Why New Players Will Be Drawn to Licensed Online Poker

100billion-hand_orig_full_sidebarLegal, licensed online poker in the United States is still in its infancy –it’s only available in three states at this point—but already we are seeing plenty of new players drawn to the online game, and while I have traditionally been very pessimistic when it comes to a second “Poker Boom” it now appears that this is extremely likely if licensed online poker continues to spread across the US.

And if this does come to pass it is a plate of crow I will be more than happy to eat.

So what is it that these licensed online poker rooms are offering that the unlicensed, illegal online poker sites of just a few years ago were not able to offer to bring these players into the game? Keep reading to find out.

The market was never saturated

As popular as poker was from late 2003 through 2006, even during their US heyday, sites like Full Tilt Poker and PokerStars never managed to reach a saturation point in the US. They had plenty of traffic and plenty of US customers, but there were plenty more sitting on the sidelines, unsure if they wanted to partake in these games.

I don’t have concrete data on this but anecdotally I’ve interacted with many poker players in home games and at the Foxwoods poker room who were always very skeptical of online poker. Whether it was a fear the games weren’t on the up-and-up, or that their deposits weren’t safe, or that the industry itself was illegal and they would be breaking the law by playing, there were plenty of potential customers that unlicensed online poker sites could never reach.

This is especially true in the older demographic. While 20-somethings have never had any compunctions about playing online poker, a 45 year-old father of two saw each red flag (no matter how small) as just another reason to never deposit online, whether they were afraid of breaking the law or if they just simply didn’t want to risk their money being stolen.

So, as great as the online Poker Boom was from 2003-2008ish, there was always more room to grow, and if poker was fully licensed and regulated during this period the Boom could have been even more impressive than it was.

Perception is reality

As I mentioned above, a lot of potential online poker players were frightened off by even the possibility that what they were doing was illegal. The overall perception of the safety and responsibility of the online poker industry during this time was built entirely on faith, and to a skeptical player it most certainly appeared to be a house of cards.

Think of it this way: Suppose your friend tells you he has this great connection for Plasma TV’s, but when you go to pay with your Visa card your bank declines the transaction, are you still interested in doing business with this person? Do you still think this is a “legal” enterprise?

Everything about the US online poker industry post-UIGEA screamed “illegal!” And all of the arguments saying how “playing” online poker is not illegal, just running an online poker site is, were pointless.

The point being, most casual poker players are not so hard-up to play $25 NLHE that they are going to base their decision on a technicality about how the provider is breaking the law but the player is not.

The fact that Congress was trying to pass laws to legalize and regulate the industry would also indicate to the average person that online poker was currently illegal. After all, if it was legal why would they be trying to pass laws to make it legal?

There is also the problem that people tend to forget the 1,000 people who never had an issue playing online poker, but the one instance of a bounced check will stick out and be remembered. The same cognitive bias is the reason we remember the handful of online poker rooms that have screwed us over the years but by and large the hundreds of online poker rooms who paid out every dime owed to players go relatively unnoticed – Books, movies, and 60 Minutes segments don’t get made about the companies that did what they were supposed to do.

From 2006-2013 the perception of online poker held by the average person on the street was that online poker was illegal (which it was and wasn’t) and that the sites couldn’t be trusted, which was also a true and false statement at the same time.

Transaction times

If you really want to know what kept a lot of people away from the online poker tables, people who would have played regardless of the legal gray areas the sites were operating in, look no further than the increasingly slow and increasingly convoluted transaction times. Maybe the Government should have been paying a little more attention to what their fat cat friends in the banking and savings and payday loans online industry were up to while they were so busy making sure that hard working Americans can’t have a little fun in their off time.

Not only did the denial of many credit cards paint the industry as being illegal, but it also made depositing at online poker site that much harder. And it seems that there was a tipping point for casual players, where the difficulty of depositing and withdrawing outweighed any positive aspect online poker offered.

By the time sites started demanding picture ID and other forms of verification to process a withdrawal (funny how you never needed to present this when you deposited), a withdrawal that would then take two to three weeks to arrive at your door, they may as well have told players that two guys would meet them at the bowling alley with an envelope full of their winnings.

Things are changing

Fortunately, as we are seeing in New Jersey, it appears this is all changing. Not only are the early traffic reports far higher than I ever expected, but the casual poker players I talk to at home games and even around town are suddenly very curious about online poker “now that it’s legal.”

Again, this is all anecdotal evidence on my part, but it seems like the people who shied away from the unlicensed online poker rooms are more than ready to play at regulated, licensed online poker room, and this could very well bring about a second (although still smaller) Poker Boom.

 

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