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Monday, November 5, 2012

Online Poker: The Impending Perfect Storm

Recent events and announcements surrounding Internet poker give you the feeling that a perfect storm is brewing in the online poker space. It is not just one or two announcements and initiatives but a series of them, when combined, could result in a perfect storm for Internet poker businesses and players.
US State and Federal initiatives to legalize online "real" money poker is very old news and acts as a backdrop to many new emerging poker trends that are being fueled by the US government intention to legalize real money Internet poker.  The hope of legalizing online real money poker in the US is significant.  It is obvious that a US Federal or State(s) bill allowing poker to be player across the US would certainly re-energize the online poker industry. However, there are also a number of other announcements leading us to believe that the prospects for poker are even more encouraging and perhaps much bigger then just the US opening up of online poker gambling to US residence. Combining these new new elements with the prospect of legal "real" money US poker gambling certainly does feel like a perfect storm brewing.  

European Union Allowing Intra-Country Poker Liquidity - The European Union and some of the member countries are starting to realize that the country by country licencing of Internet gambling in Europe may, in fact,  not be the best way to legalize  and control Internet gambling in Europe.      

The essential problem with the current EU approach is that it is destroying any Internet gambling game that requires "liquidity" to maximize its popularity. Obviously, poker is highly dependent on large amounts of players participating to keep the poker ecology healthy including enough "fish" for the "sharks" to exploit without depleting the amount of fish to the point where there is no ecology. Also, poker players, fish and sharks alike, want to have as many game and tournament options as possible to engage in multi-table play and to have the opportunity to actually meet and play with new players. Yes, poker is a very social game and the current European approach to Internet gambling is undermining poker.

The current move by Spain, France and Portugal  to consider combining forces to create a larger pool of poker players is a cleaver and wise move on the part of these countries to once again create a large European poker player liquidity pool. The European government entities are beginning to understand how poker works and are wisely considering a more broad based European plan for poker.

The European's are realizing that country by country closed Internet gambling markets are bad for poker. US regulators have been watching Europe's gambling regulatory strategy anticipating that they to will be regulating the industry. If Europe opens up poker liquidity so will the US when poker gambling becomes legal in the US.

Bwin/Party Poker Zynga Partnership - The other notable announcement is the Bwin/Party Poker and Zynga announcement designed to  combine Zynga's large social poker community with Bwin's Europe "real" gambling community.  The first step in this relationship is relatively insignificant with a focus on the UK exclusively. Apparently, Bwin is somehow going to enable Zynga's UK current social poker players to play poker for "real" money in the UK .I suspect this will also extend to Spain, France and Italy at some point.

The importance of this in the long run is much more significant depending on how the Bwin/Zynga relationship evolves. Zynga has been selling leads to the European gambling operators for years with little success of converting their social gaming leads to paying gamblers.  This new relationship with Bwin will begin to result in a more precise way of "profiling" social poker players that will in fact cross over to gambling. If Bwin is really smart they will also allow their gambling community to play in Zynga's  social poker room. We already see pro poker players playing in Zynga. If Zynga can effectively create an eco-system where they monetize players in both environments it will be a closed system resulting in high retention of players and increased revenue per player.

Facebook Platform Supports Internet Poker Gambling - This is also old news, however, the Facebook/Gamesys deal to allow Gamesys to offer real money bingo game wagering in Facebook could have a potential big impact  on poker providing Facebook expands  gambling withing Facebook to current poker gambling game operators and they allow Zynga and other  Facebook poker operators to play real money poker within Facebook. If this happens, and there is very good chance it will, the numbers would be staggering with potentially millions of people concurrently playing real money  poker within Facebook. 

US legalization Of Internet Poker Gambling -  There is much speculation about this subject. With no one really knowing for sure how and or when US Internet gambling will become legal. However, if it does, or if California only  becomes a market where Internet poker gambling is allowed, it will certainly tip the scales into the perfect storm scenario combining US players, European liquidity and real money poker acumen with Zynga/Facebook social poker player volumes. Clearly the US is the home of poker and poker market size will far exceed  Europe's.  The Zynga experience has taught us that even in the absence of any real money poker in the US the game is still extremely popular.

Internet Poker gambling was certainly very big and successful before 2006 and the emergence of Zynga social poker and the development of the European poker market.  Looking forward the new Internet Poker market could be substantially larger. The added fuel provided by the  increased size of the US population, the addition of the current regulated combined European poker audience,  the success of mobile devices as an easy way to access poker, Zynga's population of poker players, the potential viral impact of  Facebook's world market reach and the legalization of US Internet real gambling poker could result in a very interesting poker economy.

  Kevin Flood is the CEO of Gameinlane, Inc. Kevin writes  about online games and their impact and integration into iGaming and E-commerce environments. Kevin is a frequent speaker at online game events and conferences in Asia, Europe and the US. Kevin and his Gameinlane team are currently working with online gambling, social gaming and e-commerce companies integrating social gaming with online gaming operations and integrate game mechanics into e-commerce applications. 

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