ATLANTIC CITY - New Jersey's fledgling Internet gambling market is expected to get a much-needed jolt from two poker sites approved this week by state regulators, but observers said the market needs to expand to other jurisdictions to truly thrive.
Late Wednesday, the New Jersey Division of Gaming Enforcement approved Amaya Inc. to offer its PokerStars and Full Tilt brands. The Canadian company has not said when it intends to launch the sites in conjunction with Resorts Casino Hotel in Atlantic City.
Chris Grove, editor of OnlinePokerReport.com, said PokerStars, the world's largest poker website, will boost New Jersey's online poker industry, but it is still too small to support many such sites without adding players from other jurisdictions where Internet gambling is not yet legal.
New Jersey is one of only three states that have legalized Internet gambling, along with Nevada and Delaware. Players must physically be in New Jersey while gambling online, which for now prevents them from linking up with PokerStars customers in other countries.
"PokerStars' entry into the New Jersey market will certainly provide a shot in the arm for regulated online poker in the state," Grove said. "But once the initial wave of enthusiasm fades, New Jersey will still be faced with the reality that its player base simply isn't large enough to support multiple online poker sites.
"To thrive - or perhaps to simply survive - the state will need to link up with other markets, in the U.S. or abroad."
Many observers said they expect PokerStars and Full Tilt will offer not only poker but also online casino games such as slots and table games, which have accounted for the greater share of New Jersey's Internet gambling revenue.
The company did not reveal its plans.
They also said PokerStars could force some competitors out of the market, or into alliances with them.
"It may mean the end of at least one of the online poker sites in the state, with the expectation that PokerStars will dominate market share in the market," said Kevin Mathers, a manager with the poker website PocketFives.
He said the possibility of a poker room at Resorts could give the Borgata some real competition for live poker tournaments.
David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas, expects an "incremental" improvement in the market once PokerStars joins it.
"The market will have to be bigger for the addition of PokerStars to make a bigger impact," he said.
New Jersey has been actively seeking reciprocal compacts with other states and even other countries to offer Internet gambling but so far has succeeded only in small steps toward that goal.
Last month, it approved Caesars Interactive Entertainment to host Internet gambling content from its Atlantic City server for the Delaware state lottery. It also has approved a progressive slots system that links 100 machines in Atlantic City with 600 in Nevada, but they must be played in person.
Internet gambling began in New Jersey in November 2013. After a slow start, it has been showing gradual improvement. Last year, it took in $122 million, and for the first eight months of this year it brought in $96.7 million, an increase of 15.6 percent over the same period a year ago.