Does the Return of PokerStars to the US Market Change Anything?
Unless you’ve been living under a rock recently, you’ll know about the deal where Canadian company Amaya has bought out the world’s biggest poker site by buy PokerStars’ parent company, The Rational Group, for $4.9 Billion. This deal’s primary impact on the US player pool is undoubtedly the expected return of PokerStars to the US regulated markets.
There have been thousands and thousands of words written about this deal, with the majority of those words being positive about the buyout, and how the return of PokerStars to the US will fix the entire poker universe, putting more money in everyone’s poker account. The truth is that while this deal is very good for US poker players, it’s not a worldwide panacea, and there are still major issues in the industry that need attention.
Before the dark days following Black Friday, the poker world was pretty much a single player pool, with Americans playing against Brazilians, and Brits playing against Mexicans, and so on. There had been a few countries to segregate their players from the universal player pool, but they were small enough to have a negligible impact to the liquidity of the pool, and most players had hardly noticed the change. Since the actions of the DoJ on Black Friday three years ago, the player pool has been effectively shatter, and by far the worst place hit has been the good ol’ USA.
If we have a look at the most liquid of the three player pools currently available in the US, New Jersey, we can see how bad it’s got. From being able to play against pretty much any other poker player in the world, a player in New Jersey is now limited to playing against only other players inside the boundaries of the Garden State. From being able to play an almost limitless number of opponents, a New Jersey Poker player is now playing a relatively tiny number of fellow New Jersians.
If we look at PokerScout.com, we can start to have a look at comparing the different segregated player pools around the world.
France had a population in 2012 of 65.7 Million people, and for the purposes of this article, we’ll assume that this hasn’t changed. The PokerStars.fr player pool has an 7 day average number of cash game player of 900. PokerStars.fr is by far the biggest operator in France, with second place having a 7 day average nearly half that of PokerStars. So, PokerStars.fr is only able to attract a minute 0.0013% of the population to play online poker on their site. This is a pretty awful return rate, and is somewhat to do with the rather overbearing and restrictive regulations in the country (they were pretty much designed to ensure the government got a new tax revenue stream, and had little or no consideration to create a sustainable market. In short, the French may not have killed the golden goose, but they gave it a really good attempt).
By comparison, New Jersey had a population in 2012 of 8.865 million, and biggest site, Party/Borgata, has a 7 day Cash player average of 140. Amazingly, New Jersey is better at getting players online, at least according to these number, as this is actually 0.0015% of the population.
This very basic analysis doesn’t take in consideration the difference in demographic and regulatory structure, but I thought it was a good comparison for New Jersey, as I consider the French regulatory regime the nut worst currently available. This combined with the large online gambling black market in the country it should act as a cautionary tale for the New Jersey operators and Regulators. If poker in New Jersey can’t out do France in relative terms, we’d better all pack up and look for new jobs.
But what we need to look at is how the French market has not been able to flourish since it was cut off from the global player pool, and this is with the power of the PokerStars marketing team and brand.
So, if a country as big as France can’t sustain a vibrant online poker business, what chance does New Jersey, or any of the other US States have? Well, in my opinion, it’s not all doom and gloom.
We’ll stick with New Jersey as our exemplar state as it currently has the biggest player pool in the USA. So, what does PokerStars bring to the party that has been missing from the New Jersey Market so far?
To start with, PokerStars still has massive goodwill with it’s extensive US player base, and has gained the database from Full Tilt Poker since it was last operating in the US. In New Jersey, they will be able to reach out to their former players, and market directly to existing poker player, a decent number of which will not have been playing since regulation. This alone will give the company a massive advantage as they re-enter the market, and will most likely jump straight to the top of the PokerScout New Jersey reports. This isn’t really bringing new players to the table though, but the next thing to cover is PokerStars’ marketing experience and budget. I’ve commented on the incredibly low standard of the marketing for the New Jersey Poker operators since the launch of post regulation online gambling there. I’m not the only one who has commented on it, and some of my poker playing friends who live in the state have used phrases that would require significant censoring before I’d be able to use them here. PokerStars is not going to change all of that overnight, but what they will do is advertise and market themselves to new players in a way that will actually work. One of the most obvious ways of doing it is to actually market outside of Atlantic City, which for some reason appears to be the sole area of the state to have any serious ad campaigns running. As far as I’m aware, the internet is available throughout the state, meaning online poker is as well. A survey done at the time of the launch of regulated poker in New jersey had only 10% of people asked knowing that online gambling was both available and regulated by the state. TEN PERCENT! No wonder the player pools are so small.
PokerStars is the biggest brand worldwide for a reason, and their marketing is one of the reasons they keep that title. Amaya have said that they have no plans to change the way PokerStars operates, so I can’t see this changing.
The other major thing PokerStars brings to the table is player retention. They know how to keep players engaged with the game through promotions and rewards, as well as a lot of multimedia content associated with the site. The only current US based brand that even comes close to proving a full suite of multimedia content is Ultimate Poker, and the content they have put out on their YouTube Channel is actually really good. Shame they can’t seem to attract enough player to have decent liquidity on the site.
The players aren’t the only ones crying out for the return of the red spade giant, the CEO of 888 has been quoted as saying that the return of PokerStars “would make all of us work much harder and it would expand the market… I would much rather have a small slice of a large pie, than a big piece of a small pie,” It seems that I’m not the only one who expects PokerStars to outshine what has come before them in the States. Not that it would be that difficult if I’m honest.
The return of PokerStars to the US markets is not going to cure everything that is currently wrong with the game there. No one thing can do that, it’s going to take a lot more than PokerStars turning up, and announcing all is well for the player pool to grow again. What is going to happen though is the return of a giant where currently midgets tread, and I know which one I’m going to pick in a fight.