Held in recent days were the London Affiliate Conference and ICE, which brought together members of the internet gambling and online poker industries. Many of the online poker sites that PocketFives works with were in attendance, as was PokerTracker’s Steven McLoughlin, who gave us his takeaways from this major industry event. McLoughlin broke down the sale of Full Tilt Poker, talked about the future of PokerTracker, and forecasted legislation in the United States, among other topics.
PocketFives: Give us your top takeawaysfrom the London Affiliate Conference and ICE.
Steven McLoughlin: Number one would be how much the industry has matured now that the U.S. market is no longer available. Just a year ago, you’d still hear people working at various companies complaining about PokerStars and Full Tilt, saying that they had an unfair advantage because they served the U.S. market.
The common misconception in the industry was that the reason Stars and Tilt were big was because of their access to the U.S. market. This is partly true, but what was often ignored was that these two sites were simply doing something innovative and different from everyone else – and players liked the innovation provided by Stars and Tilt. That is the real reason why they were the biggest.
This appears to have been a wakeup call for the online poker industry. What we’ve seen now is a return to customer service ethics and product innovation – finding ways to make the gaming experience better for customers and improving service by providing more transparency. The network that has impressed me the most on this front is 888. Their product today is night and day from what they had last year. They have not alienated the hardcore players; at the same time, they’ve embraced the recreational players in new ways that make both market segments happy. They have done a phenomenal job.
Another takeaway from London was what’s happening the U.S. The discussion is now focused on who would or would not be able to apply for a license, what types of licenses will be available in Nevada, and what other states might be pursuing online gaming. Much of the industry appears to have moved away from the one-nation solution; instead, they are embracing a state-by-state solution.
As I see it, the poker industry generally realizes that everyone wants a Federal solution, but the industry has accepted that it’s likely going to proceed state-by-state. That was fascinating to see and it is a radical change of perception.
I’m going to predict that a lot of the big poker companies we know now won’t be operating in Nevada. I can only discuss Nevada right now because it is the only state that is virtually guaranteed to proceed with online gaming, with the first licenses to be assigned in the coming months.
My prediction is that the future will center on the big, existing gaming providers in Nevada like ShuffleMasterand IGT. They will be guiding the industry going forward. Without going into specific deals, there are numerous existing online networks that are in the middle of negotiating with Nevada-based gaming manufacturers to be bought or licensed out.
PocketFives: We’ve had multiple PocketFives members ask if they can expect to see PokerStars service the U.S. market in the future. What do you think?
Steven McLoughlin: I think there is almost no chance of that now. The future is a state-by-state solution and PokerStars hasn’t made amends with the DOJ yet on a Federal level. Even when that does occur, it will not guarantee a safe path for Stars at the state level. We haven’t seen the end of PokerStars’ legal concerns in the USA; that’s all still to come.
The U.S.-based companies that will be licensed in Nevada have the incentive to block foreign companies from coming in. Each state will consider its own issues, its own laws, and its own reading on Federal law, making entry for Stars a very complicated matter.
PocketFives: Are you writing off the prospects of a Federal bill?
Steven McLoughlin: Everyone I spoke with has low hopes for it. Everyone wants a Federal solution, but nobody is banking on it anymore. What the industry is hoping for is a Federal compact solution will be created between states. A compact is an agreement between two states; this is how other interstate gambling is managed such as multi-state lotteries and horseracing. Like it or not, I think compacts will be the future of online poker in the USA.
In order for states to work together as a team under a compact, they’d need similar gaming laws. It could take many years for the whole system to develop, but we’re beginning to see movement for the most part. In the meantime, I am advising online poker players to consider relocating to Nevada or New Jersey in order to keep playing in the U.S. It is likely that these two states will be operational within the year.
Steven McLoughlin: I didn’t hear anything new about Full Tilt player funds or the GBT deal. The only conversation I had was about the acquisition of Full Tilt’s intellectual property. Apparently, there were companies that looked at acquiring the IP for Tilt, but passed. Additionally, there were other companies that thought the assets were toxic and could not be bought for use in the USA.
By the way, the International Stadiums Poker Tour, which Group Bernard Tapie runs, had a giant booth in London. Allegedly, you’ll start qualifying for it online and then you’ll go to the main floor of Wembley Stadium and play, which is interesting. It would explain why Tapie is interested in acquiring an online poker site.
Steven McLoughlin: The majority of our business is non-U.S. right now. In the U.S., we’d continue to support sites and networks in each state as they come online as long as we see it as profitable. We’re going to have to analyze every state and network and take it one by one. It’s going to create some problems for us as a company because it’ll create far more rooms for us to support. With that said, balkanization is already happening in Europe, and we have adjusted fairly well to the country-specific networks that have popped up.
We’re already in conversations with who we believe will be the bigger players in Nevada to make sure they understand the PokerTracker business model and how we help attract more players who play on more tables and rake more. Those conversations have gone well so far. Every company we have spoken with understands the benefits their business will gain from allowing personal tracking and they have all followed and learned from the bigger European poker rooms like PokerStars that embrace PokerTracker users.