In an otherwise declining market, WSOP.com has been the lone bright spot for online poker in the state of New Jersey over the past year.

Revenue figures released this week by the Division of Gaming Enforcement show that in June online poker providers operating under the Caesars license (WSOP.com and 888poker) had their best month in three years. Not only was the $861,713 the most that the partnership between WSOP.com and 888 produced since February 2016, but it was also more than any other poker network generated in the market in two years.

The reason? Shared liquidity.

Shared Liquidity in the US

On April 30 2018, WSOP.com joined its player pools in New Jersey with its player pool in Nevada. Since that time, its revenues from online poker in New Jersey have gone from consistent year-on-year double-digit declines to double-digit increases all while its competition, which have not shared liquidity with another state, have continued to see their revenues fall.

The World Series of Poker takes place in Las Vegas each summer from the end of May through the middle of July making the month of June perfect for assessing the impact of the pairing of the summer series with multistate liquidity sharing. Add to that two other online poker networks operating only in a single state and the effects of shared liquidity become even more apparent.

In June 2018, the first time that WSOP.com in New Jersey was combined with WSOP.com in Nevada for a full month of the World Series of Poker, Caesars reported a 73% annual increase in revenue from online poker in New Jersey while the competition saw significant declines.

Even with such a good June last year, Caesars once again reported year-over-year gains in New Jersey this June as the World Series of Poker posted record numbers of tournaments, prize pools, and participation for its online events.

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However, Caesars’ success in New Jersey extends beyond the dates of the World Series of Poker.

As part of the All American Poker Network (AAPN) that also includes 888’s network of online poker sites in Delaware as well as WSOP.com in Nevada, WSOP.com was able to capture the market lead in New Jersey for the first time immediately following the advent of cross-border liquidity sharing and hold it for 13 of the last 14 months.

Shared Liquidity in Europe

Evidence that shared player pools are essential to the success of online poker extends beyond the state of New Jersey.

Gaming regulators in France, Spain and Portugal realized that the ringfencing of online poker was causing the industry to wither away in their individual countries and with it, the consumer protections and tax revenue that impelled lawmakers to regulate the industry in the first place.

The group entered an agreement to share liquidity in 2017 and online poker providers operating in multiple jurisdictions were first allowed to combine those player pools in January 2018. Like in New Jersey, the regulators in those previously segregated markets in Europe saw shared liquidity turn declines into increases.

“As a result, since the implementation of the Agreement, the online poker market in France, Portugal and Spain has improved its situation, presenting positive figures in each of these countries,” according to a joint press statement from gaming regulators in the three participating countries issued one year after the implantation of shared liquidity.

“Beyond the figures, it is important to note that, until now, there have been no significant incidents in the implementation of the shared liquidity environment in any of the jurisdictions involved,” the statement continued. “This suggests that it is possible to establish a shared liquidity ecosystem between jurisdictions with an equivalent level of protection with the result of improving the consumer experience without compromising its integrity.”

Pennsylvania Needs Shared liquidity for Online Poker

Currently WSOP.com is the only online poker operator in both New Jersey and Nevada, and the state of Delaware requires all of its online poker rooms to utilize a single platform (operated by 888), so the biggest opportunity for online poker in the US currently lies in the Keystone State.

Though Pennsylvania stands to be the largest state by population to offer online poker in the US, it is still not big enough to support a thriving online poker industry without shared liquidity.

With just under 13 million people, Pennsylvania has a population equal to just over a quarter of Spain. Even considering factors such as a higher Gross Domestic Product (GDP) per capita and possibly an overall greater demand for poker, Pennsylvania will still struggle to support an industry which it regulated to protect consumers from unscrupulous offshore operators and produce needed income for the state.

While the Pennsylvania Gaming Control Board (PGCB) diligently works to ensure that online poker platforms are properly tested and secure before allowing them to go live, it is imperative that it keep one eye on the longevity of the market.

The first year is likely to see a significant investment by online poker operators in marketing and promotions, but as we have seen in other regulated markets, once the fanfare wears off, so too will the consumer protections and state revenue.

The Wire Act Still Threatens Online Poker in the US

An analysis of shared liquidity for online poker in the US would not be complete without considering the stance of the Trump administration on the Wire Act and its application to cross-border liquidity sharing.

In January, the Department of Justice released a revised opinion on the Wire Act stating that it believes that any part of online gaming (including information that is routed over the internet) that crosses state lines violates the 1961 law.

The New Hampshire Lottery Commission (NHLC) sued the DOJ and won. While the judgement was limited to the parties of the suit, the DOJ did announce it would delay any enforcement related to its new opinion until at least 2020.

In the meantime, while it is considering whether to appeal the ruling, WSOP.com is continuing business as usual and is expanding the footprint of online poker as part of the World Series of Poker in Las Vegas.