Last week the Nevada Gaming Control Board (NGCB) granted six casinos an extension for their online poker licenses according to the Las Vegas Sun. None of the six casinos have launched an online poker product at this point.
Under Nevada law, companies that are approved for online poker licenses were required to launch their software within a set amount of time. These recently granted extensions give the following six companies an additional six months to submit their software to the NGCB for testing:
- Boomtown Reno Truckstop
- Grand Siena (Reno)
- LV Golden Nugget
- MGM Resorts
- Boyd Interactive Gaming
Even with the extensions don’t expect a sudden rush of sites to launch in the coming months, as the extensions do not necessarily mean all of these companies are even working towards launching online poker sites in Nevada anytime soon.
The extensions will give a site like Z4 (which has been working towards launching an online poker site) the additional time it needs, and it will also allow the other companies a few extra months to observe the industry, including how the interstate compact with Delaware affects the Nevada industry when it is expected to go into effect this summer.
What’s the holdup?
Given the small market size and the muddied waters brought on by the possibility of a federal ban on online gambling, it now appears that most companies in Nevada are now taking a wait and see approach, evidenced by the words of Ellen Whittemore, an attorney representing MGM Resorts, who told the Las Vegas Sun that the MGM, “was continuing to monitor” the industry.
Jeff Silver, a lawyer for Carson Station and Max was a bit more blunt in his remarks, stating that an online poker room needs 500 players to be viable (I’m not sure where Silver came up with this number) and called the Nevada online poker industry “a loser” according to the Las Vegas Sun article.
Online poker traffic in Nevada
The average online cash-game traffic for all three online poker rooms in Nevada is hovering below 200 players according to www.pokerscout.com; a number that would rank Nevada’s online poker industry in the low 30’s worldwide, below online poker providers like Sky Poker, Enet, and OnGame France.
For comparisons sake, PokerStars average cash-game traffic over the same period of time is 21,000 players according to PokerScout.com, and sites like iPoker, Full Tilt, partypoker, and 888 have 15-20x the traffic of the entire Nevada industry.
Revenue reports don’t support further growth
Beyond the small market and limited room for growth, there is also the matter of the long-awaited revenue reports released by the NGCB in March which showed the Nevada online poker market generating less than $1 million a month in revenue; $824,000 in February 2014, and $8.5 million since launching in April of 2013.
This number that will likely further frighten other potential providers, considering the initial cost of an online poker license in Nevada is $500,000, with a yearly renewal fee of $250,000. That expenditure is on top of the 6.75% tax on gross revenue they must pay.
Considering the current cumulative traffic of the three online poker rooms operating in the state and the current revenue being generated, it doesn’t appear that Nevada has the liquidity to support more than one online poker room, let alone a half-dozen more, so these extensions may be more for show than anything.