Flush with success: how long can online poker enjoy a winning streak?

The mercury was nudging a balmy 20°C in the UK at 8pm on Saturday 25 April as Britons decamped to their gardens and outdoor spaces amid the enforced lockdown. And yet, more than 200 individuals were settling in for the fourth instalment of a private game on PokerStars organised by Nick Goff, former head of football trading at Coral and a professional gambler who has been left with precious little to bet on since the global pandemic obliterated the sporting calendar. Advertising the £11 buy-in and passcode to gain access to the PokerStars club to his 12,000 Twitter followers, the weekly game has proved a resounding hit, despite the fact PokerStars’ ‘Home Games’ are – somewhat inexplicably – unavailable on mobile.

“I guessed there would be a reasonable demand given we’re all on lockdown, and my followers mostly have an interest in betting and gaming, so I hoped to get 100 to 150 [players],” Goff reveals. “However, the first week was 344, which was amazing, and by the second week the club had hit Stars’ limit of 500 players, so I was having to remove some to let new ones in until they upped the limit [to 750 players].”

It seems the chance to play poker with friends during the lockdown has struck a chord with many. For PokerStars, its Home Games feature, first introduced in January 2011, has never been so busy, especially during a time of the year when traffic naturally starts to fall away as the nights become lighter in the northern hemisphere. In fact, more than 310,000 private clubs have been created on the site since the start of March.

Internal data reveals the average tournament buy-in is $5.50, while anecdotal evidence from social media posts shows many players are also firing up the seemingly ubiquitous video conferencing app Zoom to add an extra layer of realism. “Home Games have certainly taken off worldwide at PokerStars recently as players turn to them for a socially engaging source of entertainment,” says Rebecca McAdam, associate director for group public relations at The Stars Group (TSG).

For veteran poker PR guru and consultant Warren Lush, it’s no surprise private games have exploded. “You only have to look at the sudden success of the Zoom and Houseparty apps during the lockdowns to see why home games are more popular in the circumstances. I think this is a great opportunity for Stars and others in the industry.”

Monetary gains

According to Google Trends, search terms for ‘online poker’ and ‘poker with friends’ soared globally from around the middle of March to early April (see graph below) as some cooped up in their homes turned to a social online game to help pass the time.

This boost in interest is reflected in revenue, too. We were afforded a glimpse behind the curtain to see how lockdowns impacted revenue for PokerStars’ parent company, TSG, with the company recently reporting record revenue of $735m in Q1 2020. This equated to a 27% increase on the $580m generated in the first three months of 2019. For reference, poker accounted for 34% ($871m) of TSG’s $2.52bn revenue in 2019.

The Toronto-listed online giant also revealed in its trading update that increased gaming activity and reactivation of poker players led to year-on-year growth in international revenue (outside the UK, Australia and the US) of around 44% for the month of March alone. This momentum continued into April as revenue for the international segment surged 75% year-on-year in the first two weeks of the month. “We are seeing a mix of our current players, brand-new players and returning players, and we are seeing them play across a broad range of our products,” McAdam explains.

Meanwhile, Kindred Group’s Unibet Poker also enjoyed a bump in Q1, with gross revenue climbing 29% quarter-on-quarter and 31.5% year-on-year to hit a record high of £7.5m. Although poker accounted for a negligible 2% of Kindred Group’s overall revenue over the past three quarters, the product’s share increased to 3% in Q1 and is likely to rise further in percentage points in Q2 as its sports-starved customers and lapsed players turn to Unibet’s poker offering.

Over at 888, despite poker revenue falling 13% year-on-year in 2019 to $42.7m, revenue was up 7% in the second half of the year. “We saw strong momentum in the poker business in H2 2019, which continued in Q1 2020 even before Covid-19 started, so we are happy to see that this trend continues,” Guy Cohen, SVP of B2C at the London-listed operator tells EGR Intel. In fact, 888 is acquiring hordes of new players organically through 888poker, many driven by a compulsion to play with friends. “Private games have definitely gained significant popularity in recent weeks and we have seen that the recreational players who join us, the first game they play is a private game.”

Interestingly, 888poker introduced its own version of Zoom-like ‘PokerCams’, allowing players to see and talk with their opponents, at its private tables back in 2011. While this feature has since been retired, the operator is planning to add a slew of unspecified features to its new Poker8 platform (currently being rolled out to various markets) alongside improved personalisation and real-time CRM, similar to that deployed for 888casino. An overhaul to the mobile product is coming later this year.

So, could poker’s share of group revenue at 888, which was 8% in 2019, increase significantly in 2020, especially with sportsbook (16% in 2019) taking an inevitable hit this year due to the lack of action? Cohen responds: “Casino and sport are still the growth engines of the industry, so I don’t expect poker to grow at the same rate, but I do expect the good momentum we see now to continue. I do believe during the current period there is a real opportunity for poker to grow.”

