Friday, January 19, 2007

Sky, Meet Head...Head, Sky...

I've gotten a few emails about my personal belief that the sky is falling on online poker being more motivated by the fact that I'd largely abandoned the field of online poker anyway, and that it's easy to be negative and throw stones at the cool kids still partying on after you've left and are skulking in the bushes. And, honestly, there's a tiny bit of truth in that, as it is easier to be analytical and logical about a situation when you no longer have a vested financial or emotional stake, but it's also pretty far from the truth, in many other ways.

I've detailed my own tales of woe here right after the UIGEA passed, but I took probably a ~$40,000 hit upon its passage and the immediate effects of affiliate programs pulling out. Instead of looking at $40,000 or so in income from my existing affiliate player base in 2007 (and that's assuming no new players), I was suddenly looking at a number that was much, much closer to $0.

That's not a fun spot to be in. I wasn't a happy camper. I spent a lot of time wallowing around and feeling shitty and blaming all sorts of other people for the spot I was in.

Eventually, though, I finally got my head around the idea that the person I should really be mad at was myself. I was too smart to have all of my eggs in the single basket of online gambling affiliate programs, yet that's exactly what I did. When the UIGEA stuff first started brewing many months before it was actually passed, it was much easier to listen to the reassuring words of online sites, affiliate programs, other affiliates, and forums and news sources. Basically listening to everyone who had a vested financial interest themselves in the sky not falling, who, not surprisingly, continued to repeat that the sky wasn't falling, to chill out.

I didn't have a backup plan if the sky did fall. Not because I don't see the value in having backup plans (I do), but because I had too much of a financial and emotional stake in the results, because I wanted to believe too badly that the sky wouldn't fall on my personal little world.

Guess what? The sky fell.

The point of my recent gloomy posts isn't to express my hidden, secret glee that all of the cool kids crushing the games for tons of money are about to have their worlds turned upside down in the coming months as online poker rapidly implodes. It's because I wish someone had tried harder to slap some sense into me a year or two ago, as far as recognizing just how fragile the whole online gambling affiliate world really was, and to motivate me to have multiple plans to fall back on, if the worst came to pass.

If you make a substantial amount of money from online poker and depend on it, you need to start preparing for the end. Signing up with Click2Pay and waiting for MyPersonalSaviorEWallet to open its doors is not a backup plan. Playing tons of poker now while you can is not a backup plan. Relying on the good folks at Full Tilt to figure this thing out is not a backup plan.

I would not at all be surprised if Everest Poker is the largest online poker site a year from now, with a whopping 5,000 players at peak hours. It would not at all surprise me if Stars and Full Tilt close their doors to US players within the next few months. It would not at all surprise me if all sites close their doors to US players within the next six months. The only reason sites are still allowing US players to play is that they each weigh the potential legal risk versus the potential profit. Each comes to their own number, as far as how much they need to make to tolerate the risk involved. Cut too deeply into their profits and the risk becomes too high, and the door closes.

Proxy servers and foreign bank accounts aren't the answer for US players. It's just prolonging the inevitable. Cut off the US and the games are going to dry up. They just are. Sorry.

The good news is that poker has crammed itself into the public consciousness to the extent that it won't go away. If you're an online pro or semi-pro, you'll still be able to make many grandusands of American dollars playing poker. You'll just have to do it playing live, instead of from the comfort of your own home.

Anyone who has played NL games in Vegas can attest to the fact that there's no shortage of dead money in the games, and it's just getting deader, not smarter, over time, as limit HE dries up. All those lemurs that got their jollies playing online aren't going to take up squash, they're going to get their same jollies at home games or casinos. Not in the same numbers, but enough to provide you with all sorts of juicy opportunities.

If you're making substantial income from poker and you don't live near casinos or have access to home games, then you really should be considering moving to some place where you do. That's your only real viable option to keep that income stream alive.

If you do live near casinos and/or have access to home games and you're married or otherwise engaged, you need to make sure that your spouse and/or family is cool with you logging many hours away from home, playing poker. It may seem the same to you, as far as the time you spend holed away in the office playing online, but it's likely not the same at all to them, if you're instead at some dude named JimBob's house until 4 in the morning.

Is the sky absolutely destined to fall? Of course not. Poker might get a carve out a month from now from the UIGEA and bam, everything is magically restored to the way it was. I'm wrong about tons of crap, each and every day. But having a real backup plan that you never have to use only invlves the waste of the time you spent putting it together, whereas having no real backup plan when you suddenly really need one can be pretty damn expensive.


Anonymous said...

Hey Scurvy -

One thing I failed to take into consideration when this Neteller thing occurred is how PokerStars and Full Tilt will fair.

Do you think that they'll take a big hit in their player base? Could this result in more non-U.S. players starting to play on some of the other networks?

I'm only asking because I tend to spend a lot of my time at Interpoker and am wondering if I should hope for an influx of non-US players jumping off the P-Stars/Full Tilt band wagon.

(By the way, not saying this as a way of rubbing in the fact that I'm not a U.S. resident, but I trust your instincts when it comes to all money-related matters online).

ScurvyDog said...


You damn lucky Canadian, you!

Lots of people seem to think that traffic (and juiciness of games) will drop at Stars and Full Tilt, with winning non-US players then responding by shifting back to Party.

That's based on the theory that Stars and Full Tilt benefited most from fishy US players being cast adrift by Party, which then caused winning non-US players to follow them, as well, to Full Tilt and Stars. When they leave, so to will many non-US players.

As far as theories go, it sounds plausible to me. So other networks would likely pick up new non-US members, but they'd be more likely to be profitable, winning players, which won't be good for the games overall.

As far as InterPoker itself, I wouldn't think they'd get slammed by lots of new winning, non-US players, as I'd think they'd go to Party instead. I'd guess that traffic at InterPoker would pick up some, but probably not hugely.

Over time, I can't help but think traffic everywhere is going to slowly erode, across all sites. Unless sites can seriously ramp up their efforts to acquire new fishy non-US players with lots of disposable cash to throw around, things are going to go downhill pretty quickly, as the steady influx of new money from the US is what's been driving the online poker engine all this time.

Anonymous said...

I think you're right about the slow erosion of poker. Honestly, the UIGEA and other strong-arm tactics recently displayed by the U.S. gov't leaves a bad taste in my mouth.

I think that as more people get frustrated by the ever-changing landscape of online poker, the masses will begin to shift their efforts to the next big thing.

Just be glad that you managed to make money while the getting was good, so to speak. I came in too late and barely managed to squeak out a little chunk of change before everything started going tits up.

UnderDog said...

First off , Thanks for posting!

I Have looked to your site, and one other for good information, and ideas of what may come. I also took action and protected my funds.

Sometimes the "sky is falling" Always a good idea to have an Umbrella.


David said...
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