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Gamers Beware: Real-Money Online Gaming Market a Bust in 2014

Tribes looking to get in on the real-money online gaming market might want to consider the experience of the only three states now allowed to offer it. The results have not been good.

New Jersey, one of the three states (the others are Delaware and Nevada), was hoping to bring in $180 million last year, but from Jan.-Nov. of 2014, they saw just $6.1 million in tax revenue from about $40 million in total revenue, according to Casino City’s 2015 Global Gaming Almanac.

Delaware “has struggled to generate large amounts of revenue because of its small population of about 926,000 people,” Casino City said. For the 11 of 12 months of last year, the online gaming revenue take in in Delaware was $1.9 million, the Almanac said.

Nevada took in $10 million for the 12 months ending Nov. 30, 2014, according to the almanac. Although it did not give numbers on what the state was hoping to take in, Casino City did note that the first company to launch an online poker room in Nevada went bust in 2014. The firm, Ultimate Gaming, “also operated an online poker room and online casino in New Jersey.”

Online gaming started in late 2013 in each of the three states. In New Jersey, online servers must be onsite at an Atlantic City casino and can offer any game played in that casino. Delaware offers a full suite of casino games. In Nevada, only poker is allowed. Delaware and Nevada poker players can play each other online as the result of a liquidity agreement between the two states, Casino City said.

Indian gaming tribes will be watching this data closely. In California, tribes have been looking into the Internet poker market for a long time. But “efforts to legalize Internet poker have been ongoing in the state legislature for more than seven years,” a recent report by ICTMN said.

Fourteen Golden State tribes are hoping for a piece of a potential annual $300 million market, according to the article, but their interests do not all align. The Morongo Band of Mission Indians and San Manuel Band of Mission Indians are the strongest proponents of Internet poker.

Recently, California passed AB 431, providing for the licensing and regulation of Internet poker websites in California.

Going forward, the almanac noted that with Republican control of both chambers of Congress “there’s a chance federal action will be taken in 2015 that will curtail the growth of online gaming -- if not outright ban it in most states.”

That’s because “billionaire Republican power broker Sheldon Adelson [is] pushing Congress to ban all forms of online gaming.”

The almanac’s analysis contained one rather lukewarm endorsement for real-money online gaming —“it did provide an infusion of cash into state coffers and showed some growth potential for the future.”

RELATED: Internet Poker: Good Bet for California Tribes?