International Game Technology have confirmed reports their online poker network will be closing by the end of the year. The company, which only purchased the Entraction Network in May 2011, is closing the network for what they deem poor liquidity. It follows the exodus earlier this week of a number of different skins on the network and a statement from the firm, quoted by PokerNewsReport, read: “change and uncertainty in the European market conditions had diminished the expected returns in certain real money wagering products and that, as a result, the company has been forced to consolidate its product development”.
The previous day had seen a number of skins owned by iGame Malta, including 24hPoker, Pokerihuone.com and iGame.com, all jump ship with PointPoker and NOIQ also mailing customers to inform them they’re moving to a new network. It comes after a year in which the network has removed itself from Spain, Belgium, Russia, Norway, Israel, Turkey and, strangely, Canada in order to prepare itself for an assault on a future U.S. market.
The fact that IGT, which paid an overinflated $115million for Entraction, is selling up just goes to show how hard it is to run a network that is profitable using the old business model – which saw IGT with a total of 48 skins. Even further than this is the fact that IGT is a large publicly traded company and as such will have huge problems entering any market that materializes in Nevada.
Entraction being abandoned means they can channel all their money into social gaming outfit DoubleDown Casino, an acquisition that was far more expensive and could become increasingly more dependent on the social gaming sector being monetized. Without that, there’s a chance that Entraction being abandoned will be the first in a line of costly blunders.
IGT’s failings in the poker business goes to show what might have happened to Shuffle Master had they completed the deal to take Ongame off the hands of bwin.party earlier this year. Some even think that when bwin.party saw what IGT paid for Entraction, they understandably thought they could get more band for their buck for Ongame and if that was the case Shuffle Master got off scot free.