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About Online Poker

Online poker is everywhere these days, and not just in the virtual world.

Billboards, television adverts, magazine and newspaper interviews with top players, televised celebrity poker tournaments – there’s no escaping from the fact that online poker is now, officially, HUGE.

Flotations from the bigger companies are expected sooner rather than later – PartyGaming, owner of PartyPoker have already announced their listing on the London Stock Exchange - and by the middle of July, the World Series of Poker - this year sponsored by Harrah’s - could make a millionaire out of another Ordinary Joe online gamer, just like the 2003 champion, Chris Moneymaker, who won entry to the World Series of Poker from a US$40 buy-in satellite mini-tournament.

Online poker is now a £15bn industry, with £4m being bet in Britain – the third biggest market - alone. But why is it so popular, and where does it go from here? How much bigger can it actually get? There’s no doubting that growth has been driven by the popularity of the World Poker Tour and World Series of Poker on TV. Well-made TV shows coupled with the aggressive marketing of online poker rooms are behind the current levels of popularity. But it’s a fiercely competitive community.

Some analysts believe that the growth is the result of a number of positive trends converging to produce a ‘perfect storm.’ Increased media coverage – particularly on TV – has played a major part in taking the game to a new, wider market, while also giving the game a high degree of credibility.

This, coupled with the sheer accessibility of the game online, has helped to create a virtuous circle. People watch the game on TV, become inspired and play online. Similarly, people play online and develop an appetite for televised poker, hence closing the loop.

There are other factors - most notably increasing internet penetration - particularly increasing broadband penetration - coupled with greater willingness to spend online.

PartyPoker is the current leader in online poker, holding an estimated 51 per cent market share, proving that to be successful, good marketing is pretty key. Good affiliate programmes, attractive tournaments and events will also go a long way. PartyPoker have been very aggressive in marketing, which has put them in the position they are in today. Among other things they have been very successful in using affiliates. PartyPoker is also good in making the players feel that they are met in an individual way, calling them to verify their identity and to make sure everything is working as it should.

Online businesses generally need to make the individual customer feel as if the service you provide is provided for him especially. The internet is a non-personal media which means that you need to create an even more personal touch. Online poker rooms have worked particularly hard on that. Online businesses are also reliant on a very good product or service, and in this case the user interface is more crucial for success than most people believe. The site or application needs to be intuitive and easy to use.

But poker has also undergone something of an image change. More women are playing it, more of the middle classes are playing it, and a lot of very high profile celebrities are naming it as their game of choice.

There is more to being successful than merely having a website and a poker program. Many new entrants assume that simply putting up a website on software licensed from someone else is an easy way to make money - they underestimate the importance of having a strong brand and owning your software.

Proven key components of a successful online poker room are liquidity, credibility and simplicity.

Ongoing and lasting success will probably require that a poker room does the basics well. It should offer the customer a strong brand proposition and an outstanding customer experience.

A few years ago, the online gaming industry was showing its immaturity. It’s not necessarily a given that something that worked well in the US will translate to the UK, for example.

However, land-based casinos are now starting to realise that an online offering is key in a competitive market, despite being initially slow on the uptake – and poker is at the forefront of that.

For the player, online poker rooms can serve as training sessions for aspiring tournament professionals who can qualify online for lesser amounts then play land-based tournaments. The World Series of Poker prize pool growth is a reflection of what’s happening – roughly half of all World Series of Poker participants last year were there because of online poker.

So what of the future? Flotations seem certain, and the growth certainly shows no signs of curtailing anytime soon. But all bubbles burst, don’t they? The rapid expansion and the sense of optimism within the online poker market has led to many parallels being drawn with the dot.com boom of the late nineties.

But while some of the stock market valuations seem astronomical, they’re not solely based on unrealistic future earnings projections – they’re already generating very significant revenues and profits.

While there are a number of threats to the poker market, it’s unlikely that there will be any significant problems in the foreseeable future.

To get you an idea of how many people are now playing with real-money online, visit PokerPulse.com, which monitors the top online poker rooms and tracks how many real-money poker games are running at any point in time. As you might expect, controversy has surrounded the growth of online poker. Is it gambling or is it really just a game of skill that you can bet on?

Some of the traditional credit card processors decided to discontinue use of their credit card services to fund player's online poker accounts. However, this only served to throw up a whole cottage industry that to fill the demand for transferring funds between bank accounts and online poker room accounts.

In terms of advertising, Yahoo and Google, the most popular search engines on the web consider any site that could be related to online poker rooms is considered a gambling site and advertising services are refused. This has forced the poker industry into fierce competition for poker-related search ‘namespaces’ - keywords like "Texas Hold ’em poker."

Every search engine optimisation (SEO) trick in the book has been used by desperate poker websites to try and gain visibility, page ranking and routing of visitor traffic.

Most would argue that playing poker, especially online, is like chess, where you not only must defeat the opponents and use strategy and play the odds in order to win.

You beat the odds by playing certain hands from given positions at the table, adjusting your play based upon the game situation, understanding and reading other players' styles, and by developing a strategy for winning.

What stands online poker apart from traditional casino gambling games, though, is that you're not playing against the house. The online poker room takes a ‘rake’ - a percentage of the money in play - which is how it generates revenue. It doesn't matter who wins or loses, since the poker operator always gets paid for simply hosting the game.

There is a huge number of players just using ‘play’ money – you don’t have to use real cash - and enjoy the instant messaging and interactions through the online poker room site in a social way. But there is plenty of cash play too, ranging from pocket change to seriously big money.