Poker Room Earnings

Imagine running a business with huge margins, low labor costs and limited equipment needs. Even better is running that business nearly twenty-four hours a day, three-hundred sixty days per year. From an accounting perspective this seems like a fairy-tale. However, several online poker rooms experience these business characteristics everyday. The online poker industry is a multi-billion dollar industry with the top players taking the biggest piece of the pie. The industry is still growing with emerging countries starting to add to the player base. With recent legislative pressures finally in check, online poker is once again on the rise. If poker rooms can continue to successfully build or even maintain player base during this soft period, they can expect huge profits in the future. Here are some of the methods and ideas poker sites use in marketing campaigns to build their player base and build their brand.

Wealth Projection

Let’s first take a look at growth statistics in the online gaming industry. Online gaming has exploded in the last decade with poker becoming the industry leader. Gaming revenues have now reached in the billions of dollars and are still growing. Some projections call for an increase of twenty percent or more in the next year alone. Christiansen Capital Advisors stated that online poker revenues grew from $82.7 million in 2001 to $2.4 billion in 2005. This demonstrates the explosive growth in the industry. Industry giant, Party Poker announced in 2008 that it had revenues of $473 million and net income of $70 million. Had it not been for recent prohibitive legislature by the United States government, Party Poker would already be generating well over a billion dollars in revenue. Keep a watch on United States legislature regarding online gaming and poker. Should the federal government decide to let poker sites back into the American gaming market, you could see an immediate and dramatic rise in poker revenue.

Player Endorsements

One of the biggest hurdles for startup poker rooms is building a safe and secure image. New players only want to play at safe poker rooms projecting safety and integrity. Professional poker players endorse online poker sites. Full Tilt poker is home to the most professional poker player endorsements. Coincidentally, they are also in the top three poker rooms in terms of traffic. Pro players help project a honest and trustworthy image to potential players. New players conclude that professionals wouldn’t endorse any poker site that was a scam or unfair. While poker rooms like PokerStars, Ultimate Bet and Full Tilt pay large premiums for celebrity and professional endorsements, they reap the benefits many times over. The return on investment for worthy endorsees is phenomenal to say the least. Putting well-known faces with popular poker sites gives that room the much needed “rock solid” image they are after.

Software Enhancements

Ease of use and clarity are two of the main criteria used by beginning poker players when selecting a site to play on. Nobody wants complicated software with long learning curves and errors while playing. Poker rooms that keep their software simple and easy often become more popular than those with complicated study intensive sites. Enhancements like customer loyalty, free rolls, and custom filters also help attract players. Any type of software enhancement that lessons the burden of finding a game to play in improves user experience. Organization and transparency play big parts in separating successful poker sites from failing ones.

Affiliate Network

With online and television advertising becoming expensive for poker sites, managers have turned to affiliate networking to cover their advertising needs. Instead of paying for overpriced television ads, poker rooms have created an incentive based system for anyone who wishes to participate. Refer-a-friend and revenue sharing programs have become very popular with players and bloggers alike. Tracking links and bonus codes identify new poker players to a given affiliate account and credit accordingly. Anyone can become an online poker affiliate, regardless of experience. Websites are not required either since bonus codes can track player referrals. Whether you intend to open up a website or just refer friends by word of mouth, anyone can make money as a poker affiliate. All successful poker rooms have extensive affiliate networks with managers and customer service.

Reliability& Integrity

Game fairness and integrity have everything to do with the success of an online poker room. Even whispers of unfair game play or financial transactions can cause a “hiccup” in poker room traffic. In 2008 Ultimate Bet and Absolute poker had a scandal involving a “super-user” account. The scam was revealed based on examination of hand history on the suspected account. Business at each of these two rooms was decimated, and has still not fully recovered over a year later. Keeping a squeaky clean image is the main goal of every card room. Doing otherwise often results in a room being virtually shut down overnight. Small discrepancies over hands and financial problems are often handled with compensation like extended bonus offers. Having a reliable and honest poker site image is crucial to long term success.

Obstacles Overcome

Many obstacles arise for poker rooms over time. For starters, laws like the Internet Port Act have threatened the very existence of online poker. Although they didn’t directly ban online poker, they put a stop to the methods of funding for poker room accounts. This made it difficult for poker players to both deposit and cash-out winnings. The law was added to the Unlawful Internet Gambling Enforcement Act under the Bush administration. Recent court rulings have been made regarding online poker. Several courts have ruled that poker is in fact a skill game and not a game of chance. While poker players have known this all along, the courts have finally figured it out.

Online poker has been around for a while now with some even saying that the industry is temporarily saturated. Despite the gaming industry experiencing “softness” experts believe it will only grow in the future. With recent court rulings finding in favor of poker as a skill game, this softness could be alleviated in 2010. The poker sites most resilient to industry softness and government actions will be the winners in the long run. A recent downturn in the global economy has also hurt the prospects for online gaming. When the overall world economy begins strengthening online poker could resume growth once again. Untapped countries like China could also enter the market soon as countries may support online gaming to generate tax revenue. Despite the current negativity in the poker market, huge margins and fairly reasonable overhead costs will allow poker sites to be profitable. This period we are currently in is as bad as it gets. Those poker rooms that can made it now will be the winners for years to come. Expect big things for online poker by the end of 2010.