11/14/09 – Interesting reading this week included a piece in Marketing Week which suggested that the online poker market has reached its peak and may be about to decline.
 
The article quotes a Mintel research report that the sector has stagnated with gross gaming yield valued at GBP 265 million last year. What’s more, this year the market is expected to decline by 7 percent to GBP 247 million.

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The downturn follows impressive growth of 72 percent between 2004 and 2007.
 
Mintel’s study found that almost a third of players have changed their poker habits as a result of the impact of the recession – playing the game less often or for smaller stakes. Average spend per year has fallen by almost 20 percent in the past two years, down from GBP 345 in 2007 to GBP 281 in 2009.
 
Recent public company results appear to support this suggestion.
 
Matt King, senior leisure analyst at Mintel, says: “Poker revenues have clearly peaked. The recession is the most obvious culprit, with around a third of poker players now playing less often or for lower stakes because of the economic downturn.
 
"However, there may be other inherent problems that the industry has to address.”
 
Among these, Kings points to rakeback promotions, which he claims are minimising margins and “showing the emphasis is on customer numbers, not the profit generated per customer.”
 
Mintel notes that the online poker sector does have a loyal following, with over half of pokerheads playing once a week or more, while around a third of online players play once a week or more. It also points out that whilst the recession has impacted online poker, its effects have been much less than for the live game played in commercial venues like casinos, clubs and pubs.
 
Player boredom has played a part in the decline in live poker, suggesting that site refreshment is needed as well as more innovation, the study notes. By contrast, a real strength of the online poker sector is the diversity of sites available, which allows players motivated by various forces to find a site or room that appeals to them.