Dime A Dozen
THE WEEKLY SHUFFLE, 2006-12-03, by TwoGunI have been reviewing online poker rooms for PokerTips for over three years. I have seen Party Poker explode to become by far the leading online poker room, then it to be cut down at its knees overnight by US legislation. I have seen startup poker rooms emerge to become giants and others close shop within a year. I have witnessed poker rooms present just about every bonus scheme imaginable and offer just about every possible small software perk
Three years ago, poker rooms were drastically different. The online poker market in general was much smaller, and many of these companies had only been in operation for a couple of years or less. Poker rooms had significantly less features available to players compared to today. Some poker rooms' software did not even have multi-table tournament capability. Others did not even spread no-limit hold'em games!
There were very significant differences among poker rooms several years ago. Often times, this was because only certain sites offered basic poker features, such as no-limit hold'em multi-table tournaments. High-stakes games and/or micro-stakes games were also only available at certain poker rooms.
The quality of competition was also very different among sites several years ago. Many of the sites were relatively unknown and had hidden fish pools online sharks did not know about. Many sites had policies that greatly increased the softness of games, such as limiting players to one table at a time, limiting higher-stakes games, and not even providing player notes (to understand why these policies increase the softness of games, check out our Poker Ecosystems article). Our review scores reflected the significant differences between these rooms back then. Scores routinely ranged from the mid 50's up to the mid 90's.
Poker rooms have gradually become more similar over time. The ones that have survived have grown tremendously over the past couple of years. Today, every major poker room has a critical mass of players at most limits, meaning there is a significant amount of action at a wide variety of stakes at the poker room. The poker rooms that did not grow to the point of having this critical mass have generally closed their doors or have been swallowed up by other poker rooms.
The softness of games is more similar among sites now, since they all have similar policies regarding multi-tabling and other factors that affect the difficulty of the competition. All sites have bonus and promotional schemes, and it is now laughable for a site to not offer basic features such as no-limit hold'em multi-table tournaments.
Economically, it makes sense for the poker rooms to gradually become similar over time. When one poker room has a good idea (such as multi-table no-limit tournaments), it is not difficult for the other poker rooms to copy this idea. Several years ago, the differences in poker rooms were mainly due to the industry being in its infancy. Now, poker rooms have the money, manpower, and knowledge available to maximize the features available at their poker rooms.
A current example of how poker rooms are becoming similar is software translation. A couple years ago, only Everest Poker had their software translated into multiple languages. Now, most of the major non-US facing poker rooms have their software translated into the major European languages (such as Pacific and Titan) or plan to do so within the next few months (as is the case with Party Poker). Software translation is a very important feature to some players. In the past, it could have been the major reason they chose to play at a site. Within the next few months, most major sites will have their software available in the player's preferred language, so this feature will be more of a non-issue for players.
Prior to the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA), the major difference between poker rooms was size. While all sites had a critical mass of players, a site like Party Poker simply dwarfed the other sites. The size differential that Party Poker used to have is something that simply cannot be copied.
Furthermore, the critical mass of players that all sites currently have is something that cannot be bought overnight. Even if a startup poker room had all the same features that the established poker rooms have, most players would not play at the new poker room, since no other players are at the poker room. Furthermore, it is incredibly difficult for the startup poker room to offer something "new" to attract players since most of those ideas have already been thought of and implemented by the existing poker rooms.
The passage of the UIGEA has split the poker sites into two camps: the US-facing poker rooms and the ones that do not accept US players There are significant differences among US-facing poker rooms in terms of size. This is largely due to the fact that these sites, legally speaking, operate in a very gray area which limits their ability to market as well as their transparency. US-facing poker rooms will likely undergo a tumultuous 2007, as the US develops policies to block transfers to poker sites.
In contrast, the sites that do not accept US players are more similar than ever. Some of these poker rooms used to accept American players prior to the passage of the UIGEA (such as Party Poker and 888 Poker), whereas others did not, such as Everest Poker. Even though many of these poker rooms were US-focused prior to the passage of the UIGEA, they had built up a large enough international player base to retain a critical mass of players at most limits and are similar in size to the poker rooms that never accepted US players. Among poker rooms that do not accept US players, Party Poker is clearly the largest, though its size difference is not nearly as significant as it has been in the past.
The online poker world has grown tremendously over the past several years. It recently absorbed a major shock with the passage of the UIGEA, but the poker rooms have proven themselves resilient, as evidenced by the solid player base remaining at the poker rooms that had to close their doors to US players. The barriers to entry in the industry remain large, since it is difficult for a new poker room to acquire a critical mass of players without a huge advertising budget. Since most of the non-US facing poker rooms are of similar size now, these poker rooms are more alike than ever. How the major poker rooms plan to differentiate from each other in the future remains to be seen.
The Weekly Shuffle is our Sunday column with our observations and commentary on the poker world. Have an idea for an article? Leave a suggestion on the feedback page.
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