Six Poker Industry Thoughts Six Months After Black Friday

One thing that hasn't changed six months after Black Friday? Candice Swanepoel being to lingerie shoots what Lil' Wayne is to rap songs.

Today marks the sixth month anniversary since The Events of 4/15TM. We’re going to expand on this further when we launch Wicked Chops Insider this coming week, but half-a-year after the DoJ crackdown, here our Six Things We Believe post-Black Friday.

1. It’s going to be awhile before there’s online poker again in the U.S. Yes, there are some positive signs that online poker is on the Congressional radar (read about the Barton-Frank alliance here). But there are plenty of signals  indicating it will still be some time before anything happens on the legislative front. As a general rule, we plan for the worst, and hope for the best. The general industry consensus is that if nothing is passed by the end of this year or first quarter of 2012, we could be in for a long, loooong wait. We still believe the most likely scenario is online poker legislation gets pushed through during the lame-duck month after the 2012 elections/mid-term (it may be Senator Harry Reid‘s last chance to do it–and he owes the Nevada brick & mortars for his last re-election). If that’s the case, we’re still looking at sometime around 2014 or 2015, in all likelihood, before anyone is playing regulated online poker in the U.S.

2. Nobody is buying Full Tilt Poker. We’ve stated it before and we’ll state it again: we want a qualified buyer to purchase Full Tilt Poker and honor worldwide player accounts. We do not want Full Tilt to fold. However (and we’ll expand on this more in an Insider column we’re working on), it just doesn’t make financial sense for anyone to acquire the company. The total nut owed to players and the DoJ is too massive, and it would take too long for a purchaser to realize a return on that investment. So unless some creative financing/penalty payments are negotiated, Full Tilt Poker will not be sold.

3. Things will get worse for the Full Tilt Board of Directors. No need to kick someone when they’re already down, so we’ll keep this simple: with little chance of finding a buyer who will pay the DoJ and U.S. players, expect things to get much worse for the Full Tilt Board of Directors.

4. Poker on TV is going to look a lot like 2004 again. THE major reason for the boom of poker programming on TV was that all of the shows were either time-buys from the online sites, or were specifically designed to capture online poker advertising dollars. We broke that NBC has pulled its National Heads-Up Poker Championship. We’ve since heard that despite strong international numbers, PokerStars will not be producing The Big Game again. Poker After Dark is obviously done. The WSOP Circuit has yet to find a broadcast home. We don’t see Epic Poker possibly surviving past Season 2 (if that). All that leaves us with is the WSOP on ESPN, the WPT on Fox Sports, and the Heartland Poker Tour. So much for over-saturation.

5. Nobody knows how the industry will look in five years. We all know the industry will look different, but nobody knows just yet how it’s going to shake out. Yes, the Nevada brick & mortar casinos will likely be winners, but how will Tribal entities fare? In some cases, Indian casinos are more liquid than Nevada brick & mortars, and they may be more nimble (and aggressive) in their ability to market. Additionally, people like Venetian owner Sheldon Adelson are rumored to want all regulated casinos to operate on one platform, and the company who markets best wins the most market share. While we think that’s unlikely, you never know. And how does Zynga Poker, with its 37M monthly users, fit into all of this? We think you know the answer to that.

6. …otherwise poker is stronger than ever. While things look bleak in the U.S., the game is still strong. The 2011 WSOP set records for attendance and overall prize pool. The WPT and HPT continue to exceed registrant expecations. And the game continues to grow internationally. The European market continues to expand. And the success of casinos in Macau and Singapore are showing that Asia is primed for a boom that will dwarf anything that happened in the U.S. The poker industry is strong. It will only get stronger. Even in the U.S. It just may be awhile.


4 Responses

  1. Grant Coombs

    October 15, 2011 8:57 pm, Reply

    You guys rock and I visit your website daily but I really can’t stand this article. First of all, I am in total agreement that it doesn’t make sense to me for anyone to buy FTP, but Tapie has already signed an acquisition agreement; so your second point should be disputing why this would possibly fall through if that is your belief, not the concrete statement that the company won’t be bought. Secondly, you state that you don’t want to kick someone when they are down. but the overall tone of this article suggests to me that you are fine kicking the grinders of FTP down when we are out a ton of money and our futures and livelihoods are in danger. If there is ever someone to kick when they are down, then I think the owners of Full Tilt qualify nicely for this category.

    As an aside, I think I should mention that I have been overall very disappointed with your coverage of the Full Tilt saga post Black Friday. When the UB cheating scandal broke, you were at the front of the line trying to find out information, placing blame, and rallying for the players. In this case I believe with FTP you have far closer relationships with the owners/team full tilt members and this has taken away from the bulldog coverage you displayed against UB.

  2. Earl Burton

    October 17, 2011 7:27 am, Reply

    Very good piece, gentlemen. I thought I was the only pessimist in the poker world (although I would call it being a “realist”).

    On each point:

    1) I agree with you, but I am looking much longer. Nothing will get done this year (the hopes of the supercommittee doing something, with six GOP and six Dems, is unlikely; hell, they will have trouble deciding what to have for lunch) and, with the 2012 presidential elections, no one is going to stick their neck out on this issue with all the bad press. If the GOP assumes control of Congress and/or the presidency, the online poker issue won’t even be heard. If the Dems regain control of Congress/keep the presidency, they will have other issues to grind out before poker is thought of. I’m looking in the five to ten year realm, as outrageous as that sounds.

    2) Another great point. When you look at the factor it could take $750 million just to dig out from the previous regime’s mismanagement, don’t think any buyer is going to want to put that much out without a guaranteed return (and a return to U. S. play).

    3) Sadly, true. Criminal charges will probably be coming down by the end of the year/early 2012 against the Board of Directors of FTP.

    4) Maybe not quite that bad. Epic Poker needs to find a sponsor (with the NHUPC gone, GoDaddy is a good idea). But we’re not going to see the glut of programming we once had.

    5) In five years, we could have nothing or it will be a casino-dominated online industry, with a massive tax and rake that will prevent players from being able to make a living from playing online.There will also probably be prohibitions on multi-tabling (where players can make a good ROI), and a cap on deposits preventing players from having a large online bankroll. It will become a recreational industry rather than one that people could live off of. The way in, however, would be for the Indian gaming operations to open up something on their tribal lands; that works around some of the prohibitions.

    6) Thankfully, yes, the live tournament poker world is thriving. It should continue to do so, unless other countries outside of the U. S. put in laws like France that nationalize the operations. If that is to happen, you would see a decline in players in tournaments.

  3. Sammy Sing

    October 18, 2011 5:50 am, Reply

    Yes, although casinos are doing extremely well in Macau and Singapore, poker is doing less so. The Macau poker scene has stabilized after shrinking a bit in the last two years, and there is no Singapore poker – the two casinos here do so well with the standard Crazy Asian Gambler games they don’t see the need to offer poker, despite the large expat community (self included) who are dying for poker here.

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