Ultimate Gaming stopped Nevada online poker operations

Station Casinos, the Las Vegas gambling company controlled by Frank and Lorenzo Fertitta, is closing its online poker business in Nevada, Ultimate Gaming, because its hasn’t met projections, according to a statement released today.

"As has been the case in other jurisdictions, online poker revenues in Nevada have fallen far short of original projections,” said Tom Breitling, Chairman of Ultimate Gaming.

"Moreover, the state-by-state approach to online gaming has created an extremely cost-prohibitive and challenging operating environment. These factors have combined to make the path to profitability very difficult and uncertain. Consequently, we have decided to cease operations." “We are grateful to the Nevada Gaming Commission and Gaming Control Board for allowing us to be the first company to operate online poker in Nevada and greatly appreciate their leadership and support as the first state to license and regulate online poker," continued Breitling. “We are working closely with the Gaming Control Board to ensure a smooth transition for our customers as we cease Nevada operations.”

Nevada online poker revenue has been underwhelming. In September, the game brought in just US$ 693,000 for the state — its worst month on record. Online poker’s best month was in June, when the World Series of Poker helped the game record more than US$ 1 million in revenue for the first time.

“Needless to say, the online gaming market has been a considerable disappointment,” said Marc Falcone, Station’s chief financial officer, on a conference call when the company reported its third-quarter earnings earlier this week. At least part of Station’s third quarter loss was related to Ultimate Gaming’s closure in New Jersey.

Eilers Research Managing Director Adam Krejcik said that online poker is a “really difficult, competitive market” and that “there’s probably really only room for one company” in Nevada right now. That’s because the size of the market is limited as long as gamblers can’t legally play with people outside the state, he said.

New Jersey and Delaware are the only other states with a regulated online gaming industry. Earlier this year, Gov. Brian Sandoval signed an agreement that would allow people in Nevada and Delaware to play online poker with one another. It’s expected to become reality sometime in the spring of next year.

But with a population smaller than Clark County’s, Delaware is unlikely to have a huge impact on the size of Nevada’s online poker market. Though Sandoval has spoken to New Jersey about a similar agreement, nothing has been announced yet.