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The Shutterings: Subscription Site LiveAce Calls It Quits

liveacelogoBack in August, we at FlushDraw asked this question: “Can a paid-subscription online poker site succeed in creating a sustainable player base of American players?”

The answer, again, is usually “no”.  To few onlookers’ surprise, real-money subscription site LiveAce Poker has quickly folded its doors, going out of business after less than four months of live play.

Live Ace Poker’s quick folding ought to slam the door on the paid-subscription model for online poker sites, which has been tried repeatedly over the past several years and simply will not work.  Before LiveAce, there was ClubWPT… and Duplicate Poker… and Pure Play Poker… and a couple of others.  ClubWPT and Pure Play are still around, but the subscription model (in which real-money prizes are awarded but the playing of poker is technically free as a way of getting around the “consideration” prong of US gambling laws) remains a lousy way of trying to grow a business.

And why is that?  Why do these subscription sites fail to capture consumer interest?  The answer is that the upfront investment in consumer time is invariably way more than the average consumer wants to commit.  Even for a modest $20 or $30 monthly subscription, these sites come off as lousy deals for casual players, who don’t want to commit to the tens of hours a week needed to play profitably.  Yes, each tourney is free, but for most players, it doesn’t matter if one has to play dozens of these tourneys just to scrape together a few small wins.

Such sites also have to bend the truth a bit in claiming that this is how poker fans can play online poker legally, except that playing online poker has always been legal, or at least not expressly illegal, in almost all US states.  The number of states where playing online poker is technically illegal varies depending on how it’s being evaluated, but the general answer is somewhere between two (Washington, Utah) and seven.

But beyond the fibbing to players, what else causes marketing difficulties?

What invariably happens is that sites such as LiveAce attract a very small core of dedicated online members who can spend the amount of time needed to make a profit, but the these sites themselves have increasing difficulty in growing a consumer base among casual players.  And besides all the extra legal issues, if a site with the brand recognition of the World Poker Tour, with the name recognition that ClubWPT should have, can’t make a go of it, how does a new name like LiveAce plan to succeed?

Just because something can be done, it doesn’t mean that it’s a good idea to do it.  LiveAce tried, with a couple of intriguing twists to its membership plans, but it still only claimed to be legal in about 30 states, not including such populous states as New York and Florida.  In less than four months, the site’s owners appear to have realized the inevitable; the subscription model just doesn’t offer enough “oomph” to achieve critical mass.

LiveAce has announced that refund requests will only be honored until March 1st, 2014, so it behoves everyone who played there to ask for their remaining funds as quickly as possible.  Here’s the complete LiveAce statement, which appears right now, plastered across the front of the site’s home page, but is likely to disappear at any time:

Dear LiveAce users:

Thank you so much for your support since our August launch. We have worked tirelessly over the past two years to bring competitive, legal, rake-free online poker to the US. Unfortunately, despite support from our passionate user base, we haven’t been able to generate revenue sufficient to cover our operating costs. As a result, we have suspended operations at this time.

We will continue to honor cash redemption requests until March 1, 2014 and if you have unused Club Live memberships or chip packages we will reimburse you. Cash redemptions of auction winnings will be made via Dwolla or check to the address on file. Refunds for unused Club Live memberships will generally be reimbursed via credit to the credit card used for the purchase. If you previously submitted a cash redemption for auction winnings via our site, that request will be honored and there’s no need to take further action. In order to redeem cash or request refunds please follow the steps below:

1. Mail a letter (we cannot accept email, website or other electronic communications) detailing your request to:

a. LiveAce LLC, PO Box 20028, New York, NY 10001

b. Please include Username, First and Last Name, Complete Mailing Address (e.g. Street, City, State, ZIP code), Email Address and preferred method of payment: (1) Dwolla with account number and associated email or (2) mailed check.

c. Ensure you are verified to redeem cash auction winnings. If you are not, please include a legible copy of a current government-issued ID and signed form W-9 to verify your identity, age and state of residency.

d. We will make every effort to process requests within 4-6 weeks.

We appreciate your support and hope you enjoyed being able to play competitive online poker again.

The LiveAce Team

And so, for LiveAce Poker, it’s arrivederci.



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