Delaware iPoker Revenue Decline Likely More Molehill Than Mountain
Reports in recent days indicating a calamatous decline in Delaware’s iPoker and iGaming revenue numbers for the month of March, 2017 are interesting, but likely not as vitally important nor indicative of a downward trend as one might assume.
Before we dig into a deeper look at why, here’s the top-line answer: The state’s smallish online gambling numbers are always going to be subject to large amounts of variance, and the March reports of this year or any given year are also subject to the online gambling world’s perennial spring doldrums — the time when lots of players manage to step away from their computer screens and enjoy the warer weather.
When talking about online poker and Delaware specifically, one must also consider that there really isn’t an online-grinder community of players who must put in time at the tables. Barring player-pooling deals with other jurisdictions, Delaware’s numbers will always bounce up and down… a lot.
On to some of the details. The Delaware Lottery, the body through which all of the state’s online gambling is authorized, provides a monthly update on revenues generated through the state’s three licensed online sites, run by racinos Delaware Park, Dover Downs, and Harrington Raceway. The state provides both collective numbers and breakdowns by online site, and also includes other breakdowns including total amount wagered and net winnings for the house. Those are also broken into subcategories by market, such as “Table Games,” “Video Lottery,” and “Poker Rake & Fees.” Also included is a state-by-state summary of how many new online account sign-ups, individually and collectively, the online casinos have managed to snare.
The March numbers aren’t all that unusual, in context, but as with any small-market breakdown, there are going to be anomalies. One such is that in March of 2017, total online-poker revenue in the state (meaning earned rake and tourney fees) was $17,715.38. That is indeed a severe drop-off of 53% from the March 2016 statewide total of $37,324.06.
There is indeed a problem with Delaware’s online-poker offerings, which have been in steady decline over the past 10 months. The net revenue from Delaware online poker peaked at $40,337.40 last May, and it’s been dropping ever since. The main cause for the overall decline appears to be a steep drop in participation from Dover Downs’ online players, with the other two sites suffering due to the overall reduced liquidity. The problem is that the overall market is still so small, it’s hard to point a finger at the true reason. It could be Dover Downs not promoting its online-poker offerings successfully, or it could be a small number of the site’s early, high-volume Dover Downs players moving on to other gambling forms. The state needs liquidity in the form of player-pooling pacts with other jurisdictions, but most everyone knew that already.
However, none of the other numbers that summarize Delaware’s ongoing iGaming experience show anywhere near such an overall decline. Given that online poker itself is only a small sliice of the state’s online offerings, that’s much the larger point.
For example, the total revenue for all of Delaware’s online gambling for March of 2017 was $8,029,648.48. From one viewpoint, that’s way off from February 2017’s $10,359,219.37 total and January 2017’s $13,440,499.27. The bbetter comparison, though, is year-over-year, to March 2016’s $8,351,203.55. March 2017 is thus down a little over 3%; that’s mildly troubling, but not earth-shattering.
Folks often underestimate how seasonal online-gambling number can be. Delaware’s summertime numbers last year were between $6 and $7 million per month. Last month’s $8.1 million figure for March is very typical for spring or fall, but the winter months are the big bonanza: Delaware iGaming revenue topped $15 million in both November and December of 2016, and January 2017 wasn’t that far behind. Seasonality? It’s important.
Another red herring is counting the total number of new-account signups and using it as a signature indicator. One recent report bemoaned the fact that there were “just 252 new player registrations” in Delaware in March of 2017. Only one problem: That’s the normal range. Here are the total number of new signups in Delaware, in order from March 2016 to February 2017: 320, 268, 305, 278, 252, 306, 279, 257, 234, 298, 300, 247. In that light, and also remembering seasonality, last month’s 252 new accounts is a non-issue.
Yes, it’s been a slow news cycle, and that’s likely the reason the story exists and is getting the play it has. And yes, Delaware could really use a deal if it wants the poker portion of its online gambling to survive and thrive. It’s not, though, as large of a deal as recent reports make it seem.