New Jersey has officially expanded online gambling outside of their borders. On Thursday, the New Jersey Division of Gaming Enforcement approved Caesars Interactive Entertainment to host iGaming content for the Delaware lottery from servers in Atlantic City.

This is a momentous event for regulated NJ online gambling, as it is the first time that the state has approved an interstate agreement since legalizing iGaming in 2013.

Agreement will provide content to Delaware players only

Per the terms of the agreement, SG Interactive will provide iGaming content to the Delaware Lottery from servers located in Atlantic City. The content offered to Delaware Players will be slot games and these games will only be available to Delaware players.

Although announced on Thursday, servers began hosting content on Monday. This allowed operators to see if there were going to be any problems before announcing their new arrangement to the world.

According to David Rebuck, director of the DGE, “This arrangement exemplifies a great collaborative effort between the Delaware Lottery, the New Jersey Division of Gaming Enforcement, Scientific Games, and Caesars Interactive Entertainment.”

First steps towards eventual interstate player pools?

The ink wasn’t cold on the initial announcement before analyst hailed this as the first steps towards an eventual sharing of players pools between Delaware and NV for online poker and Delaware for general casino games.

Nevada and Delaware presently share online poker pools, albeit the impact has been minimal for involved parties. A combined network including New Jersey would have a larger overall impact in both areas and could help bolster a struggling online poker market in both Nevada and New Jersey.

Caesars Interactive CIO Marco Ceccarelli heralded the new partnership on Thursday, stating:

“We are happy to do our part assisting regulators in New Jersey and Delaware and appreciate their progressive and innovative work to help continue to grow and push the regulated online gaming market forward in the United States.”

Will interstate content hosting become an option for states considering regulation?

This new agreement also presents an interesting possibility to future states considering online poker regulation. Smaller sites that may have problems with developing or hosting content could reach out to other states to provide this content for them on a contract basis.

Most states that have investigated the matter of iGaming regulation have also explored interstate compacts. With the latest developments in New Jersey, states could also explore the option of interstate hosting.

Naturally, the providers would go through the licensing process in the same way that intrastate providers have. However, it could allow some smaller sites to operate without having to put up the costs for a physical data center.

Another option would be to setup a basic operation within the state and then have the content for that basic client fed from interstate servers. That way all geolocation and player verification could still occur within state lines but the gaming content can transmitted from interstate servers.

Thursday’s announcement will open the doors for future speculation and innovation and has reinforced New Jersey’s position as the industry leader for iGaming in the United States.