Friday, September 25, 2009

WSOP online – why I think it’s a bad idea and will fail

The World Series of Poker is not the first entity to pretend to be one thing and then show up as something else.  In fact they are not even the only televised poker entity to do so.  While poker will get the headlines I think this deal was rooted in some old fashioned brick and mortar ideas.

WPT online not only failed it failed miserably

I know the World Poker Tour at this point looks like a marginal event with marginal venues but at the time WPT online came out the WPT was doing quite well.  Certainly they had their issues, they were not very exposed in Europe (they could not do business in the United States as a publicly traded company) and the site was a skin of a bigger network.  People might also remember that at this point the relationship was often very contentious between the players and the WPTE once they became competitors (at least competitors with the online sites that sponsor them).  There was even a very public lawsuit that probably illustrates this point best. It would be too easy and convenient to say that the WPT was just run poorly not to miss the coincidences between what happened then and this new WSOP venture. 

WSOP online is basically following the same model

They have a deal with 888 the details of which at this point are very obscure.  There are however things that we already know.  Whether it is a skin on the network or a stand alone the fact that they are going down a similar path to the WPT seems eerie, almost as if the higher ups at Harrah’s have not been following poker for the last five to six years.  Privately many players and online poker companies are wondering how friendly the WSOP will be with online poker site logos now that they will be a competitor.  I am going to guess it will remain mostly the same but I certainly would not be surprised if they made it a bit more difficult for their new competitors.

The site likely will not be available in the United States for some time

The WSOP is a worldwide brand, which is a luxury that the WPT did not enjoy.  The market is also much more mature, especially when you consider the formidable opposition that the European Poker Tour presents.  In fact, while the numbers were the same or better across the board there was a lot of discussion this year how few Europeans made the trip compared to previous years.  The WSOP does have an advantage in that Mitch Garber is running their online operations though he was basically run out of Party Poker for poor performance as their CEO.  At the very least he has experience with the challenge of marketing to non United States customers.

Online Satellites could be a very interesting battleground

Right now the deal is fairly obvious for sites like Poker Stars, Full Tilt and UB; with the Main Event getting so much coverage sending massive numbers has a lot of people wearing your gear and some of those people end up on television.  It is already difficult getting lots of people into the event given the buyin restrictions for United States facing online poker companies.  I think you can expect those requirements to get tougher.  A war on logos could be a disaster for the WSOP but it brings up an interesting point.  Do the pros make the WSOP or vice versa? I can tell you from a public relations standpoint everyone at Harrah’s is thrilled that Phil Ivey is at the final table, it is certainly conceivable that the pros could boycott the WSOP and throw their clout behind a competing event.  Personally I think that the pros might be surprised at how little people would care if they were not there. For US facing online poker sites it would also be an interesting conundrum, unless of course they all agree to boycott together.  If they do not then it creates a competitive advantage for the site that decides to offer satellites.  I really do not see a boycott happening but I think it is certainly conceivable that they will not push as hard as they once did, thereby marginalizing the event.

I do not think this is about poker for Harrah’s

I really have not heard anyone say this but 888 was illogical from a poker standpoint.  Their poker software is very lacking.  I suppose you could say that it’s a good fit for that reason, they could help 888 get their poker going and 888 could help them on the online casino side.  I think it is more likely that Harrah’s sees the poker as getting people in the door to lose money in their online casino’s.   Ask any brick and mortar casino and most will tell you that poker is a hassle that they would rather avoid.  As an old school business in this regard I would bet they see the greater value on the casino side.  That is why I believe they chose 888.

Poker exists in a bubble

The poker industry is a finite system, you can do all the marketing you want but there are just people who are never going to play poker. For the industry to thrive everyone needs to know their role. For Harrah's their role was hosting the biggest tournament and they have done a good job with it by most accounts (mine included). They were certainly helped by a lot of people along the way, many of those people they are thumbing their nose at opening this card room. Simply put Harrah's will not be expanding poker, they will be taking from an existing pool which is likely to upset the apple cart and could hurt the future of poker.

Success is not a slam dunk

Harrah’s live casino’s are struggling which is why it is not surprising that they are partnering for their online venture rather than building their own.  They will be entering a space that is incredibly competitive with fewer controls on the customer than they currently enjoy.  Of course their overhead is also lower.  In terms of brand awareness they have that in spades (see what I did there) but the Internet is very fickle, people are not going to consistently play on a site that is less than their current experience.  I think people are expecting this new sea of online fish that do nothing but lose.  That might be exactly what this new card room will need to do succeed because while many people consider it a foregone conclusion they will do well I am not one of those people.
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