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Kevin Smith

Online Poker Has Arrived

31 May 2002

World Poker Tour

Any doubt as to the place of Internet poker rooms within the land-based landscape of the poker world were put to rest last week when the Party Million was included in the newly formed World Poker Tour.

Addressing Collusion

Many I-gaming operators have been slow to adopt multi-player poker for fear of collusion, but those that have been in the industry for some time know that a few simple steps can prevent any operator from getting cheated by its players.

The game of poker is experiencing unparalleled measures of popularity throughout the world, and Internet gaming operators have leveraged this growth into successful gaming Web sites.

A few weeks ago, one of England's biggest players in the gaming industry, Ladbrokes, added a multi-player poker component to its gaming site, bringing formidable head-to-head competition to the likes of Paradise Poker and Planet Poker, sites that have based their business plans solely on multi-player table poker.

Land-based poker events like the World Series of Poker and the Tournament of Champions have gained in popularity, in large part due to an increase of mainstream media coverage and the diminishing stigma associated with poker. This, coupled with an increased number of software suppliers that already offer multi-player poker solutions (or plan to introduce such an option soon), have made multi-player poker one of the fastest growing niches in the interactive gaming marketplace.

Many operators and poker experts, though, believe the boom that is being felt on the Internet is just the tip of the iceberg.

The international market for multi-player poker is already worth billions of dollars in terms of stakes, with operators taking a rake from each hand that's played. Ladbrokes projects the total "market rake" for online multi-player poker is around $100 million and growing fast.

Gaming software suppliers Microgaming and Chartwell have already developed, and are currently selling, multi-player poker software. Officials with Cryptologic and World Gaming confirmed they are working on developing systems for their licensees as well.

Henry Chu, vice president of operations for, welcomes the added competition. He feels that the sector is large enough and hasn't come close to tapping out.

"Anyone that can promote poker and turn people on to the Internet as a place where they can play, it will do good things for the industry," Chu said. "Whether it is us or someone else we aren't too concerned. We are confident that once players get into the space they will learn about us one way or another and will ultimately chose us."

Ladbrokes is a perfect example of the newfound popularity of multi-player poker. In only the first week of operation the group's online poker site has already experienced high levels of traffic. Officials with the site said that during peek hours of the day, in both Europe and Asia, more than 100 players can be found at tables. The site isn't accepting play from the United States.

Albert Tapper, the head of casinos for, said the initial response from players and industry insiders who helped test the software and have used it in the early phases of launch of been more than impressed with the system.

"Everyone has been blown away by it to be honest," he said.

In late January of this year the Paradise Poker site dealt its 150 millionth hand. The site also had nearly 3,000 players play online in one day, setting a new record.

One of Paradise's biggest competitors, Party has also experienced an enormous amount of growth and success since its launch.

For the last year, thanks in large part to credibility lent by its host, legendary poker player Mike Sexton, Party has seen its signature event, the Party Million, be included among the top poker tournaments in the world.

Most operators agree that the popularity of land-based tournaments like the World Series of Poker and the Tournament of Champions has boosted interest in online poker. Hollywood movies and the introduction of poker in more states across the United States have helped change the perception of the game from one of dark, smoky backrooms to one of legitimacy that is open to people of all ages, genders and backgrounds.

Sexton said more and more business professionals are taking up the game, and Chu said has seen a huge increase in the number of female players. "They don't seemed to be as intimated playing online as they would be in a land-based poker room," Chu said.

Sexton pointed out that women have also been attracted to the Party Poker site, where a female won the inaugural million-dollar tournament.

Players could ante up $8,000 to enter the tournament, which was conducted on a cruise line, or they could try to qualify via play on the Web site. The top prize attracted some of the top poker players in the world, with seven former world champions participating, and an online qualifier took second.

The tournament drew more than 100 players who had qualified via the Internet and were pitted against the top professional players in the world. Sexton feels sites that can best incorporate aspects of tournament poker into their mix are in a better position to succeed.

"Many people love to play tournament poker because it is an activity and it is kind of like a sporting event," Sexton said. "It is a challenge where they can take a little bit of money and invest in the game and perhaps win a lot of money, and people love it."

Sexton also said the rise in popularity of tournament poker has coincided with the influx of poker throughout America and other jurisdictions. He said in 1985 there were only two places where a poker player could legally play his game: the Vegas Strip and Gardena, Calif. Now there are 26 states that have legalized poker in one form or another, Sexton said. And the game has progressed throughout all of Europe and Asia as well.

Unlike Ladbrokes, Party Poker targets U.S. players, which has paid off significantly. In early May, Jupiter Media Metrix named the site the fastest growing multi-player poker site for U.S. audiences for the first quarter of 2001. Unique audience traffic to increased 204.7 percent over the quarter -- from 245,000 unique visitors in January 2002, to 746,000 unique visitors in March 2002.

Vikrant Bhargava, CEO of Party, attributed the growth squarely on the success of the million-dollar tournament.

Chu feels many online operators are quickly realizing that multi-player poker has mass appeal among players. They don't have to worry about games being fixed and the house winning, instead they can focus on the other players at their table and put their poker skills to use.

Tapper is hoping the allure of the system, and the large network of Ladbrokes players, will make his site the leader among online poker sites before too long. He pointed out that the system, designed by Microgaming, looks very similar to the site. Microgaming designed both systems.

The service means Ladbrokes' customers from over 160 countries can log on and play each other in tables of up to 10 players. Those who visit are able to link up with players from other casinos all over the world, according to Tapper.

He is confident that Ladbrokes' size, brand, credibility and reputation for probity provide a distinct advantage over the competition. With 300,000 online customers worldwide, it already has a strong customer base to build upon.

Tapper said the multi-player poker system will initially be marketed to Ladbrokes' sports book customers. The belief, he said, is that those customers will enjoy poker in a way that they may not have enjoyed traditional casino games.

"The poker involves more of an element of skill than your roulette and blackjack," he explained.

Tapper feels that most of the operators who have recently introduced multi-player poker did so only after months, if not years, of research and development. He said it is probably just a coincidence that most of them launched around the same time and predicts some of them won't be around for very long.

"I think it will be tough for some of the operators to secure their liquidity to make their sites work," he said. "We are hoping that as part of the Microgaming network, our liquidity will be forthcoming."

Sexton feels that online poker sites lend themselves to low-limit games, which are good ways for new players to get experience before moving up to high-stakes games.

"They can do it for 30 minutes or an hour without having to drive to a casino," he said. "Many people who play online aren't even near a facility where they could go play even if they wanted to."

Like Chu, Sexton feels the momentum that has been built from recent developments in the online poker world is just the start of a growing sector.

"We see a lot of potential for the future and room to grow," he said.

Party is busy working on the second installment of its Party Poker Million tournament, the Party Poker Million II, which will take place next March. Qualifying stages are already underway with the semi- final round scheduled for early August.

New sites, new operators and what will hopefully be new players, make the online multi-player poker segment a sector of the marketplace worthy of keeping an eye on.

Online Poker Has Arrived is republished from
Kevin Smith
Kevin Smith