Gaming Companies Optimistic About iPoker Industry Prospects

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Sunday, October 30th, 2016 | Written by Charles Washington

A lot of gloom and doom articles have been written that paint a grim picture of the current state of online poker around the world. Read just one or two, and you may feel as if the death bells for the industry are already tolling, but when you talk to trade experts you get an entirely different view of iPoker’s current landscape. In fact, during the recent Global Gaming Expo 2016 (G2E) held in Las Vegas, a number of insiders discussed the industry’s future with optimism, stating their beliefs that a resurgence in interest is already gaining pace.

Post-Poker Boom Blues

In pessimistic discussions about the future of online poker, many point to the fact that interest in the game has declined significantly since the poker boom period of 2003 to 2006. In the game’s heyday, online gambling operators generated impressive revenues from the vertical, whilst also recognizing the important part that poker could play in attracting new customers to their sites. These days, however, online poker revenues have been more than cut in half, and across Europe accounts for just 6% of all iGaming revenue, compared to 41% for sports betting, and 46% for online casinos, according to research firm Eilers & Krejcik.

The decline in popularity has led some analysts to conclude that there now exists a lack of interest in the game. While this may be true, the reasons behind its popularity shift are often misinterpreted. There is a false belief that the lack of interest stems from the fact people are not interested in playing poker at all; however, the large amount of viewers tuning in to watch players on Twitch suggests otherwise.

Outdated Sites

Without a doubt, one of the main factors in online poker’s sudden decline was the US government’s passing of the UIGEA of 2006, followed by the Black-Friday shutdown of 2011. By pulling the plug on internet poker in the US, the world’s online poker market was effectively cut in half.

Since then, those online poker companies that are still operational have hardly invested in their products and so continue to offer outdated products that have barely changed. Furthermore, many online poker sites have been bought out by large online gambling companies that have subsequently relegated poker to the back burner. The reason for this is that companies tend to invest in developing new interfaces and games for more profitable lines of business, such as sports betting and online casino games. Consequently, these companies’ lack of interest has led to the game’s stagnation, and so online poker players now find themselves looking for other games to stimulate their interests.

A New Vision of the Future

Many industry insiders at this year’s G2E said that they have noticed a shift in the way companies are now viewing the online poker vertical, and that there seems to be a renewed interest among online operators to develop and grow their sites. This is obviously in stark contrast to the past decade or so in which they have seemed content to leave them untouched to make whatever income they can generate without any extra effort or investment from the companies themselves.

Insiders believe that the renewed interest is coming from a couple of places:

– A New Chance for Competition. In the past, many online operators seemed resigned to the fact that PokerStars was going to dominate the industry no matter what they did. After Canadian firm Amaya took over at the helm and reorganized the business to make it more profitable for its shareholders, however, the professional players who had remained loyal to PokerStars were subsequently sidelined in favor of its recreational players leaving them dissatisfied and looking for new sites to play. As a result, there is suddenly a golden opportunity for poker sites to now develop, compete and wrestle market share away from the previously unimpeachable PokerStars.

– Expansion in the U.S. With online poker only legal in Nevada, New Jersey and Delaware, there simply hasn’t been enough opportunity for operators to earn the sort of profits that would make investing heavily in their sites feasible. Nowadays, several states are seriously discussing the introducing of online gambling legalization, meaning the market may double in size or more by next year.

Poker Boom 2

While online poker may never experience the sort of boom that it did during its heyday, there does seem to be a general consensus that we’re on the cusp of a second resurgence. Nevertheless, online gambling operators are keen to learn from the mistakes of the past, with a number of flaws having been identified during the poker boom’s original rein. These include a flawed affiliate program model which targeted the wrong types of customers, an imbalanced rewards system that heavily favored professional players, as well as PokerStars’s monopolistic stranglehold on the entire industry. With operators now taking a renewed interest in the game, it’s likely that a similar level of increased interest from the players will follow suit.