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Fighting the Online Poker Decline

Could operators and providers do more?
 
The independent online poker monitor Pokerscout.com's report for mid-August showed that across the industry, online poker traffic dropped  1.1 percent, with nine of the top ten tracked sites all booking a loss for the week.
 
Considered in the context of a growing number of corporate financial reports illustrating an apparent decline in online poker revenues, the stats triggered some interesting and erudite op-ed pieces at Inside Poker Business and Pokerscout, all well worth reading.
 
Pokerscout noted that a global slowdown appears to be gripping the internet poker market, with traffic overall this year declining by 4 percent over the same period last year.  It points out that various reasons have been postulated for this slump, including the depressed world economy, market saturation and even the end of the lucrative and long-running poker popularity boom.
 
The malaise appears to be impacting even Pokerstars and its rival Full Tilt, although the two sites, which have continued to service the vast US market despite processing problems, still command a 60 percent share of the overall market. Pokerscout notes that the combined traffic of the two giants is declining, with Full Tilt showing an annual decrease of 8 percent, whilst PokerStars maintains a small positive annual growth rate.
 
The elephant in the room is clearly the future of the US market and its massive potential if freed from the bonds of legal uncertainty. A market where players are free to play without financial and other disruptions to their entertainment on well regulated and safe sites would be a serious market-booster for the industry, and for those sites that achieve regulated status.
 
Mid-August numbers from Pokerscout show that the top four ranked sites, headed by Pokerstars and Full Tilt, kept their positions for the seventh consecutive week.
 
Notable movers over the week were flagged as PokerStars.fr, a French market dedicated operation which edged out GTechG2's IPN to take eighth place. Everest Poker moved up two spots to 12th, jumping over People's Network and Svenska Spel. Sky Poker slid down two notches, losing ground to win2day and FullTiltPoker.fr, another dedicated French site.
 
Inside Poker Business also examined the apparent decline at http://www.insidepokerbusiness.co.uk/poker/analysis/343/reasons-and-excuses.html, noting that revenues have declined at Party Poker, Ladbrokes, Unibet, Bwin (excluding Gioco Digitale) and 888 this year when compared with 2009 numbers.
 
In a well-informed piece, the publication considers the probable causes, and the main reason put forward by corporate execs - the 'competitive environment'.
 
"If you believe everything you read then operators around the world seemingly only have one major problem at the present time, and that is PokerStars," it observes, going on to accept that the US-inspired player liquidity and huge marketing budgets of Full Tilt and PokerStars undoubtedly have a significant impact on competitiveness.
 
However, it poses the question of what other factors may have been contributors to the present situation, such as the rakeback wars, a major cutback in brand advertising by corporates, a reliance on affiliate marketing and online acquisitions and a loss of focus on poker by some sports betting focused operators.
 
"It's also notable that few sites offer a clear differentiated offering beyond PKR, either in terms of technology or brand positioning," Inside Poker Business remarks. "When PartyPoker did a major software overhaul its final product bore more than a passing resemblance to PokerStars. And while there are some fantastic brands, such as PartyPoker, in the poker sector, the marketing has shifted more to pricing, bonuses and promotions than brand positioning."
 
The frustration of operators who have opted not to risk the US market is understandable in this industry-wide problem, but Dominik Kofert, chief executive of Pokerstrategy.com, has asked whether operators are doing enough to offset the US problem, pointing to a lack of innovation in the poker market both in software and in brand building.
 
"Operators have failed to turn their products into experiences for their customer," says Kofert. "The fact everyone always says it's unfair they are taking US players is all true, but that doesn't mean they did the best they could. I'm not saying they can overtake PokerStars and Full Tilt, but there is no reason for resignation or passivity."
 
Inside Poker Business concludes with the observation: "But what is less obvious is what the firms are doing in response to this problem, beyond focusing on new players to fill the gap left by customers who have tired of a commoditised online poker experience."



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