A former Vice President for PokerStars when the site launched, Dan Goldman has since dabbed into several other poker ventures. He served as the founder of both Duplicate Poker and Fleet Street Games. The latter, a subscription-based online poker site that shut down last October, recently announced that it would send players to PokerStars in order to complete cashouts. Goldman spoke on the future of the subscription-based online poker model as well as the events surrounding the closure of Fleet Street Games.
Poker News Daily: How did the idea for Fleet Street Games arise?
Goldman: I had looked into the idea of subscription poker many years ago for PokerStars, thinking that it might be a good way to introduce players who wanted to mitigate or forecast risk (which seemed to be major barriers to entry). No one was doing it at the time, but there were a number of sites in other forms of gaming that were showing considerable success, such as Pogo and WorldWinner. I eventually decided that we were likely to create too much confusion in the marketplace and set the idea aside.
In November of 2007, I was invited to speak at a conference in Malta on skill gaming. One of my topics was discussing opportunities for European operators to gain a foothold in the U.S. market without violating gaming laws in most states, opportunities that would allow them to establish a beachhead if and when the industry became legal in the U.S.
After the talk, the CEO of a major European gaming operator approached me and asked if I would be willing to lead such an effort for them if they decided to pursue it. I put together a business plan and pro forma income statements. They eventually decided that the risk was too great, but I saw a lot of potential value, built the plan out, and started looking for investors.
At the time, there was only one company in the market, PurePlay, but within weeks, ClubUBT and ClubWPT launched, and then SpadeClub debuted about three months later. I found an investor and we began to build out the site based on existing software. We launched Fleet Street Games in beta in June of 2008. The full launch was in September of 2008, but at that point, our investors were already experiencing serious problems as a result of the downturn in the economy, so I went out looking for investment capital. Unfortunately, I was doing so in the worst market in 80 years.
PND: Was the closure of Fleet Street Games, then, just a result of the sagging economy?
Goldman: That was it. We were, in fact, performing ahead of forecasts at the point when we shut down. We had hoped to have 8,000 total players and 1,000 paying players by October 31st. When we shut down that day, we had about 12,000 total and 1,600 paying players.
PND: Talk about the difficulties of processing cashouts for Fleet Street Games and why you forged a partnership with PokerStars.
Goldman: Cashouts required cooperation from our investors. We wanted to make sure that, when we closed down, we had sufficient funds to cash everyone out. Frankly, our investors slowed the process down. We knew that we had asset value in players who made it clear that they were willing to join a poker community. I started shopping around for a partner and eventually opened discussions with PokerStars. They were interested in taking on player liability in return for being able to connect with this player base.
PND: How do you market subscription-based sites effectively?
Goldman: We believed from the very beginning, and actually one of the fundamental tenets of our business plan, was that there were two primary audiences for whom the idea of subscription poker would resonate. One of them was the low-end poker market. If I’m playing $0.50/$1 Limit Hold’em and my typical deposit is $50, wiring money is out of the question. It’s too expensive and too difficult. We believed that there were a lot of players who were orphaned by the Unlawful Internet Gambling Enforcement Act (UIGEA) and they were a key market for us. The second were people who played games online and were used to the idea of paying a subscription fee for doing something monthly.
Between those two markets, we believed that we had an immediate potential market base of 13 million players. Our focus was on places where we felt we’d be able to attract people who liked playing games in communities. We very quickly discovered that Facebook and MySpace were great opportunities for spreading the idea of subscription poker. We found a couple of marketing partners. We also had built into the software the ability to create leagues and clubs that the players could manage. We knew this would resonate well with the social network community.
PND: Talk about working for PokerStars and how you became involved with the site.
Goldman: When I started with PokerStars, I was one of the original beta testers. I won tournament number one and my wife won tournament number two. I loved the site and loved the software. They were looking for someone who knew marketing to help them take on the big boys.
I started in February of 2002, right after its official launch. A couple things became clear to us. One of them was the opportunity that the market created for us. A few sites got big quickly and so had poor customer service. We were certain that was a real opportunity for us.
Second, the technical backbones of the products out there were marginal at best. It was not unusual when playing in a large tournament for there to be a mass disconnect. We also realized that, while people liked playing cash games, they also loved playing tournaments. We offered both, but spent considerable resources in building high-quality multi-table tournament poker. This was an area where, when we started, Paradise Poker left the door open. They didn’t have MTTs and didn’t launch them until late 2004. It was a huge opportunity for PokerStars and PartyPoker. We gained some of our initial market share just by being able to offer massive MTTs. We instantly had these fill up and they became very popular. In early 2003 when the World Poker Tour launched and PartyPoker had its big surge, we grew right behind them. By 2004, PartyPoker was number one and we were number two.
PND: What’s next for you?
Goldman: I continue to remain interested in the subscription poker market, which I really believe poses substantial opportunities for someone who does it right. There is an active market that is interested in this concept. Fleet Street Games was well-positioned to take advantage of the marketplace if only we had better timing in raising money initially or been able to withstand the disastrous downturn in the market.
