Poker's Pulse Is Strong

Five months of observing and charting online multiplayer poker activity has given Dennis Boyko a unique perspective on one of the fastest growing sectors of the interactive gaming industry.

Boyko launched PokerPulse.com on July 4, 2002. The site provides an inside look at which online poker rooms get the most action and how much money their operators are making. It's also a one-stop portal for poker players looking for a quick game.

Average Day's Ring-Game Race (First Half of November)

Source: PokerPulse.com

How big is the online poker business?

Boyko said he's compiling revenue predictions for the poker sector as a whole in an effort to determine just that. Preliminary results, he said, indicate that multiplayer poker sites are a growing revenue stream for operators.

Through the first half of November, the eight largest sites Boyko monitors (ParadisePoker.com, Poker.com, PartyPoker.com and others) brought in more than $400,000 a day, with the rest of the sites generating an additional $58,000 a day.

Boyko uses a formula that includes monitoring action at sites and correlating the appropriate rake each game generates.

In addition to tracking revenue, Boyko monitors how many players are accessing the sites.

As one would expect, the nature of the Internet creates very little down time for operators who draw from a global player base. Using GMT, Boyko determined that 9 a.m. to noon is the slowest time of the day, with a sum ring count of players of around 750. During the ten-hour time span that goes from the last four hours of one day to the first six hours of another--the end of a day in Europe, and the evening time in North America--there are typically more than 1,500 people playing poker online.

Average Ring Player Counts, September

Source: PokerPulse.com

Boyko said it's difficult to determine the correlation of high rollers vs. casual players because revenues are drawn from the rake. He said ring games generate an equal amount of revenue for operators with average pots of around $60. (The maximum rake is typically 5 percent, capped at $3 for ring-game tables.)

"The poker room doesn't see immediate extra value if the average pot is $600 versus $60," he said. "I have seen discussions where posters speculate that some rooms run ring-game tables with eight players max instead of the 10 players as a means of generating more rake revenue. I can't prove or disprove such a claim with my numbers, but I would suspect that poker rooms set up tables to match what their customers want and ask for. There is too much excellent competition out there to do anything less. I don't think any room can afford to not focus on what their customers want."

It was customer demand, in fact, that brought about tournament play online. Not only is it a popular feature for players, it also benefits the poker rooms.

"My back-of-the-envelope estimate is that tournaments may generate as much as 15 percent additional revenue over the ring-game rake revenues at some of the most popular tournament rooms," he said. "However, I suspect that tournament players may also play ring games on occasion, so maybe tournaments are a good way to build up a list of registered and funded players at a site."

According to PokerPulse.com, one of the leading money makers on a daily basis was also one of the industry's newest names: Ladbrokes.com. In June 2002, Ladbrokes added multiplayer poker to its wide array of online offerings. Four months later, Boyko said, the company was bringing in more than $50,000 in daily revenue through online poker.

A number of top software suppliers have added multiplayer poker to their systems, but Boyko feels that the most successful new operators will be those with strong brands.

"I don't think software is the key success factor," he said. "Take a look at the sites that run PKER.OB software (Ladbrokes, Poker.com and WSEX). Ladbrokes has built up ring-game and tournament player numbers that put them in the top five or even top three online sites, depending on what criteria you want to use."

Ladbrokes, Boyko said, grew its poker business so quickly because it already had a large customer database to which it could market.

As new poker sites launch, Boyko will increase his monitoring activities. He feels the sector will grow substantially in the next year as more established operators bring poker into the mix.