PokerStars 95 Billionth Hand Promotion Says Stars is Stuck
PokerStars has announced that the 95 billionth hand will soon be dealt on one of its cash game tables. The Road to 100 Billion hands promotion means that Stars is again pumping in a million dollars of free cash that will be awarded at the 300 milestone hands running up to the magic number.
Milestone hands start at 94.7 billion and happen every million hands until the big 95 billionth hand is dealt. Players sat at the lucky tables who are dealt into the hand will all receive a bonus.
The bonus depends on how many VIP Player Points (VPP) each player has earned over the previous 50 hands at that table (including VPPs earned for the milestone hand itself). Every player gets a baseline $20 plus $60 for each qualifying VPP. The winner of the hand gets their bonus doubled.
The 95 billionth hand works the same way, but each player gets a base $10,000 plus $1,000 for each VPP. Again the winner of the pot gets double the bonus.
Typically this promotion sees a major change of behavior at the tables as the milestone hands are approaching. Weak players add tables and move up in stakes making for juicy games. New player sign ups rocket and the lower stakes fill up with players who are often only vaguely familiar with the game.
The resulting fish fest makes for lots of variance, but a valuable boost for regular players even if the bonus lightning doesn’t strike at any of their tables. I’ve been multitabling up to 16 cash game tables on PokerStars since the 10 billionth hand promotion and I’ve never been close to a milestone hand, but I’ve always found it worth while to put in some extra hours when the promotion comes around.
What is interesting is to look at how often each five billionth hand comes around. Even though PokerStars has cemented its market lead into an almost unassailable position in the industry, the frequency of these promotions tells us that volumes have stagnated since Black Friday.
The first real money hand on PokerStars was played on December 12th, back in 2001. There were already some big names in the market, and since Stars decided not to offer casino games, it grew at a slower rate than competition like PartyPoker.
The 10 billionth hand came in May 2007, 1,986 days after launching. It was dealt at a 1c/2c table and gave a newly signed up 19 year old Canadian student called Justine Hall a $100k payday. She had $0.80 in front of her when the hand was dealt and just $12 in her poker account.
It took an average of 993 days for each of the first two blocks of 5 billion hands to be played. Six months before the 10 billionth hand was dealt, on October 13th, 2006, George Bush signed into the law the Safe Ports Act. This was the death knell for much of US poker as it included the Unlawful Internet Gambling Enforcement Act (UIGEA) which resulted in PartyPoker, then the undisputed market leader closing its doors to US customers.
PokerStars and Full Tilt continued to serve the US market and the 10 billionth hand promotion proved successful at helping Stars build its market share. Big promotions were held for the 25, 40, 50 and 60 billionth hands before Stars announced that the promotion would be permanent, and run every 5 billion hands until the magic 100 billion number was reached.
PartyPoker’s absence from the US market mean that each 5 billionth hand to 25bn took only 212 days on average. To 40bn, five billion hands came up every 123 days, reducing to 107 days as 50bn came around, then 95 days to 60bn. Pokerstars and poker was growing globally.
15 Apr 2011 came like lightning out of a clear sky. Black Friday saw the US DoJ hand down indictments to Full Tilt and PokerStars and both rapidly closed their doors to US players.
Hand 65 billion came on Jul 24th 2011, four months after Black Friday and 115 days after hand 60bn. PokerStars looked to be weathering the new market environment well as 70bn hands came up 103 days later and 75bn 92 days after that.
Both numbers were improved by the closure of PokerStars’ main competitor, Full Tilt at the end of June, 2011. However, since the beginning of 2012, the time between milestone hands has stopped reducing. 75-80bn again took 92 days; 80 to 85, 106 days; 85 to 90, 100 days.
The gap between 90 and the current 95bn will depend on exactly what day the final hand is dealt. At the moment it’s likely to show a small reduction on the last 100 day gap, but should still not beat the 92 day record.
According to PokerScout, the global poker market fell 8% in 2012. The Road to 100bn hand gaps suggest that PokerStars has beaten the market and managed to maintain a steady state. The introduction of Zoom poker which generates much higher hand per hour rates probably means that PokerStars has maintained the steady state only in terms of hands, and that its cash game player base is still below its peak pre-Black Friday.
The PokerStars World Championship of Online Poker (WCOOP) results tend to bear out this analysis. The 2010 WCOOP $5.2k Main Event had a prize pool of $12.2m. Post Black Friday, 2011’s Main Event prize money fell to $8.1m before last September’s event saw a partial recovery to $9.1m.
A lot of the big money tournament players are American, so these figures may be more affected than lower stakes. Event 1 in the series is a $215 6 max two day event. 2010 saw $1.8m in entries, 2011, $1.5m in prize money and 2012 $1.46m.
National regulation which has split out the French, Italian and Spanish markets will also have had an impact, removing players from both the Road to 100bn promotion and potential entry to the WCOOP. It has also added substantial costs and taxes to Star’s bottom line.
As a private company we can’t know what PokerStars revenues have been, or what its cost base is. The Road to 100bn promotion and WCOOP do tell us that growth in revenues on the dot com site has been negligible over the last year.
The shock purchase of Full Tilt, which has leaped into solid second place in site traffic rankings following its relaunch, has probably generated all the growth that Stars will have seen in 2012.
Amid the depths of the global financial crisis, PokerStars has shown itself to be resilient. The next 5 billion hands leading up to the landmark 100bn should show whether Stars can not just hold steady, but grow in adversity.