Pala Interactive Delaying New Jersey Online Poker Launch
It appears that poker players in New Jersey who are eager for a new site to provide more competition in the market will have to keep waiting for PokerStars to finally be let in, as Pala Interactive has decided to put its poker product on the back burner.
In an interview with Rebecca Liggero of CalvinAyre.com, Pala Interactive CEO Jim Ryan said that his company had planned to launch PalaPoker.com this quarter, but that with what he believes to be the imminent arrival of PokerStars into the New Jersey market, those plans are being pushed back. Essentially, it sounds like Ryan feels that there would be no real opportunity for Pala to compete, so there is no real urgency to try to get things up and running this month. The poker product is “by and large” ready, but with two established networks – WSOP.com/888 (which is for all intents and purposes the All American Poker Network, even if it isn’t technically yet) and the Party Borgata Network – and PokerStars supposedly soon to join (yeah, who knows), “liquidity is obviously a challenge.”
Pala Interactive already has its online casino site up and running, but Ryan says, “The poker challenge is a bit deeper, especially on the back of a PokerStars entry.”
In that particular case, what we’re looking to do is optimize our product. We’re going to go out there, do the best we can, but build a great poker product with the viewpoint that in a market like California where we do have a brand, where we do have a database, it’s a far different set of circumstances and we think we can be a meaningful participant in the state of California. So it is about building for the future with the poker launch in New Jersey.
That “building for the future” part is, to this writer, perhaps the most interesting phrase in the interview. It summarizes what Jim Ryan said earlier in the interview when asked how things have gone for Pala Interactive since entering the New Jersey market. In his answer, he said the company had “three very specific objectives” for New Jersey:
1) “….we wanted to expose ourselves to a regulatory process…positioning us not only for New Jersey but for other regulated US markets as they open up….”
2) To test their software. “….it’s one thing to run that platform in a lab and it’s a whole other thing to expose it to the marketplace.”
3) Trial by fire for new management. “….you’ve got to get out there, you’ve got to make your mistakes…we’ll try things and we’ll fail fast, if something works we’ll invest more, if something doesn’t work, we’ll stop doing it. If we do those things well, we might just capture a meaningful share of the New Jersey marketplace….”
What I find interesting about this is even though Ryan does say that Pala is “in New Jersey for the long term,” it seems like the company is not really in the market to win. It is in the market almost as a trial run in order to set itself up better if and when online gambling becomes legal in California. If things don’t work out in New Jersey, no matter, Pala will apply the lessons learned to the big prize out West.
While I understand the thinking to an extent – it is healthy to go into a new situation knowing that you are not infallible – it seems to me that Pala’s overall mentality when it comes to New Jersey is kind of “loserish.” The company’s goals are to basically just test out their product and see how things go, not to go into New Jersey, compete hard, and do their damnedest to both operate the best online casino for New Jersey customers and make money. It’s more like, “Well, we’re new, so we’ll just see what happens.”
It’s not that Pala should go into New Jersey, guns blazing, dropping tons of money to try to pick up market share, but in my humble opinion, I feel that entering one market for the purpose of trying to set themselves up for a different one is a mistake. Treat New Jersey like California is never going to happen. Aim to be the best. You are going to learn the lessons you need to learn either way, so don’t unnecessarily limit your goals.
Poker pro and online poker streaming superstar Jason Somerville addressed this sort of issue in a recent interview with Flushdraw. Now a member of Team PokerStars Pro, he was once sponsored by Ultimate Poker, the first legal, regulated online poker site in the United States. Ultimate Poker didn’t even last two years. In the interview, he said:
I feel like issues were not prioritized correctly, certain things got overruled that shouldn’t have been, and that the strategy was perhaps too grand. Throughout my time at Ultimate Poker, the goal was never to create a sustainable poker site that lived happily in Nevada and New Jersey, even though those were the only two states we could operate out of. The goal was always more rabid than that. “We’re going to set up in Nevada and learn some lessons,” and then it was “We’re going to set up in New Jersey to learn some lessons so we’re ready to go in California.”
Sounds very much like Pala Interactive.
That said, the poker delay is understandable. Online poker is much more dependent on liquidity than online casino gaming and with two big names in the Party Borgata Network and WSOP/888 already splitting the New Jersey market and PokerStars possibly setting up shop at some point, it would be hard for Pala, a no-name out East, to gain a foothold in the state. It sounds like Pala might still launch its online poker room at some point, but it is probably not the worst idea to give it further evaluation.