Harrah’s Holds The Key To Online Poker Future
Posted on August 19, 2010
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Please note that this post contains opinions of the author, and they are just that – opinions. This post in no way gives legal opinions or advice.
Online poker is getting closer and closer to being legal in the United States. When will this finally happen? What will the online poker landscape look like after this takes place? Will PokerStars and Full Tilt continue to be the top dogs with others picking up the scraps?
This article explores some of the possibilities of what the online poker landscape will look like post US legalization and regulation. Does Harrah’s hold the key in shaping the future of regulated online poker in the United States?
The ball is rolling towards US legalization and regulation of online poker. There has already been a bill that passed through a committee in the US House of Representatives that would effectively legalize only poker in the United States. This is just the first step in official legalization, and the rest of the process will take some time.
How much time? My best guess is about two years. Things like this move really slowly through lawmaking bodies, particularly the US House and the US Senate. There will inevitably be changes to the proposed bill, and then more changes after that. It will have to pass in both the House and the Senate. This isn’t going to happen overnight.
What will the online poker landscape look like after this legalization is further along? Right now the top of the landscape is dominated by PokerStars and Full Tilt Poker. PokerStars is approximately twice the size of Full Tilt, and Full Tilt is four times larger than the next room on the list.
This is an extremely top heavy landscape, and PokerStars and Full Tilt dominate in all things related to online poker. Just a few short years ago, Party Poker was the leader in online poker, and they had the most players of any of the rooms. When they pulled out of the United States they lost much of their market share, and settled into third place behind PokerStars and Full Tilt.
I’m guessing that Party Poker will again rise to near the top of the online poker industry. They were the only large operator that cooperated with the United States when the UIEGA passed, which barred companies from accepting wagers from US customers. They paid an amount of over $100 million to the US government, and admitted some guilt as to accepting wagers from US players.
They paid this money for a reason, and it is my opinion that this money was paid to properly position themselves for re-entry into the US market at some point in time. Party Gaming took a long term approach here, forgoing millions and millions of potential revenue that they could have had if they continued to accept United States players. That added with the fine that they paid is not an amount to sneeze at, and this is likely to put them into good graces with the US government when it comes time to re-enter the market.
PokerStars and Full Tilt Poker have taken a completely different approach. They have maintained all along that they are not violating any laws by allowing American poker players to continue to play on their sites. They haven’t paid any fines, as they claim to have not done anything wrong. It is their opinion that they are as well positioned as anyone for the potential of legal online poker in the United States.
This is of course what they are saying publicly. What do you expect them to say? Do you think they are going to say, “Yeah we are in bad shape when US legal online poker rolls in. Party Poker is likely to knock our socks off in the future when they re-enter the US market. They paid a fine, they left the US market, and they are in great shape to dominate in the future.”
No of course they are not going to say that, as it would be suicide for them to do so. But you better believe behind closed doors they are extremely concerned as to how this will affect them. They can publicly back the new laws and state that they are in the same position as anyone, but it doesn’t take a rocket scientist to figure out that Party Poker is better positioned than both PokerStars and Full Tilt.
All three- Party, Stars, and Tilt have gambled as to how this will shake out. Party sacrificed a great deal in the short term in order to better position itself in the long term, while PokerStars and Full Tilt continued to line their pockets in the short term.
I have talked so much about Party, Tilt, and Stars, yet this article title is about Harrah’s? This is because I firmly believe that Harrah’s will have more influence than anyone when it comes to the future of online poker. They have partnered with 888 in some non US ventures, but could an acquisition of Party Gaming be down the line?
888 has a decent poker base, but Party blows them away when it comes to online poker. The Party software is better, they have experience being the market leader, and they are well positioned to re-enter the US market. A match between Harrah’s and Party Poker could certainly dominate the US market.
Harrah’s has built a strong poker brand over the last few years, mainly through the World Series of Poker in Las Vegas. They also host circuit events around the US and around the world, and they are certainly a well recognized gaming brand. They also have a huge database of poker players from all of their land based hotels and casinos, and they could advertise their online product at their brick and mortar casinos and vice versa. They could run online satellites for their live poker tourneys. They could use the same comp system for live play and online play, which should help to boost the revenues of both their live gaming and their internet gaming. The possibilities are endless for Harrah’s online poker, and it is my belief that they will eventually be the king of online poker.
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