Ante up

The first concrete indication of poker’s upward trajectory due to the pandemic was the 123% year-on-year increase in tournament poker revenue across the market in Italy – a market ringfenced from global player pools – during March. In addition, cash game revenue almost doubled in the same month year-on-year as the authorities there imposed lockdown measures from 9 March.

Looking more broadly at online poker globally, traffic tracking resource PokerScout and web archive Wayback Machine show the seven-day average for concurrent cash game players have almost doubled at PokerStars’ dotcom site from 7,600 in early May 2019 to 14,500 roughly 12 months later. Meanwhile, the seven-day average for concurrent players at GGPoker’s cash tables have nearly trebled from 1,150 a year ago to 3,000 today.

Similarly, partypoker’s international cash game numbers have leapt from 1,100 to 2,700. On top of this, of course, there are all the customers playing tournaments, lottery-style sit ‘n’ go’s and fast-fold variants, contributing to perhaps the vertical’s sharpest growth spurt ever. On the evening of Sunday 26 April, PokerStars’ desktop client was showing around 320,000 players online. Over at partypoker, more than 43,000 were logged in. “We have seen a big increase in player numbers and the daily player counts are the highest we have seen for a long, long time,” says Tom Waters, head of poker at GVC-owned partypoker. “It’s really refreshing to see; the site is busy, there is lots of action and the games are fun.”

The increased traffic means many leading poker sites have extended tournament series and upped guarantees to take advantage of the situation. For instance, PokerStars’ headline weekly tournament, the Sunday Million, has been running of late with a boosted guaranteed prize pool of $3m and been extended to a two-day affair to cope with the unusually high player numbers. Furthermore, PokerStars has announced its annual Spring Championship of Online Poker (SCOOP) now includes record-breaking guarantees totalling $95m.

Going live… or not

As casinos have shuttered across the world, live poker is effectively mothballed for the foreseeable future. The Venetian in Las Vegas did try to soldier on with a maximum of three poker players per table in an ill-judged and futile attempt to adhere to social distancing rules, yet the backlash on social media helped force a rapid U-turn and the subsequent closure of the poker room. As for the peripatetic live poker tours, which have been thriving in recent years, the logical step has been to switch these land-based events to the virtual tables. This, too, has given online poker a further boost.

In April, the Irish Poker Open, an event steeped in history and running annually since 1980, transferred its tournaments from a Dublin hotel to the site of headline sponsor, partypoker, albeit with adjusted tournament structures to suit online play. The €1,100 buy-in Main Event exceeded all expectations, attracting 2,945 entries and thereby tripling the €1,100 guaranteed prize pool to almost €3m. Brazilian Pablo Brito Silva scooped the top prize of €462,100.

“It was a learning curve for us as it was the first time we have brought a live event of that scale online,” says Waters. “The numbers and the support from the players were phenomenal really. We had so much traffic and the satellite volumes were enormous. The Irish Open was a roaring success for us.”

Partypoker also partnered with online poker channel Poker Central to move the Poker Masters online. This encompassed 30 high-roller events with the least expensive buy-in starting at $10,300. The highlight, the $51,000 buy-in Main Event contested by 77 participants, easily surpassed its $2m guarantee, prompting partypoker’s Rob Yong to tweet that five years ago, before GVC’s acquisition of bwin.party, the biggest tournament buy-in on the site was a $55 re-buy.

Waters says: “Live poker has a lot of dedicated players who travel across the globe. Now these guys have obviously got nowhere to go, so most of them have moved online in order to continue to earn a living as professionals instead of earning from the live circuit. That’s definitely given us a spike in online traffic.”

Unibet was the first major operator to switch an event online after management announced that May’s Unibet Open Tallinn would no longer go ahead as planned in Estonia’s capital. Since then, Unibet, which is currently putting the finishing touches to a product revamp due to surface in Q2, has transitioned all of its live events in 2020 online.

Kristoffer Bergvall, head of poker at Kindred Group, says: “Moving a live event online presents some challenges but also opportunities; we are going to play our highest buy-in and guaranteed tournament on Unibet since we launched our bespoke poker product in 2014. And we are adjusting tournament guarantees and adding additional tournaments to the schedule to meet the demand.”

For poker aficionados, particularly the game’s mavens, the big one every summer is the World Series of Poker (WSOP) at Caesars-owned Rio Hotel and Casino in Las Vegas. Last year’s WSOP attracted over 187,000 players from 118 countries. However, the inevitable was finally confirmed in April with the news that the seven-week-long series was to be postponed until sometime in the autumn at the earliest. 888-powered WSOP.com was already set to run 14 online bracelet events for players physically located in Nevada and New Jersey, yet organisers could offer a separate online schedule this summer for players outside the US.

GGPoker is already running a WSOP Super Circuit Online Series in May with an eye-popping $100m in guarantees across 595 events. The tie-up with the WSOP and an online series of this scale is certainly a feather in GGPoker’s cap.

