Ultimate Gaming’s Gamble On Online Poker Fails, Shuts Operation

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Monday, November 17th, 2014 | Written by Stephen Smith

On April 30th, 2013, Las Vegas-based company Station Casinos LLC became the first operator to launch regulated online poker in Nevada and in so doing became the USA’s first legal iPoker website. It had been hoped that Ultimate Gaming’s pioneering move would herald the beginning of an online poker revival in the US, but 19 months later and the site has decided to follow up the closure of its Ultimate Gaming brand in New Jersey by also pulling the plug on its Nevada operation. As the surprise news read on the Ultimate Poker website:

“We regret to inform you that Ultimate Poker will cease online poker operations in Nevada effective Monday November 17 at 12PM (Noon) PST upon complying with all necessary gaming regulatory requirements. WE ARE NO LONGER ACCEPTING NEW DEPOSITS OR REGISTRATIONS.”

According to Ultimate Gaming Chairman Tom Breitling, Station Casinos decided to cease operations because online poker revenue in Nevada had fallen significantly short of lofty pre-regulation projections, and his company’s move now threatens to cast a long shadow over the regulated US online poker industry as a whole.

Players’ Funds Safe

As was the case following Ultimate Gaming’s exit from New Jersey, there is no reason to suspect player funds are anything but safe in Nevada. It should therefore be a relatively simple process for players to retrieve their account balances, and any queries regarding the site’s closure can be directed at the Ultimate Poker website.

Far Short Of Initial Projections

Between May and September 2013, Ultimate Poker was Nevada’s sole online poker operator and enjoyed a seven day average of more than 220 cash game players. Following WSOP.com‘s entry, however, Ultimate Poker’s traffic started to head south and at the end of its run Ultimate Poker was averaging just 60 cash game players according to traffic tracking site PokerScout.

In addition to falling traffic, Nevada has also experienced plummeting revenues and after peaking in June with $1.04 million in combined gaming revenues, the Silver States’s three online poker sites of Ultimate Poker, WSOP.com and Real Gaming generated a mere $693,000 in September, the lowest monthly figure since the Nevada Gaming Control Board started releasing its online numbers.

Poker’s Cost-Prohibitive Environment

Further expanding on Ultimate Gaming’s decision to cease operations, Tom Breitling highlighted the restrictive costs of doing online poker business in just three regulated states, each of which runs a separate ring-fenced market. Without sharing player pools the company’s online costs proved too expensive and in the third-quarter Station Casino reported a net loss of $30.3 million, at least $10 million of which was accounted for by its online gaming operations. As Ultimate Gaming Chairman Tom Breitling, explains:

“As has been the case in other jurisdictions, online poker revenues in Nevada have fallen far short of original projections. Moreover, the state-by-state approach to online gaming has created an extremely cost-prohibitive and challenging operating environment. These factors have combined to make the path to profitability very difficult and uncertain. Consequently, we have decided to cease operations.”

Pros Rooted For Ultimate Poker Success

In 2013, Chairman Tom Breitling laid out his vision for the site’s future, saying he hoped the brand would eventually become “the players’ choice for online poker.” Soon after, Antonio “The Magician” Esfandiari became Ultimate Poker’s official Brand Ambassador, and before long the site’s sponsored roster started too swell with talent.

Reality and costs soon caught up, however, and the company just as suddenly began to end its affiliation with many of the members of Team Ultimate. In the end, just Antonio Esfandiari, Jason Somerville, Danielle Andersen and Dan O’ Brien were kept on, and following Ultimate Poker’s closure, Somerville tweeted “RIP UltimatePoker. thanks for the memories, the opportunity, and the sweet leprechaun avatar,” while Dan O’Brien’s message read:

“Ultimate Poker and its ambassadors tried hard to create a unique, entertaining poker environment and I’m proud of the steps we made.”

Interstate Compact Becomes More Pressing

When Ultimate Poker launched in Nevada, the company was not expecting the legal online poker market to be restricted to just three states, and as Station Casinos CFO Marc Falcone commented recently, “the online gaming market has been a considerable disappointment.”

With Ultimate Poker’s departure, the state of Nevada is now reduced to just WSOP.com and Real Gaming, of which the latter continues to show a single cash game player over a week’s period and a peak of seven players. As a result, the need for Nevada and Delaware to enact their interstate poker compact becomes all the more pressing, as is 888’s plan to take advantage of the agreement by setting up a shared poker network known as the All-America Poker Network (AAPN). As well as being the online gambling monopoly provider in Delaware, 888 also provides all the software in use by WSOP in Nevada, and after news of the All America Poker Network was announced in February, an 888 investor statement, read:

“We are aiming to deploy a shared poker network across the two states, which will offer poker players in each state an enhanced customer experience. We remain fully committed to the U.S. market through our B2B business as well as through our interest in the AAPN joint venture.”