- 25.03.2011, 10:24
- Zuletzt editiert von Furo: 25.03.2011 10:25.
Biggest Online Poker Room Takes in $20 Billion in Revenue Annually: New Jersey The Biggest Loser
As it pushes for legislation that would make Internet poker legal in the state of Nevada, the world’s largest online poker room, PokerStars, for the first time in its nearly 10-year existence released financials and the numbers, as expected, are staggering.
The privately held company stated that it makes $20 billion in revenue annually and has 38 million members. PokerStars is two times the size of its closest rival Full Tilt Poker in terms of overall active customers, which would seem to indicate that Full Tilt takes in at least $10 billion in annual revenue.
The release of these numbers is vital for states looking to legalize online poker independent of any federal laws that might pass. PokerStars itself is attempting to pass through a measure that would allow for Nevada to host such Web gambling sites. Florida and California are two states actively pursuing the legalization of Internet poker as well.
Earlier this month, New Jersey State Senator Raymond Lesniak (D-Union) attempted to pass through his own co-authored bill that would have made the Garden State first in the US to legalize Web gambling, both poker and sports wagering.
With a deadline of March 3 to make a final decision on the bill, NJ Governor Chris Christie applied an absolute veto to the measure during the final hours.
Based on the PokerStars numbers, which were not readily available to Lesniak or any organization assisting him, the Senator’s own assessment of online gambling’s financial potential appears to have been very much understated.
“Financial studies produced by independent fiscal analysts note that Internet gaming will produce, at a minimum, $35 million in new tax revenues for the State of New Jersey, $210 million in gross revenues for Atlantic City’s casino industry, 1,500 jobs for Atlantic City residents, and $70 million in direct personal income from these new jobs. However, these numbers could be as high as $350 million in new tax revenues, 57,000 new jobs, and $470 million in direct personal income. The Governor and I both recognize that New Jersey cannot afford to leave those dollars and jobs on the table.”
While it is true that the failed Lesniak measure would have applied strictly to New Jersey’s nearly 9 million residents, PokerStars numbers support the notion that NJ might easily have taken in close to $1 billion in gross revenues annually, assuming everyone in the state were to gamble online, which obviously wouldn’t happen.
Still, the $1 billion number is conservative when one takes into account that the player number provided by PokerStars is not necessarily an active base, but rather the number accumulated over the past decade. It is also unclear whether the customer figure (members) incorporates those who play on the site for free. Gambling911.com presumes they are including non-depositing players.
New Jersey Governor Chris Christie
“Governor Christie may not have been so fast to scoff at the numbers presented by Senator Lesniak if they were more in line with reality,” suggests Payton O’Brien, Senior Editor for the Gambling911.com website. “It is obvious from the PokerStars release that the $210 million in gross revenues was indeed a gross underestimate of what New Jersey could have made on a yearly basis.”
O’Brien offered up these calculations: “Taking out the free accounts and nonactive customers, PokerStars has 20 million members tops playing at any given time throughout the year. Each million ‘real cash’ player would generate $1 billion in revenue, or $20 billion yearly based on the firm’s own numbers. Whilst, if only a million of New Jersey’s nearly 9 million residents were to dabble in online poker during any given year, it can be assumed that the state easily takes in $1 billion in gross revenue during a 12 month period, nearly five times the amount suggested by Senator Lesniak.
“And this is all based on the idea that 1/8th of New Jersey’s ‘official’ residents would place bets online. It also doesn’t take into account the more significant wagers going towards sporting events such as the Super Bowl, March Madness and Kentucky Derby”
While O’Brien acknowledges that a portion of those 9 million residents living in New Jersey are underage, she notes that the New Jersey measure included sports betting in Atlantic City’s casinos, which would have attracted countless numbers of people from outside the state.
And the 10 percent figure Ms. O’Brien uses may also be conservative based on national studies that note 95 percent of American citizens have gambled at some time in their lives. About 82 percent have played the lottery, 75 percent have played slot machines, 50 percent have bet on horse or dog races, 44 percent have gambled with cards, and 34 percent gamble via bingo. Approximately 26 percent have bet on sports events. About 74 percent of the American adult population have gambled in casinos.
“Yes, Chris Christie is the biggest loser after considering these numbers released by PokerStars,” O’Brien concluded. “And with PokerStars using the word ‘over’ in conjunction with that $20 billion figure, one has to assume the number is low to begin with. In the end, they still don’t want US officials knowing the ‘real’ amount taken in.”
- Christopher Costigan, Gambling911.com Publisher