How A Global Financial Crisis Affects Poker
In the past six months, most major world markets have lost 25% to 50% of their value. As far as market plunges are concerned, the worst is likely behind us. However, the ripple-effect of these losses is only just now beginning to make its way into peoples' daily lives. Some poker players I've talked to have indicated a certain apathy regarding the problems on Wall Street. Since they don't have any money in the stock market, why should they worry about what's going on? This is understandable; over the past few years, the daily business of financial markets has had virtually no impact on the lives of poker players. Unfortunately, these poker players could soon be in for a rude awakening.
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Just like the overwhelming plunge in the world markets, the doomsday scenarios in this article won't happen overnight. It will likely be a long, slow process. In the next 12 to 18 months, those making a living from poker would be wise to regularly assess the game's profitability. Don't be surprised if you're eventually forced to conclude that your time is better spent doing something else. If you put a frog in boiling water, it will immediately jump out. However, if you put it in room temperature water and heat it to the boiling point, the frog will remain calm until its death. Don't be the second frog!
Bottom Falls Out
The entire poker world is a giant pyramid: the guys at the top wouldn't be there without a solid foundation of fishy, losing players. In a global recession, there will quite simply be fewer new (and thus, fishy) players trying their hand at poker. For serious players, it seems unfathomable not to delegate a reasonable portion of their finances towards poker. However, "serious players" are not the lifeblood of the game. To make a living from poker, there have to be casual players choosing poker as a form of entertainment.
The problems in world credit markets are having a severe impact on businesses. The unemployment rate is already at it's highest since the poker boom, and we probably haven't seen the worst of it yet. As fear over job security grows around the world, people will be less and less willing to spend money. The first area in which people tighten spending is discretionary entertainment. This is the lifeblood of the poker world. Casual players who like to deposit $50 on Party Poker on a Saturday afternoons will begin to hesitate before doing so. "Hmm... maybe I should just go for a jog instead."
The poker pyramid is primed to shrink drastically. Players who used to be in the middle of the pyramid may find themselves at the bottom (read: the game will get even tougher) and players at the top of the pyramid will still be at the top, but the view won't be quite as nice (read: no more "balla" lifestyle).
First Casualty of the Crisis: Duplicate Poker
Two weeks ago, an upstart online poker room, Duplicate Poker, ceased operations while calling themselves "a small victim of the global financial crisis." Granted, the concept behind Duplicate Poker was pretty stupid (it was essentially a hybrid of bridge and poker), but their failure could be the first of many other small online gaming firms. Large, popular online poker rooms like Titan Poker will certainly be hurt by this financial crisis, but it is very unlikely they will go out of business. However, small, unprofitable rooms may find it hard to stay optimistic in the current climate and decide it's easier to just give up. In light of this, it may be wise to avoid maintaining a significant real-money balance at an online poker room near the bottom of the food chain. But it's worth mentioning that despite closing, Duplicate Poker is processing payouts for their real money customers.