‘Milking the cow’

As poker sites sign up new players, reactivate existing ones and see active users up their play, they obviously need to be especially cognisant of responsible gambling (RG), especially as people could be isolated and easily end up gambling excessively. After all, we’ve seen governments and regulators across Europe intervene, some ham-fistedly, during the Covid-19 outbreak. For example, Spain has imposed controls on advertising, Latvia has banned online gambling during the crisis and Portugal is mulling an online casino ban, while Sweden has introduced strict limits on deposits and sign-up bonuses.

“There will be pressure on poker, online casino and games to fill the gap in revenue [left by sports] but operators have to strike a fine balance with social responsibility,” Lush warns.

Waters insists the industry should resist the temptation to wring every last drop out of this unique opportunity and instead act responsibly with a sustainable proposition for players.

“Some operators, and I’m not just talking poker operators, are clearly milking the cow and are pushing very hard. My opinion is that it’s not the right way to go about this – if you want to be sustainable, it has to be a sustainable product offering for the players. So, you could chuck out tournaments every 15 minutes, 24 hours a day and pump the guarantees, but there’s only so many that players can play, and there’s only so long that they can last.”

How long they last and how long this mini-boom goes on for are up for debate. The surge in traffic is already showing signs of plateauing and slightly falling away. As are key online search terms. The drop off will in all likelihood accelerate as countries start to ease lockdown restrictions and the public gradually emerge from their homes.

At 888, where 18% of its B2C FTDs were acquired in 2019 through 888poker, Cohen remains bullish, though. “When people are able to meet each other more following the easing of state lockdowns, the current trend will go down. However, we hope to be in a much, much better situation in terms of poker performance after Covid-19 versus before Covid-19.” He adds: “There are many poker enthusiasts around the world, and we know that the love of the game never disappears.”

There is a distinct possibility that live poker players will switch a greater proportion of their overall poker play from land-based casinos and live tour events to the online sphere, in the near-to-medium term at least. It seems inconceivable that people will anytime soon willingly sit in close proximity to strangers at a poker table and handle potentially germ-ridden cards and chips. Therefore, this migration to online will particularly benefit the leading sites already successfully running live events and festivals online. “The longer there is no live events, the stronger online numbers will be,” Lush suggests.

In addition, recreational players may well continue to play with their friends in private games – a function of some poker sites that never really took off until the lockdowns – although PokerStars is missing a trick by not having Home Games currently available to mobile users. Private game functionality at partypoker was shelved two years ago, but a similar function is now back on the product roadmap and due to be released very soon.

Lush says: “I do think operators have missed a trick to push harder with home games, but I know from personal experience that there is always a big product update list and it is down to the believers to make their case and get them nearer the top of the list. For any site now with their increased traffic, the priority has to be the main core product.”

Phoenix rising?

Back in May 2013, the cover of EGR Intel featured the stark headline: poker’s fall from grace. So-called Black Friday, segregation of player pools and diminishing interest in the game had by that point taken their toll. Indeed, the previous decade was quite a reversal of fortunes for a vertical that had been the darling of the industry 10 to 15 years ago.

During the apex of the poker boom in the mid-to-late 2000s, this old cowboy card game, but more specifically the variant Texas hold’em, was very much the game du jour, infiltrating popular culture along the way while performing as a tremendous acquisition tool for most operators.

So, to see online poker undergo a revival, even if it may well turn out to be ephemeral, after flatlining for years, has been a surprising by-product of the global pandemic and restrictions on people’s movements. “Is this an online poker renaissance we have not seen since pre-Black Friday?” Lush asks.

“You have to say maybe, but renaissance could be too strong a word. If the US were to suddenly legalise online poker across all states where players can play each other around the world, that would be the real renaissance,” he adds.

“I’m not sure how long this mini-poker boom will last,” partypoker’s Waters concedes. “I’m hoping it lasts forever but, in reality, once the world goes back to a relative sense of normality, if that can ever happen, we will see a slight drop off in traffic. Some of the pros will go back to playing live and people will go back to work and will have less free time. I’m hopeful that some guys stick, and that poker can see a bit of growth because it’s been a long time. The growth numbers that we’ve seen over the last few weeks have been unbelievable.”

All this increased traffic hasn’t persuaded Microgaming to have a change of heart on closing its poker network, MPN, though. Home to ‘skins’ from the likes of Betsson, Grosvenor Poker and 32Red, MPN has been a firm fixture of online poker since 2003, yet Microgaming’s poker chief, Alex Scott, confirmed to EGR Intel that Microgaming still fully intends to pull the plug on 19 May. That’ll be that for MPN.

As for Goff, he’s still organising Saturday night online games and encouraging his Twitter followers to get involved, despite his wife having just given birth to their second child. “I’ll probably keep it going every Saturday night until any real sport returns to entertain us again.”