Returning the Favor and other Slices of Life

Returning the Favor
Returning the Favor
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Sunday, January 21, 2007

A good point regarding the future on online poker

From my hot Canadian friend - "There have been a few who have flagged this as the "death of online poker". I seriously doubt it. Yes, the vast numbers of American fish may leave this pond, but there are equally fishy players in Europe, the UK, Canada and Australia. And let's not forget the emerging Chinese market that business people everywhere keep salivating over."

The Asian market is where a lot of people are turning their focus now that the doors are swinging closed in the US. And really, why not? There are over a billion people living in Asia. That's more than triple the population of the US. So the likelihood of there being more gamboolers is pretty good, right?

I'm not sure. I don't pretend to know jack about world geography or socio-economic standings outside my own small little world, but I think that the Asian market is going to be tough to break into for online poker companies for several reasons.

1) It's easier to keep existing customers than to recruit new ones. That's a basic truth of sales/customer service markets. It's just the truth. The hardest thing in the world is to get someone to buy from you the first time. Once they've walked into your store/deposited money on your site/ordered from your webstie they have overcome the greatest hurdle to being a lifelong customer - inertia. Newton's First Law applies to sales as well. People that are not customers tend to remain NOT customers, while people that are customers tend to become repeat customers. Unless you screw them over somehow. Like with no warning announcing that they can't use your service anymore, thank you very much for making us ridiculously wealthy in the first place but you are no longer welcome here.

But getting tens of thousands of brand new customers will cost millions in marketing revenue, as well as take months while the customer base grows. It would have been far, far cheaper to simply expend a little money to keep the existing customer base.

2) Some of these countries are very poor. It's one of the reasons the US is such a ripe plum for exports for companies in Asia. There's a buttload of expendable wealth here. The kind of money an average internet poker player keeps in his bankroll here (and by average I mean someone who plays a lot, is pretty good, but isn't a high roller by any stretch. Let's us Drizz as an example) is higher than the average annual income in Cambodia, Vietnam and North Korea combined. Frankly, my bankroll is higher than the annual average income of those three countries combined, and I went broke in January!

Of course, there are pockets of extreme wealth in Asia, just like there are pockets of extreme wealth in any impoverished region, but the overall distibution of wealth is simply greater in the US. That's going to make it harder for companies to be as profitable, as Americans are very wont to throw money away in ridiculous quantities for ridiculous entertainments, and other countries are less silly than we are.

3) Lack of personal freedom. No really, regardless of the fact that Dubya stole my habaeus corpus last year and hid it from me, we're still relatively free here (albeit becoming less so each passing year). The same thing can't be said in parts of Asia. Don't believe me? Try wearing a sandwich board saying "Kim Jong-il Wears Pink Panties" and walking down the streets of Pyongyang.

In a region where entire countries have state-controlled internet access, how do you really think you're going to make $6 Billion a year on gambling for companies based in Europe? Don't hold your breath. The insular Asian marketplace is more than just a myth, so I wouldn't wager too heavily on the Brits that run Party Poker being able to make too much headway into that part of the world.

So once again, we're back to where I put us last week - needing to band all these online poker companies together to save themselves by buying influence. These companies might be able to say to themselves now "we can get along just fine without US money," but it'll be a different tune they sing in six months when it's WSOP time and there's no influx of new donkeys because no one is wearing their logos for any event for any amount of money.

Then again, maybe Matt is right and Howard Lederer will get arrested on one of his trips back into the US. It would certainly be the best thing that could happen to us, unless maybe it was Andy Bloch. Howard is an impassioned, coherent, educated speaker on this topic and would certainly have the backing to take the fight to the highest levels. I certainly don't wish any ill on Howard, but he would be a great standard-bearer for online poker, and I'm sure he's already considered this possibility.


Goat said...

I like this thinking!

Top 10 Players We'd Like to See Arrested For the Good Of Online Poker:

10) Howard Lederer
9) Greg Raymer
8) Eric Molina (just because it would be nice to see him get arrested)
7) Daniel Negraneu
6) Chris Moneymaker
5) Jennifer Harmon
4) Phil Hellmuth (see #8)
3) Andy Bloch
2) Doyle Brunsen
1) Chris "Jesus" Ferguson

Time to order some "Arrest Jesus NOW" T-Shirts, and sell them from the site, Falstaff.

You'll make a freakin' mint. All I ask is a $500 finder's fee for the idea, payable in Full Tilt tokens or Stars T-bucks.

Drizztdj said...

Cashing out when I finally could have made a run at the higher stakes games has really been a sore spot for me.

Now I have ~20 buy-ins at the level I play and once that's gone (or cashed out) I'm done and picking my swords back up for Dark Age of Camelot.