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Not So Black Friday For US Poker
Following on from Black Friday US poker players will be relieved to know the DOJ has insisted the indicted sites will be able to payout their US players.
Now the issue of players funds has been resolved, we can look at the longer term effects of the biggest two sites having to pull out of the US market.
As a result of Black Friday some predicted widespread panic and that players would never see their funds again – They were wrong as US players WILL get their cash soon.
Others predicted a massive opportunity for the smaller poker sites still taking US players to gain alot of new players and steal a march on the big players now they had got taken down a peg or three – Well yes, no & maybe.
Non US poker sites also thought they had spotted an opportunity to capitalize on the uncertainty and get worried non US players fearful enough to move away from PokerStars and FullTilt – That hasn’t really happened at least not in vast numbers.
So a week on from the Friday 15th announcement of the DoJ seizing sites, things are not great but things are not looking quite so bad either.
Obviously that is just the start and the DoJ will be looking for some sort of settlement with the poker rooms as the fraud and laundering charges aren’t just going to go away. But its definitely progress for all involved.
There is no question this has caused big changes in the poker world and things are unlikely to ever be the same again but its not the end of the world that it seemed it might be last Friday.
Peak Daily Player Traffic after Black Friday
PokerStars traffic has dropped by around 20% or roughly 9,000 less players but is still by far the biggest site with 36,000.
Full Tilt Poker traffic has dropped by around 40% or roughly 12,000 less players taking a significant reduction to 16,000.
Cereus Traffic has dropped by more than 50% or roughly 2,000 players so are down to only 1,400 suffering the worst.
While PokerStars has been building up non US player based very effectively reducing the effects of an enforced withdrawal from the US market, the other 2 sites have suffered pretty substantial hits to their traffic and player liquidity.
Most hard hit is Cereus (Absolute / UB.com) effectively reducing them to less traffic than the small US open sites.
Which US Poker Sites Are Gaining Traffic ?
Bodog up over 30%, Carbon & Merge Network up by 40% and following up the rear Cake Network getting about 10% increase.
However this is all relative, a 40% increase on Carbon / Merge is around 600 players which is great but when you add in the 400 or so extra on Bodog thats still only 1000 players accounted for out of something like 23,000 players “lost” from the 3 indicted sites.
That is a hell of alot of “missing” US players who it seems aren’t currently playing poker online. now this is either going to represent a massive opportunity for the sites staying open to the US market or it simply shows that people have lost alot of trust since their funds had got tied up as a result of the seizure.
Only time will tell on this one – it maybe that the moment those bankrolls get unfrozen on Stars and Tilt the players will be rushing to fund new accounts on other sites – we’ll see.
Non US players moving to exclusively non US sites ?
As much as some non US sites have gained a decent % of new players relative to their own current size, its not really so impressive relative to the size of PokerStars, which is still the number one site across the world even after losing it’s US player base.
Originally when it looked like US players might not get their funds and everything was negative hype it looked like a real possibility that non US players who could still play stars, FT or Cereus might jump ship to play safe – Now things are clearer it looks far less likely that will happen in big numbers.
Why did the DoJ Back Down so Quick ?
Personally I have a feeling that the DoJ got a bit ahead of itself on a couple of issues
Player protection within the UIGEA & possibly breaking International trade laws.
There seems to be little question of the strength of their evidence that the indicted sites were allegedly involved in bank fraud and money laundering on a scale that has surprised many.
However as I predicted the DoJ very hastily had to make sure the player funds at least in principle were separated from the seizure of the poker rooms own funds. As I said in a previous post under the UIGEA it specifically bars players from prosecution or penalty for playing on or depositing at sites accepting US players.
That was a vital and significant caveat to protect players when the UIGEA came into force. Logically then the DoJ were not going to be able to withhold those funds, hence their insistence that poker sites be enabled to return them.
The second and equally significant part was the return of the poker rooms .com’s and a very explicit statement that the DoJ was not and would not try to interfere with the poker rooms non US business and that they could and should carry on with their legitimate and regulated non US business.
IMHO this is to avoid any legitimate counter claims by the WTO and or any of the poker rooms for loss of non US earnings under international trade laws. Don’t forget the whole implementation of the UIGEA is actually on pretty rocky ground from an international law POV so I think the DoJ want to stick to the strong parts of their indictment and go for a chunky settlement rather than get it all heard out in court.
What Next for Online Poker ?
My prediction is online poker will become more polarised.
Put simply we now have the 2 biggest poker sites, PokerStars and Full Tilt Poker functioning as non US poker sites joining the likes of Party Poker (who has benefited from Black Friday). Inevitably the indicted sites will agree some sort of settlement with the DoJ and they will just become the biggest 2 sites in non US markets.
This leaves the US poker market served by a handful of currently smaller but growing sites and networks – basically Bodog, Carbon Poker (Merge Gaming Network) and Cake Poker (Cake Poker Network). These sites will grow with impressive % increases in players and traffic relative to their own size but as I mentioned earlier thats not so impressive relative to the number of “homeless” players unable to play at Stars or Tilt but not rushing to join a different US open site like Bodog or Carbon.
My prediction is that Bodog and Merge Gaming Sites like Carbon will grow in strength and service the US market without problems but they will gain predominantly US only players. Those non US players from the UK, Europe and the rest of the world will have much more choice and will most likely continue to play the sites they currently play.
We will really only know just how much those remaining US facing sites will grow when PokerStars, Full Tilt and Absolute / UB players have received there cashouts. I think only then might we see decent numbers of recreational players reinvest their bankrolls into the sites still accepting US players.
Will The Remaining US Facing Poker Sites be Safe ?
At the end of the day the risks of playing other US facing sites are still the same now as before the DoJ seizure. But players really cannot kid themselves anymore that things are anything like 100% reliable for playing poker from the US.
Because PokerStars had got 70% of its revenue from non US markets (and Fulltilt around 50/50) they are in a position to refund US players and survive. With my prediction of a more polarised poker landscape that is far less likely to be the case with the remaining sites who will have a far more predominantly US player base. This means very little in terms of a safety net if they haven’t got a non US player base to need to maintain their reputation with.
If I was a US player looking for a new site to join I would feel safest playing for real money on Bodog Poker because I think they have stable finances, long established and they are an independent site not on a network.
My only other choice would be Carbon Poker as they are the strongest and biggest site on the Merge Network. For the moment I would give most of the other US facing sites a wide berth and time to prove themselves in a very different climate.
The reality is that as the smaller sites get bigger they too may run into payment processing problems that come with increased transactions to process. With the UIGEA still in force sensible US players who still want to play online would be stupid if they kept anymore of their bankroll online than really necessary.
If the DoJ hadn’t announced the establishment of some sort of structure and intent for the rooms to be able to payback US players things could have been so very different by this time, player panic could have won out and more sites might have been able to leverage the fear factor, but as things have turned out PokerStars is still a force to be reckoned with and even FullTilt has just about kept its 2nd place position.
A week on, now the dust has settled its not such a black day for US poker – It’s just going to be radically different.
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