Subscription-based online poker room PurePlay, which was founded in November, 2004 in Silicon Valley, California, recently surpassed the 1.5 million player mark. Its CEO, Jason Kellerman, will be a panelist on a legislative panel at the 7th Annual European i-Gaming Congress and Expo on Wednesday. The site accepts players from the United States with open arms. Poker News Daily sat down with Kellerman to learn about PurePlay and the future of online poker.
Poker News Daily: In your words, what is PurePlay and what makes it unique?
Kellerman: PurePlay is the first and largest legal site offering play-for-cash online poker, leveraging a subscription-based model. Our subscribers can play in as many tournaments as they want and win cash, but they never put their own money at risk. Unlike other real money poker sites, there are no buy-ins or deposits for individual games, and players never bet their own money, so we can provide all the thrills of cash poker without any of the risk. Our business model is so unique that we applied for, and were awarded, a patent for it. We’re continually looking for ways to offer our players an experience as thrilling as any high-stakes game would be. We achieve this by paying out over $150,000 each month in cash prizes.
PND: Describe the challenges of operating a legal online poker room in the United States.
Kellerman: The Department of Justice has taken a tough stance with regards to online gambling, but PurePlay’s model is not considered gambling, so we do not face the legal issues that other sites do. Our greatest challenge is creating awareness among consumers, and we’re off to a very strong start with over 1.5 million players.
PND: Talk about some of your other competitors like ClubWPT. What have you learned by watching them grow and market?
Kellerman: PurePlay was the pioneer in this space, so it was inevitable that competitors would spring up and copy our model. On the positive side, it’s helpful to us because these players help grow the overall market. However, most of these sites appear to be struggling. We’ve learned that poker players want to play at the site with the largest number of players and the largest prizes, so we are focused on maintaining our lead.
PND: What do you foresee as the future of online poker in the United States in 2008? What about 2009?
Kellerman: Given the millions of online poker players who are currently playing for free without the ability to win prizes of value, I expect to see a continued increase in the number of players gravitating towards our model of playing for cash without having to risk their own money. In terms of the legalization and regulation of online rake poker, it is difficult to predict what will happen and on what timeline. We could see some movement in this area over the coming years.
PND: Would you change your business strategy if online poker were legalized and regulated in the United States?
Kellerman: No. There are around 50 million players online and close to 90% of those players are playing for fun. This is the market we are going after.
Our site was launched in November 2005, almost a year before the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed. The huge demand for risk-free online poker that existed when we launched will still be there no matter what happens with regulation. This was and continues to be our real point of difference versus rake poker.
Having said that, we would certainly consider adding a real money offering if our members were interested in it and the opportunity were to arise. With our large and growing base of avid poker players, we would have a large head start in penetrating the U.S. market. It would certainly be a lucrative proposition and we would look at this very carefully.
PND: Talk about reaching the 1.5 million member milestone. What’s your next milestone and date for achieving it?
Kellerman: Our growth in the past year has been fantastic. We have learned a tremendous amount about how to acquire players over the years and it is certainly paying off. We have also spent a considerable amount of time on creating the necessary infrastructure to support this level of growth. Fortunately, we’ve been able to invest in infrastructure, having raised capital from leading Silicon Valley investors who funded companies such as Google, Facebook, and PayPal.
Going forward, we expect our growth to continue as the network effect increases and we yield the benefits of being the leading site.
PND: How was PurePlay formed and how did you become involved?
Back in November 2004, my co-founder, Marc Marin, and I saw a gap in the online poker market. There were only two options for online poker players: either they could play free poker, which is basically uncompetitive, or they could gamble and risk losing their own money. We realized that players needed a third option, an online destination where they could win real cash in competitive games without risking losing money. This is how we came to develop PurePlay’s subscription-based model, where players can compete in tournaments for large cash prizes.
PND: What was your background prior to PurePlay?
Kellerman: Most recently I was the CEO of LookSmart (NASD: LOOK), an internet search engine that provided web search for companies like Microsoft, AskJeeves, and many others. Prior to LookSmart, I was a partner at Mercer Management Consulting, working with many Fortune 500 clients. In that capacity, I led engagements in the retail, banking, telecommunications, and oil and gas industries, with a special focus on retail consumer growth strategies.
PND: What feedback do you expect to receive from your talk at the conference?
Kellerman: I’ll be part of a panel that will discuss the legalization and regulation around i-gaming in the U.S. My role on the panel will be to talk about our legal U.S.-based model. I expect a lively discussion; this is a topic that people are very interested in learning more about it.
PND: What new promotions can customers expect in the future?
Kellerman: Our tournaments that award a seat in the World Series of Poker have been very popular this year and we plan to continue those. We also regularly host large cash tournaments with prize pools of $10,000 or more. Going forward, we plan to increase the number of cash tournaments as well as the cash payouts we offer. We have plans in the near future to offer new and exciting prizes in addition to the $150,000 in cash we now award monthly.
We will also be adding new and different types of tournaments to meet a wide range of demands and to provide variety and excitement. For example, we will expand our skill-based tournaments, where players can compete with others at their own skill level. We will be offering more high-stakes tournaments for our more advanced players and will be offering starter tournaments for those who are less experienced in online poker. As I mentioned before, we are committed to making PurePlay the most thrilling place to play no-risk poker online, so we’re always looking for new ways to excite our customers.
