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Currency Movements and the Poker World

One side effect of the global financial chaos are the zig zagging of  currencies. In mid-2008, the dollar got squashed; the pound and the euro strengthened greatly. The pound reached a 2:1 ratio for awhile against the dollar, and the euro held strong at around 1.5.

Then global financial markets collapsed in the fall. The dollar strengthened greatly against all currencies, as people made a flight to the dollar as a safe haven.

This eventually eroded, and the dollar weakened again in the latter half of 2009. However, the pound weakened too, mainly over fear of the budget deficits, so the pound did not move as well against the dollar as the Euro. The Euro got back to 1.5:1, but has since weakened, largely due to the situations in Greece, Portugal, and Spain.

With all the craziness in the currency world, I find it a bit odd that the dollar is still the primary currency used in games at non-US poker sites. Most of the time, the reason for this is the inertia of the pre-UIGEA world. Most now non-US poker rooms used to accept US players, so their games were structured in dollars.

Furthermore, the $3 max rake has become the unstated rake “price” in the poker world. Poker rooms may not want to risk players exiting for another site if they change to euros and then the dollar suddenly weakens (and their games thus becoming too pricey). I have my doubts how rake-sensitive most players, especially casual ones, are though.

For the past couple of years, I’ve expected a few of the major non-US sites to move their games to either pounds or euros and away from dollars. By moving their games and having all costs/deals made in a European currency, the poker room could limit their currency exposure and have everything in a more local-friendly currency. It’s been 3.5 years since the UIGEA and we’ve had several major currency movements in the meantime. So my guess is the trend will continue, and the dollar will stay king in the online poker world, even at sites devoid of American real-money players.


 



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