Online Poker Year One: The Highs and the Lows

Ultimate Poker screenshot

Ultimate Poker, which dealt the first hand of legal online poker in the US, was soon eclipsed by WSOP.com in Nevada and failed to gain traction in New Jersey.

At 9am on April 30th, 2013, the first ever fully legal, regulated and taxable hand of online poker was dealt in the United States, closely followed by the second and the third.

The site was Ultimate Poker, the state Nevada. Online poker was back in the USA, where many felt it belonged.

Ultimate Poker had won the race against its main competitor in the newly licensed online poker space.

While WSOP.com was still having its software platform rigorously tested by Nevada regulators, Ultimate Poker launched with a simpler, streamlined product which it would develop and improve as time went on, hoping that its first-into-the-market status would give it an edge.

It still faced many challenges. The software seemed basic to those who had played online poker pre-Black Friday, and to those who still played on offshore, unregulated sites.

The sign-up process was laborious in comparison to the unregulated market, due to the strict age verification processes that were a condition of licensing in Nevada.

WSOP.com Launches

Operators had to grapple with the new technology of geo-location systems, too, while, despite the online poker’s new legal status, many banks still refused to process credit and debit card transactions.

These were some of the issues that plagued operators across all three newly regulated states and may continue to do so for some time in the future. They are also reasons cited for online poker’s failure to match up to pre-regulation projections during its first year.

WSOP.com launched in Nevada in September 2013 and immediately started leveraging its brand power. It overtook Ultimate Poker the following November, driven by the media buzz surrounding the November Nine.

When hordes of poker players from across the globe descended on Las Vegas the following June for the WSOP, online poker revenue peaked in Nevada at an all-time high of $1,037,000.

Once the WSOP ended, those numbers began to decline again. While it was clear that WSOP.com could sustain itself, Ultimate Poker was falling behind, especially since it didn’t gain much from the seasonal bump from the World Series.

That left Ultimate Gaming with some tough decisions to make later in the year.

Delaware Needs Help

While figures in Nevada may have been disappointing, in general, though, they dwarfed those of Delaware, which, in November 2014, became the second state to roll out online poker.

Three racino operators won the rights to offer online poker and gaming, all sharing one player pool on a platform provided by 888.com, which also provides software for WSOP.com in Nevada.

With a population of under one million, liquidity was always going to be a problem for Delaware, and so it has proved. Figures peaked the following month, in December, when the operators collectively took over $100,000 in revenue, but it’s been downhill from there.

Player liquidity is currently so low that the platform often struggles to find enough players get a STT together.

Clearly, something had to be done, and in February 2014, Delaware signed a pact with Nevada to allow pooled online poker liquidity between the two states, effectively enabling them to share players legally across borders.

Hopefully, for Delaware’s sake, this is something that will be realized in 2013.

New Jersey Joins the Party

Meanwhile. New Jersey became the third and by far the most populous state to launch legal and regulated online poker, along with casino games, just several weeks after Delaware.

State gaming regulations required operators to partner with existing land-based licensees, and right from the start the partnership of bwin.party / Borgata took the lead.

By the beginning of 2014, it owned 45 percent of the online gaming pie, a market dominance that continues to this day.

Apart from Caesars’ WSOP.com, which holds a comfortable second spot in the market, other operators have struggled in the poker space.

Betfair’s online poker site, it was announced in June, had generated a miserable $48 in rake throughout the year, while Ultimate Gaming quit the state in September having failed to gain much traction, as its partner Trump Entertainment revealed the full extent of its financial troubles.

In November, Ultimate would also exit from the Nevada market, meaning that America’s first regulated online poker site was out of business in under two years.

But around the same time, there were positive signs for the New Jersey market. In that same month, party / Borgata announced that it was in the black for the third quarter of the year. Online poker was making a profit!

2015: A Rosier Outlook

Meanwhile, there was much speculation about whether PokerStars would enter the New Jersey market, and if so when. The Amaya takeover appeared to clear the way for the online poker giant to step in, and yet the process has stalled. PokerStars’ return to New Jersey seems inevitable in 2015, however, and many people feel it’s just what the market needs.

It could well be enough to tempt players away from the unregulated markets, and eventually lead to international pool sharing.

Furthermore, should California pass a bill to legalize next year, with language to include PokerStars in the mix, then the future of online poker in America could be bright.

Ed Scimia
Written by
Ed Scimia
Ed Scimia is a freelance writer and author from Bethel, Connecticut. He is the author of Catching Fish: Your Practical Guide To Beating $1/$2 No-Limit Texas Hold'em Games, which once spent a few hours at #1 on the Amazon Kindle bestseller list for poker books. Ed also serves as the Chess Expert for About.com. In the winter, Ed enjoys curling, which really is an Olympic sport.

Comments

herkyNiowa wrote...

I think since most states have legalized gambling casinos those casinos should be able to open up online poker sites, its just a shame that most sites online are corrupted but if you can have trusting people to always make sure that these sites were ligit and no cheating going on by the online owners then it could be a really successful business good for costumers good for the business and even good for the government, i think everyone wins

poker_coach wrote...

I hope they’ll join the US states in one and only players pool.
Then, it would be great to do the same with every regulated markets in the world.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Did you know about our poker forum?

Discuss all the latest poker news in the CardsChat forum