Saturday, June 21, 2014

Liquidity and Access - Two Peas in a Pod

Liquidity and Access - Two Peas In a Pod

Members of the poker community have been a down-trodden bunch since that ominous Black Friday of 2011. Following the indictments that came down from the US Department of Justice for online entities like Full-Tilt Poker, PokerStars, and Absolute Poker/Ultimatebet, what was once a thriving online society of global players fell into disrepair, confusion, and anger. American professional poker players scurried for the nearest borders to set up house and their laptops in order to continue their lucrative, relentless pursuit of an honest living through gambling. Poker players in the rest of the world continued as usual, knowing that their governments were unlikely to act in such a paternal way.

But that April day changed the online poker community once and for all. What the US market brought to these global sites was liquidity, defined as huge numbers of players willing to risk small and large amounts of money on the game. Once the US market was squelched, the otherwise unnoticeable restrictions of other countries bent on keeping their own tax money and not sharing with their neighbors, became obvious. The real truth of online poker was there for everyone to see - without healthy, robust numbers of players online at all times of the day and night, online poker was not the cash cow it seemed to be. 

 For the last three plus years advocates of the game have been trying to recapture that magic and most of those efforts have fallen woefully short of the goal.

Online poker is still played legally throughout Europe and illegally by many Americans on sites based outside the US. Yet, online poker revenues have fallen overall during that time. While PokerStars still maintains a clear advantage over other sites, all have experienced declines in players and revenue since 2012. What once was a "no brainer" investment has become a cautious choice for investors. What once was a sure thing has become a gamble.

The recent emergence of legal online gambling in Nevada, Delaware, and New Jersey has done little to improve the picture. US online revenues, especially in New Jersey, have fallen far short of optimistic projections and player numbers have ceased to increase as they did over the first few months of play.

The US online poker industry has been searching for answers and coming up short. National approval of online gambling, once thought to be in the offing, has fizzled and all but died. Individual states, in addition to those already committed to online gambling, have had their proposals bogged down with details and stuck in legislative committees. Among the biggest arguments holding up any progress toward approval is the so called "bad actor"  clauses imbedded in the language of many state bills that forbid any company that operated in the US before Black Friday from participating now. Left holding the bag outside the locked doors of the US online poker market, companies like PokerStars have been looking for a way in.

A scenario like this makes most poker players anxious and when people get anxious they often grasp for straws. 

So, when the merger/acquisition of PokerStars by Canada's Amaya Gaming Group was announced a few weeks ago, American poker players began to salivate imagining that this was the solution to all their ills.

 And that's what everyone was thinking and many were saying - once PokerStars is back in the game, even under another name, we can get back to what we were doing before. And that went on for a week or so until one poker journalist had the insight to see through all the hope and anticipation and the guts to write about it. My twitter friend, Robbie Strazynski, was that guy and I do not pretend to be able to say it better than he did. PokerStars or no PokerStars, the online poker market still does not have nor will it have the liquidity (translate simply as "number of players") to be as good as it was before without everyone, anywhere being able to get online and participate.

Read Robbie's eloquent piece here: Robbie's Article

And what about access? Poker players like to play poker. They do not enjoy flipping from screen to screen trying to get their credit card to work or trying to transfer funds from here to there. They want it easy and until someone can make it easy - like it used to be - to get money in and money out of an online poker site, this dilemma will cut further into the necessary numbers. 

I don't expect a lot of sympathy from professional poker players on these issues. These guys and gals make a living at poker and they can afford to travel and put up with all kinds of inconveniences because they have to in order to survive. But, the thousands of players who are participating in the WSOP right now as I'm writing this aside, the vast majority of poker players are regular men and women looking to have a good time and maybe make a few bucks. Making those few bucks is nice but the fun is usually more important. We play poker because we love it and we will not come back into the game unless it is easy to get in and unless we can find a place to sit our virtual behinds down quickly. Liquidity and easy access will bring us back into the game playing our $10 Sit N Go before we go to bed and enrolling in that $20 Friday night tournament with 2000 other players just to see if we can compete, always walking away with a tremendous rush!

Liquidity and easy access are good for everyone but they are essential to us regular players. We really don't need the ability to play 16 tables at once nor are we ever going to risk $1000 from our day job on a chance to make a fortune. We want to play when the spirit moves us with a table full of other gamers and that's all.

Unfortunately nothing that I see on the near horizon promises that!

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