On Wednesday, bwin.party Co-CEO Jim Ryan (pictured) was the keynote speaker at the G2E Global Gaming Expo in Las Vegas. About 200 attendees turned out for Ryan's speech, which took the form of a metaphorical game of poker and began at 3:15pm local time.If you're not familiar with bwin.party, the company is publicly traded in London and is the parent of both bwin and PartyPoker. It boasts revenues of over $1 billion per year and is the largest online casino operator in the world. bwin.party employs 3,700 people and its Co-CEO, Ryan, has been on the management of five different poker networks over the years.
Ryan showed several slides that played out a metaphorical hand of poker featuring five players: pre-UIGEA operators, post-UIGEA operators, consumers, the U.S. Government, and land-based casinos. The game, entitled "American Dream," walked attendees through the history of the online poker industry in the United States starting in 1998.
Fourteen years ago, the industry was worth $3 million per year and featured operators like Planet Poker. Other sites like Paradise Poker and PokerSpot, the latter of which was the first to introduce MTTs, popped up and helped expand the market. Ryan said of Planet Poker, "As soon as it launched, consumers questioned the validity of the RNG." Planet Poker's solution was to publish the RNG source code for all to see.Ryan summarized, "From the very beginning, consumers wondered if they were getting a fair game." Meanwhile, PokerSpot was plagued with capitalization issues, stability woes, and difficulties getting money off the site. Ryan argued that the trio of problems represented "clear evidence this sector should have been regulated from the get-go."
In 2001, the U.S. internet gambling market weighed in at $25 million, which Ryan noted was a "pretty decent growth rate for a couple of years." Beginning in 2002, "extreme growth" occurred, with catalysts that included affiliate marketing, poker player endorsers, tournaments like the PartyPoker Million, online WSOP satellites, poker on television, and Chris Moneymaker's win in the 2003 WSOP Main Event. Ryan dubbed the latter the "definitive spark… Poker became the new golf."
In 2005, the growth of the online gaming space was manifested when PartyPoker went public. Its market capitalization grew to $12 billion, making the company larger than British Airways.
Then, the bottom dropped out. In 2006 at the urging of then-Senate Majority Leader Bill Frist (R-TN, pictured), the UIGEA was tacked onto an unrelated piece of port security legislation and driven through in the final moments of the Congressional session. Ryan explained the industry's mindset: "The online poker operators – we've convinced ourselves [U.S. regulators care] about sports betting."In 2006, Ryan, then with UB software developer Excapsa, was in Aruba when the UIGEA passed, missing his son's birth and his wedding anniversary in the process. He revealed that he was on the very cusp of selling Excapsa to Party Gaming in a nine-figure deal, but the UIGEA derailed that.
The UIGEA, sports book-related arrests, cheating scandals at UB and Absolute Poker, and Black Friday were all tantamount to signs that "the U.S. unregulated poker market was coming to an end," according to Ryan. "If you're a U.S. online gaming operator, you shutter [on Fridays] and hope your day goes well." Ryan also saluted PokerStars for its salvation of the Full Tilt debacle.
Ryan concluded his history of the online poker market in the United States by saying, "I believe [regulation] will happen… Despite the laws in the U.S. and law enforcement in the U.S., the U.S. is still one of the largest online gaming markets in the world." In 2011, it was worth $2.5 billion, or nearly 1,000 times its value in 1998.
