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I just do not get it

Is there a future in the industry?

I-Gaming: Profitability, Regulation, and Capital Markets

iGAMING GLOBAL TOP THIRTY

Effective Online Customer Acquisition Strategies Through

Skin Wars

ARCADE GAMES – an extension to your skill games portfolio

Skill Gaming Opportunities in the U.S.

CONVERSION RATES

Forming strategic partnerships

The first thing we look for is how a target

CASE STUDY : cryptologic

Innovation: Elements

Copper and Glass: Changing Alderney’s Landscape

Betfair Tackles Tazmania

Currently there are four very strong poker networks

Malta: at odds with French P.M.U

There has been concern at the lack of government

Poker and the Law: Is it a Game of Skill or Chance?

 

 

 

 

Currently there are four very strong poker networks

      There are several poker solutions, but one option for small brands would be to launch a skin or white label turnkey model with an established poker network.  This takes most of the financial risks out of having to build the infrastructure.  These partnerships work well, as whilst a network provides the liquidity, they can also handle the processing which then allows brands to focus on building their existing customer relationships by driving traffic, player acquisition, marketing, affiliate etc.  Poker is also a unique acquisition tool for other gaming products.

     

Already in the poker network sector, we are seeing some existing brands switching providers or breaking away and going it alone.  Betfair announced that they had purchased online poker site Poker Champs along with its Danish software provider Aglet as they plan to leave the Crypto network in 2006.  Most recently Expert Poker left the Prima network to join a new Swedish Train platform, which apparently is a hybrid of the existing.

      Chartwell / Micropower platform.  We may see other larger brands going it alone.  However poker networks offer a secure environment and the opportunity for brands to build a poker business that they could not possibly achieve themselves.  Creating the necessary liquidity is a huge acquisition cost and acquiring poker knowledge takes years of experience.  Poker is a completely different animal to casino and sport betting products.  A few brands have learnt painful lessons about the cost of trying to build a poker business on their own and under-estimate the nature of the poker model entirely.
      Yet if some industry experts believe the poker space is already the new players going to come from?  Perhaps we will see the big brands such as , Poker stars.  Paradise Poker, Ultimate Bet lose market share.  Most unlikely ! But to be a further thorn in the side of the new start-ups, the larger poker networks are set to increase their size  and compete on a level playing field with some of the aforementioned brands.  Therefore expansion must come from new customers as well as new countries.


      But who will be the losers?  As we have already seen there has been a lot of volatility with some brands switching providers or moving from smaller networks to larger ones.  This will have an impact on the smaller networks as sustaining liquidity and retention will be a constant challenge.  So we will likely see a real shake up, as brands either strike out on their own or join larger networks that have forward momentum.  The gap between the small and large networks will increase considerably over the next 12 months.  Currently there are four very strong  poker networks whilst around a dozen smaller ones will be fighting to keep pace.  The problem is that once brands start leaving a network, it is not easy to recover the situation and will likely mean many of the small-medium size network providers will struggle still further, merge or disappear!  There are also a number of networks that are actually an owner / operator promoting their own poker brands.  This must be a direct conflict of interests with their partners trying to build their poker businesses.  Therefore the choice of network partner is becoming limited:  in terms of those that will represent  your best interests, having liquidity and establishing a leading network to compete against the major brands.

     

So whilst online poker has become extremely popular in the past three years, it could be assumed that most people in the UK would have heard of poker by now.  However it is still a relatively small percentage of the gambling population that is actually playing online poker.  There are still some barriers to attracting new customers, such as trusting the Internet with personal banking information’s or whether customers will be paid their winnings.  Also, because poker is very much a skill game.  Texas Hold’em in particular is more complex and requires a great deal of education, new customers, politely known as ‘the fish’, need to feel comfortable with entering a poker room and that they are not going to get picked off by the sharks.


      Internet gambling will continue to grow in the UK.  There is no reason to say it won’t.  you can’t stop people wanting to gamble and the Internet isn’t going anywhere!  But there are also others platforms that have entered the space.  Both wireless and digital TV are the next gambling channels to be exploited.  Poker is mainly seen as the base to expand these new avenues.  Already there are now several poker channels and considerably more poker tournaments being featured on terrestrial and satellite TV.  We will likely see digital TV  creating the most opportunities, as standardizing poker formats will be much easier for iDTV than the standard screen sizes for mobile phones, until technology catches up with fold-away screens and can handle the bandwidth.  Until then there are technical restraints with wireless formats as well as issues over minors gambling.  But having said that, mobile poker will happen  and will create a niche market for many commercial operators such as bookmakers and established brands who will be the first to seize these opportunities.
      In the offline world, we should see more live poker tournaments taking place during 2006 with ever greater prize  money.  A new growth area could see more physical card clubs in the UK based on membership subscription.  We are unlikely to see the majority of land based casino operators opening up poker rooms everywhere.  The reason is that floor space is at a premium.  A bank of slot machines earns a hundred times more in revenue than a poker room.  Perhaps we may see Las Vegas style poker rooms with the introduction of the super casinos.

     

However is there a sting in the tail?  Currently Poker is going through a craze period.  Will it last?  No doubt other trends will enter into the gambling arena.  Poker remains popular and expansion into other formats will help continue its popularity.  Of course trends and lifestyles will change.  Also in the UK, the new Gambling Commission is charged with regulating the gambling industry.  The British government are due to introduce a “White List” for remote jurisdictions that do not make it to the white list.  As  yet, there are no countries on the white list, although we are given to understand that Alderney, the Isle of Man and some others have actively lobbied the British Government for inclusion at the appropriate time.  It is to be expected that any country which does achieve white list status will have a standard of regulation comparable with remote gambling regulations.

  These will be established under the new Gambling Act, thereby minimizing their possibility of advertising their operations licensed in such jurisdictions.  At present the British Government has not made a full statement but it is likely that it will take whatever steps it can to ensure that tax revenues are not lost to the UK from off-shore licensees which are allowed to advertise here.  Full details for the new criteria and when we expect the white list to take effect are due sometime in 2006.


      The British Government also recently announced a crack down and said that it will not turn a blind eye to operators and publishers who are knowingly breaking existing laws regarding advertising gambling products and will be issuing new guidelines as a result.  With that in mind the next 12 months are going to be interesting for poker operators as well as consumers.  There could also be even tighter controls levied with Internet gambling.  Why?  Well, despite new regulations coming into force, could we see Internet gambling spiraling out of  control; plunging the nation into massive consumer debt and gambling addiction?  To a certain extent, it will depend on public opinion and the media’s attitude.

  Some tabloid newspapers would have you believe the new Gambling Act will lead to a serious increase in gambling addiction.  Of course the British Government are very responsive to these kinds of headlines, particularly as gambling throughout the UK will continue to grow with the advent of super casinos on the horizon.  Issues over addiction need to be observed as well as the prevention of minors gambling.  Support in these areas by the industry is absolutely  necessary.  Responsible gambling is key.  But by and large, the freedom for members of the public do what they feel with their leisure time should be upheld.  Adults will always want to gamble, whether on the National Lottery, at the races, in casinos, or in online poker rooms.  Online poker is here to stay, so let’s have all online gaming properly regulated and legislated..

     
AUTHOR PROFILE:  STEVE COOK Tribes Tables Europe, Limited.  The Tribes Poker Network contains brands such as Victor Chandler, Blue Sq, Paddy Power, golden Palace, G-Fed Games, Betfair’s on SPORTS, Bowmans, Doylesroom, and over 100 sub licensees.

 

 
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