Planet Mark's Blog. Thoughts, News And Strategy For Poker Tournaments Of All Size

5 Inflection Points for Online Poker

Considering how short a time online poker has been around, the history has been a real rollercoaster. We have had booms, busts (in 2006 and 2011), renewals in between – and a phase when it looked like rakeback / grinders would literally suffocate the games… Poker survived, it always does. As we hit spring 2017 there are many forces acting on the game. I have split these into 5 ‘Inflection Points’. Of course, they interact with each other too, and there are always the unknown unknowns to complicate the picture.

The term ‘Inflection Point’ was coined by Dan Harrington, in his original volumes on tournament poker. If you are old enough to remember these, then you will have already survived many dramatic changes in the online poker landscape. 

My 5 inflection points are; Computing power (IA), the squeeze on grinders, US laws, country pressures / carve-ups and competing entertainment options.

Poker Inflection - AI Will Win!Poker Inflection Point #1 – Artificial Intelligence

When supercomputers beat the world’s best players it makes headlines in the regular press. For me the success of Carnegie Melon’s ‘Libratus’ is academic, almost a diversion from the real threat of Artificial Intelligence...

Computers do not need to beat the world’s best players to effectively kill online poker stone dead. They do not even have to be able to beat the 10% or so of players who regularly profit / play for a living. To kill online poker, someone needs to develop a program that can beat the 60% of losing players, break even against the next 30% and avoid / go GTO against the rest – and effectively mimic real people while doing so.

I’m very sure this is already happening. 

As computers get ever better, self-learning algorithms are created, screen reading tech improves and so on… the big question is whether the poker sites will be able to keep up.

My personal view is that the sites already know that they can’t win this race. This explains the proliferation of entertaining, though less skilled poker variants.

Poker Inflection Point #2 – The Squeeze on Grinders

Every year grinders are being squeezed a little bit harder. Rewards which they used to make a living are being taken away. Some of the money saved is ‘redistributed’ to recreational players – though a lot of it goes to fill the bank accounts of the site owners.

At the same time, more and more sites are turning their back on multi-tabling pros / semi-pros altogether. Bodog / Ignition with their recreational player model, 888 with their recreational player focused rewards and so on.

With grinders taking money from the games (and banking it!), most sites see them as liabilities these days. The squeeze will almost certainly continue, despite the chorus of ‘we add liquidity’ from the pros themselves.

I get the liquidity argument to a certain extent. When it got to the point that some people over at 2+2 were genuinely thinking that keeping a game going (5 grinders) with 1 seat open waiting for a fish was somehow 'doing that new player a favor'… well, I knew that the idea had gone too far!

US Laws and Online Poker in 2017Poker Inflection Point #3 – US Laws

There is a very real risk of a new Federal law killing off what is left of online poker in the US. This might not come soon, and there may well be resistance from some states… though the risk remains. At the same time even the new state games which generated a buzz in the early part of this year now look less interesting. PA is proposing a 25% tax…

Bitcoin remains a big plus to get around the current financial restrictions.

Check out this page for the latest on the best US-friendly poker sites.

Poker Inflection Point #4 – Country Carve Ups / Crack Downs

Australia are the latest country to ban online poker, though far from the only one. Most of Europe has already carved up their market, with the huge populations of France, Italy and Spain playing at their own sites. Will Latin America follow? Will Asia join the global player pools or will their own separate brands emerge?

When countries want to take their slice of tax money (usually in the name of ‘player protection’), someone has to pay.

It is the players, and notably the higher volume players… in many ways regulation / taxation is an equal threat to a crackdown.

Poker Inflection Poker #5 – Entertainment

It is a rare player who will sustain a huge interest in online poker over multiple years. It might not feel like it when you first get 'the bug', though the chances are you’ll quit sooner rather than later.

My ‘rule of thumb’ from a business perspective is that poker players have a half-life when joining a site of 6 months. At this point 50% will remain, going down to 25% after 1 year, 12.5% after 18 months, 6.25% after 2 years and so on. It is more complex than this of course... though I have seen this pattern many times over.

Poker needs to stay interesting to keep recreational players engaged. There is a lot of competition, gaming, sports and getting out and being social (yeah, I know, sounds strange to you grinders, though many people say that interacting with ‘other people’ can be fun!) ….

I’m seeing some real effort from the sites to keep things fresh. Not only the games (lottery SNG variations and so on), but the missions and tournament events too. PokerStars are said to be trialing a new game which includes special powers that sounds interesting. 

My question is, can poker compete long term in terms of ‘bang for your buck’?

Let’s hope that the sites have a few more tricks up their sleeve!

Wrapping Up

This week's big poker news is that Amaya, owners of PokerStars, are celebrating (in terms of share price), that their reliance on poker has declined as a percentage of their profits... you can see the numbers here (pdf) This should be a giant red flag for anyone who is relying on poker alone for their income long-term!

I'm optimistic that poker will still be around in one form or another. I wonder if the players of today will recognize it in 5 years’ time?

GL at the tables,


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