Social Gaming to Fill Poker Void
On Friday April 15, the United States Department of Justice (DOJ) indicted 11 people on charges of fraud and money laundering. Among those arrested were principles of poker site giants PokerStars (PS), Absolute Poker, and Full Tilt Poker (FTP). The DOJ seized URLs and froze at least 75 bank accounts in connection with the charges. The poker and online gambling world are going to take a large hit from these shutdowns. These poker sites did approximately 25-40% of their business in the U.S; and continued operating even after the 2007 case against Neteller (beginning of building the current DOJ case). PS and FTP are top sponsors of poker events, TV and radio shows, and the actual players. Loss of revenue means loss of advertising budgets and less exposure worldwide.
Many professional players are expected to move out of the country because most of their contracts with these sites pay them on a per hand played basis. Take Aze Gallo for example; a 25 year old pro from Florida who said, “Honestly, I’m mostly thinking about it because of being disgusted about living in a country that would ban online poker. I’d rather play poker abroad than do something else in this country at this point. I feel like my country is trying to make money in the guise of holding my hand.” Keep in mind that players living outside of the U.S. are not restricted and can still play cash games on these sites.
Industry experts and players alike believe that this more of a political decision than a legal decision. With PokerStars and Full Tilt Poker moving their operations overseas, the U.S. poker/ online gambling industry has opened a large void.
The new social gaming offerings from digital entertainment leader’s bwin.party and Zynga could conceivably fill this gap. Experts forecast these online gaming companies will team up with land based casinos and build a new online poker environment. Although the potential gaming offerings could be good as a whole, losing these huge industry leaders will definitely impact the bottom line of the game, losing a significant amount of the $16 billion in annual wagers. The poker world grew with its ability to reach players from all over the world, now they just hope to survive this debacle.
What do you think about government policies as they relate to the internet and gambling? Why can these sites operate everywhere else but inside the United States?