Possible Implications of PokerStars Joining California’s Regulated iGaming Market

Posted By Robert DellaFave on April 28, 2014

If I had to describe the reaction to PokerStars announced partnership with the Morongo Band and three of California’s largest cardrooms in one word, it would be ambivalent.

On the pro-PokerStars side of the fence are the players, who rejoiced over the possible return of their old stomping grounds. Less enthusiastic were California’s state legislators and tribal chairmen – Robert Martin of the Morongo and other influential figures aligned with PokerStars withstanding.

But if there’s one thing both advocates and opponents of PokerStars return to the U.S. can agree upon, it’s that the presence of the online gaming behemoth would have a pronounced effect on the state of the US’s regulated Internet poker landscape.

PokerStars would dominate California’s poker scene

Let’s start with the obvious: PokerStars would undoubtedly grab the overwhelming majority share of California’s iGaming market. One needn’t look further than its performance on an international scale to realize that.

But just in case you aren’t convinced:

  • Cash-game volume on PokerStars is approximately 60 percent higher than that of its top 10 competitors combined.
  • PokerStars biggest rival, according to PokerScout, is 888poker. But whereas 888 and two other gaming operators are currently vying for second place in the marketplace, PokerStars boasts more than 9 times the cash-game traffic of all three. Make no mistake: PokerStars is a monopoly.
  • PokerStars offers more varied cashiering options, a better VIP program and more player security options than any other major player.
  • After the passage of the UIGEA, PokerStars became the number one online poker site in the United States; a status it would retain for over four years.

Given its dominance in the US prior to Black Friday and current stranglehold in the international market, it’s safe to assume that PokerStars will reign supreme in California. But just how big can Californian’s expect PokerStars to become?

PokerStars in “ring-fenced” nations

PokerStars currently offers its services to three “ring-fenced” European nations: Italy, Spain and France. Despite isolating their online poker communities from the rest of the world, PokerStars Italy, Spain and France rank among the top 11 poker networks worldwide in terms of cash-game volume.

With regards to total players online, PokerStars ring-fenced sites fare even more favorably, ranking two, three and four behind PokerStars main site.

California features a population of approximately 38 million – less than the three aforementioned countries, but not overwhelmingly so. And its poker community is equally, if not more, active than any touted by a European nation.

Given this I would suspect PokerStars California to situate itself somewhere among the top ten poker sites worldwide, boasting peak traffic numbers in the 15,000 – 20,000 area, and 7-day cash-game averages around 1,500- 2,000. Those are cautious estimates.

Compare that to New Jersey’s top network – Party Borgata (NJ) – which averages 200 cash-game participants and peaks at around 1,800 players online.

In short, PokerStars would win.

PokerStars would force the competition to step up

Since arriving on the regulated scene in November, New Jersey’s poker sites have been plagued with a myriad of server, location verification and cashiering maladies. Compounding matters, their customer service departments, especially those of Party Poker NJ and 888, for lack of a better phrasing, stink.

Suffice to say, operators with overseas interests have not properly allocated the necessary resources and commitment to their Garden State forays. And of the ones that reside exclusively in the US, they were hardly ready for prime time. But should PokerStars enter California, the state’s second tier operators are going to have to up their game, or they will flounder.

Instead of biting their tongues and “dealing with it,” players in California will simply abandon their site for PokerStars.

On a side, if PokerStars is granted a license, I’d be hard-pressed to believe that sites like Ultimate Poker – which is struggling immensely in less competitive markets – would even bother trying to capture a piece of California’s regulated gaming pie.

With PokerStars in the picture, cross-promotional events would be plentiful

The EPT, PCA, LAPT and more: PokerStars sponsors a proverbial alphabet soup of illustrious live tournament series. A California-based live poker tour, sponsored by PokerStars, with online qualifiers running around the clock seems an inevitability.

Now if only PokerStars could align itself with the state’s bigger cardooms. Oh wait…

PokerStars presence simultaneously delays and accelerates the spread of regulated iPoker

In the near-term, PokerStars shocking announcement will inexorably delay the passage of a regulated online poker bill in California. However, if the Rational Group is ultimately permitted to preside in the Golden State, it will likely set off something akin to a domino effect, where states on the regulated gaming fence suddenly want in on the potential revenues to be reaped via an iGaming roll-out.

Furthermore, states like Nevada and Delaware will avidly seek partnerships with California, in the hope of granting residents access to the poker giant.

Even New Jersey, which suspended PokerStars application for a two-year period, would be hard-pressed not to permit it to conduct operations within its confines, Isai Scheinburg or not.

If PokerStars wins the right to compete in California, it will have already penetrated the biggest intrastate market in the United States. With that obstacle cleared, securing the right to operate in other states should be by comparison, a cakewalk.

But should it fail, PokerStars may find itself rolling the same boulder to the mountain’s apex, only for it to come tumbling down time and time again.

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Robert DellaFave

Robert DellaFave writes for a variety of online gaming sites and is also working on programming a poker simulation creative enough to beat the best. Follow Robert on Twitter @DivergentGames and on Google+

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