Is U.S. Online Poker Dead?

A lot has been written over the last two weeks about anything and everything having to do with online poker’s Black Friday. Most of the talk, other than screaming to the heavens about the U.S. Government, has been about what players in the United States are going to do.

Basically, is online poker dead in the United States?

My answer, put simply, is yes, at least for a while. Don’t ask me to define “a while,” but I’d be shocked if online poker were legalized and regulated in the U.S. within the next couple of years. We all know that the world’s largest sites – PokerStars and Full Tilt Poker – booted their American players.

But despite the loss of the home of the majority of poker players, many feel that since there are still some rooms and networks that serve U.S. customers, we can all just move over to their tables and continue on like the Black Friday indictments were just a pothole. I don’t buy it.

True, the three largest U.S.-facing networks that remain have made strides since Black Friday, picking up some of the exiles from the big boys, but the big gains are really just in percentages, not player counts. After the first two weekends post-Black Friday, 61%, 32%, and 30% jumps in cash game traffic may seem tremendous, but the Merge Gaming Network, Bodog, and the Cake Network, respectively, were so tiny to start with that these numbers don’t mean all that much. By the way, those figures are according to PokerScout.com.

Merge has actually jumped into the top 10 networks/poker rooms in the world, but it’s current seven-day average of 1,540 cash game players is still only about one-eighth the size of Full Tilt and one-fourteenth the size of the shrunken PokerStars. Bodog and Cake are still under 1,000 cash game players each. There is still a long way to go for these three to become sites where players can find whatever games they want, whenever they want.

The reason I don’t believe these sites will get there is that they won’t be able to attract the recreational poker crowd. Casual players, particularly those at very low stakes, make up the bulk of the player base at any online poker room. These customers play for fun, not to make serious money. I can’t imagine that after seeing Full Tilt, PokerStars, UB.com, and Absolute get blasted by the Department of Justice, recreational players will hurry up and deposit at smaller poker rooms with which they have little to no familiarity.

Why would they? Will they really want to take another chance with their bankroll? Besides, it’s not like depositing and withdrawing at any of these rooms is a cinch right now; it most certainly isn’t going to get any better before the game is regulated in the U.S. Casual players will just move on to another form of entertainment.

And forget would-be online poker players who aren’t already playing. To acquire them as customers, poker rooms will need to advertise, primarily on television. Look at Full Tilt and PokerStars – they sponsored everything poker-related on TV and advertised in places they would get eyeballs, such as ESPN.com. That required boatloads of money, something the smaller rooms don’t have. Plus, at this point, it is doubtful that either the poker rooms or partners with which they would advertise would risk running afoul of the law.

What about the pros, semi-pros, and grinders who play high-volume every day? Surely many of them will switch to U.S.-friendly rooms in hopes that they can continue making a living, right? Yes, probably, but things won’t be the same for them. The regulars are the sharks that feed on the recreational fish. The problem is those fish won’t be there, and those that are will be gobbled up quickly, leaving the tables filled with sharks trying to feast on each other.

The poker economy just doesn’t work that way. As the regulars see the competition get tougher and their win rates drop, they will gradually cash out, sending the traffic numbers on the decline once again.

Now, let’s forget everything I’ve laid out and pretend that the remaining U.S.-friendly networks and poker rooms are able to attract casual players, and grinders find these sites to be good places to resume play. Let’s say everything works out and these sites really start growing. Maybe they get as big as PartyPoker or the iPoker Network. Why would we think that they would be safe from the long arms of the U.S. Department of Justice?

It’s not like the DOJ doesn’t already know about them. If the smaller sites become large ones, then they will become attractive targets to the DOJ. They will be processing more financial transactions, which will attract the attention of the DOJ as well. There’s no guarantee that they won’t be shut down if they get too big, but there’s not reason to think that it couldn’t happen. Some sites are already nervous, as several members of current U.S.-friendly networks, including Players Only, Sportsbook.com, Power Poker, and Victory Poker, have stopped accepting U.S. customers.

Is online poker dead in the United States? Not completely, but it’s definitely bedridden at this point. There are simply too many obstacles standing in the way of the current U.S.-facing sites’ ability to grow large enough to allow most American players to make online poker a worthwhile vocation or serious hobby going forward.