Being a Director of Sales of a big multinational betting company that provides digital solutions for Sports betting and gambling BetInvest LTD, apart from great responsibility, gives me the chance to travel the world and meet different people. Most of them have an idea of starting the business and getting rich quickly. What surprises me – is not that many of them act under assumption that gambling industry is more tolerant of making mistakes but how many companies in the industry are eager to exploit the newcomers’ naivety to their own advantage. In this article I would like to talk about online poker module and whether it is a good idea to include poker module as part of betting website.
The poker bubble takes roots in year 2003 when the 2003 World Series of Poker in Las Vegas was held. It was won by Chris Moneymaker, 27 years old accountant who happened to be a poker amateur. This is the man who launched the so called «Moneymaker effect». He had entered the tournament with 39 dollars and turned them into 2.5 million at the end of the tournament. The media was quick to pick up on the story of the everyday accountant and make him a “poker genius”. Until then the game did not have a good reputation at all and was even considered intimidating. No good poker modules existed before then.
Suddenly many people could relate themselves to this guy Moneymaker, they all seemed to have similar jobs and possess similar mediocre poker skills. His victory started the online “poker craze”. Big companies like PokeStars and Party Poker started to use aggressive marketing strategy to promote poker on internet and attract crowds of people. Many companies started work on poker module that can be easily installed into existing betting website.
So what is still keeping online poker afloat? Definitely its players. Poker is considered to be a game of prediction. There is a learning curve that applies to any prediction game. But the progress the person makes while learning poker is not linear. Actually, by spending just 20% of its effort, the person can achieve 80% of the skill. Mustering remaining 20% of the skill requires other 80% of effort. This is known as “Pareto principle”. Most of the players will never get above 80% of the skill level. To be considered good, the player needs to get only the basics right. As McDermott in the famous movie “Rounders” said “Listen, here’s the thing, if you can’t spot the sucker in your first half hour at the table, then you are the sucker”.
The more competitive the poker field becomes – the harder it is to win in it. So what does Pareto Principle of playing poker actually mean for poker economics, ordinary poker players? It means that worst players are losing much faster than the best players are winning. Worst players who do not possess the necessary 20% of knowledge are much worse than the best players are good. (I hope you are getting an idea). A key point here is that the worst player at the table is losing money much faster than the best player is winning it and is much more likely to leave the room. In poker lingvo – bad players are called “fish”. So how does poker industry sustain itself, if the worst players are constantly going broke and why poker industry actually needs YOU to give it a hand? Big poker companies are employing aggressive marketing strategy to constantly attract new players –new fish. Poker module is the tool. The companies use various tactics. One of them is popularizing poker on Sports betting websites by introducing poker module.
So should you as the owner of Sports betting platform succumb to the temptation of integrating poker module into your existing site? Let’s face it, you hardly be able to take on the companies like PokerStars. Every online poker player should pay the “Rake” which is a commission going to the organizer – the owner of the poker module. So it is in the best interest of the company which provides the poker module to channel as many players to your website as it can and impose high rakes to make sure it gets the profit. At first glance it looks as a good move and you might be even tempted to take part in it. But just think – it is your bandwidth being used and your server taking a load. Remember what I said earlier about good players making money much slower than bad players loosing it? To keep good players online, you must be a constant provider of fish. Do not forget, that online poker is very fraud prone, so you should definitely keep an antifraud team which monitors the players and their activity. Whether you are going to make enough money to justify it all – is a big question.
On the other hand – if you can get it right, poker rooms use incredibly successful business model. Charging a fee for every hand played is a no brainer. Then there is a very good marketing tool to keep your customers base growing while using your poker module. It comes in the form of the “rake back”. Basically, it is part of the money you took in as the “rake” or commission from winning players, and then give to the players you chose to keep happy. You can even establish few levels of “rakeback” which depend on the numbers of hands the player plaid.
To sum up, if you are not experienced poker player or do not have a good insight of the industry, it might become a risky adventure for your whole business to introduce a poker module. Unless you are ready to take that risk – you should think twice before going in that direction and integrating a poker module on your website.
Head of Sales, BetInvest LTD.