fell 22% in may, down to a total of $57,470. This is one of the reasons Governor Jack Markell signed an interstate poker compact with Governor Brian Sandoval of Nevada in March 2014. The two states agreed to share their player databases. While Nevada and Delaware are among the 15 smallest states in terms of population, such a compact could become advantageous if other U.S. states legalized online poker rooms and also signed the compact. Left to its own resident gamblers, Delaware seems to have a low ceiling.
Delaware Online Table Game Revenues
The Internet table game revenues showed a far worse decline in May 2014. Revenues fell from $137,203 to $72,537, representing a marked 47% drop in revenues. While warm weather accounts for a certain decline, nothing like 50% of the gaming demographic should have chosen to stop gambling. Something more is at work, especially considering that the lottery statistics also showed a drop-off.
Delaware Online Lottery Stats
The Delaware iLottery statistics showed a drop similar to what the poker revenues showed. The state had a 27% decline from $240,496 to $175,601. Lottery gaming is a constant, as a general rule. People who play the lottery tend to play the lottery every single week, or multiple times in a week. These are people of habit. Only when the jackpot rises significantly is there a serious bump in the statistics. State lotteries don’t face the kind of bumps that the multi-state lotteries like Powerball and Mega Millions do, because the progressive jackpots do not rise as quickly or as steeply.
To have the lottery numbers go down by over 25% is a serious sign of trouble.
Delaware Gaming Numbers Analyzed
Not everything is gloom and doom. Reasons exist to explain some of the decline. The transition to warmer weather has already been discussed. Also, May had 30 days in it, while April had 31 days. Having one less day represents roughly 3% of the decline, in and of itself. Also, May contains Memorial Day Weekend. Because this represents the first warm-weather 3-day weekend of the summer, Memorial Day Weekened is a traditional time people leave the house for a weekend on the lake. So legitimate reasons exist to explain away a solid 10% to 15% of the decline.
In many ways, states don’t have enough of a statistical sample to make solid projections. In land-based gambling, casinos tend to compare a month against the same month from a year ago. This represents a fairer and clearer picture of the relative strength or weakness of a gaming enterprise, because the number of days and the holidays are the same. Without a May 2013 sample to analyze, experts are hard-pressed to make much sense of the numbers. A few inferences can be made.
Online Casinos Stronger than iPoker Sites
Behind the numbers, one can see that online casino games are more lucrative than online poker gaming. This has proven to be the case in New Jersey, as well as Delaware. In both cases, online poker had a strong start, but Internet table games like blackjack, roulette, baccarat, craps, and slots have drawn-in more revenues than Texas hold’em.
Delaware doesn’t have enough gamblers to support a robust online card room. Such rooms need up to 9 people at a table. Poker is a player-vs-player style of gaming. Since players want to play different game variants, different style games (turbo, rebuy, freezeout), and at different betting limits, you need a large community to draw in card players. Most of the online table games are played in isolation, or at least lose little allure when played in a solitary fashion.
Why Only Online Poker?
Given how the numbers have broken, one wonders why states like California and Pennsylvania are discussing the legalization of online poker, but not online casinos. One reason might be that the land-based casino industries in those states are not as concerned by iPoker. They are afraid roulette and blackjack and (especially) slot machine players are going to stay at home, while the more social and competitive poker players might still want to head out to a live casino. In such cases, it’s easier for politicians to pass online poker laws.
In the case of both states, gaming analysts see the iPoker laws as trial balloons for a later expansion to iCasinos. These people believe the online gaming companies might want their foot in the door, only to push further at a later time, when the states see the revenues they’re letting slip away.
“Some states considering poker-only legislation view it as a test run to see how the well the state can implement online gaming safely and responsibly before adding casino games to the mix,” said Sarah Coffey of the online gaming-based Ifrah Law. “Nevada and Pennsylvania have said that they see online poker as a potential first step into online gaming rather than a final one. We believe that many poker-only states will find themselves adding casino games down the line when they see how much potential revenue they’re leaving on the table.“
