Why poker consolidation is a bluff

THERE IS much talk of the poker industry starting to decline, or at least plateau, but – obvious bias aside – this is not necessarily the whole story – and certainly does not mean that consolidation is either a certainty or the right direction to go in.

Yes, the value of each player is decreasing and the marketing spend increasing. The market is more fragmented than ever with more suppliers, more operators, more complexity and on top of that, an uncertain legal landscape.

But today still only about 8% of the total gambling market is online, with the rest taking place in kiosks or casinos. We know that the online market will grow its market share. The question is more, will it be 50 %, 60 % or some other figure of future gambling that will be online?

There will also be new technology such as smart phones that will make internet more accessible. This growth will continue for many years to come.

The online poker market, for instance, has grown 17% since the Summer, according to PokerScout, and PokerStars has had 150,000 poker players starting in the same poker tournament in December, up from its previous record of 65,000 in July.

So there are certainly reasons to be cheerful – especially as I can see similar trends in our figures.

As we know, there are a lot of really successful egaming companies out there who have used different strategies to achieve their success. So I’m equally sure there are many ways of creating a successful strategy.

What is certain, though, is that in a growing market you have to outperform the competition to stay ahead or you will be marginalised. So consolidate? Perhaps, but not necessarily.

Consolidation in a fast growing and changing market is a big gamble, because one will have to spend considerable time on the merge itself if the companies are of roughly equal size, on aspect such software, player accounts, differing rakeback systems, and so on. So the question is then what would happen if one spent all that time on growth, instead of merging two companies ““ and which offers the best outcome.

Historically, the answer seems to have been ‘organic growth’ – and for the majority of the companies, it will stay that way for years to come.

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