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4/18/2011 NEW! Comments

Weekly Online Poker Traffic Update

Apocalypse Now

The online poker world was rocked on Friday by indictments against the founders of the top three US-facing online poker sites. The indictments were accompanied by seizures of the sites' primary domains. Players visiting,, and Cereus Network sites and are now faced with a warning from the Department of Justice which states that it is a federal crime to conduct an illegal gambling business.

In the immediate aftermath of the indictments, on what has been dubbed Black Friday, PokerStars moved to bar US players from its real money ring games and tournaments. Full Tilt Poker followed suit hours later.

While Cereus Network still allows US players to participate in real money games, no new registrations are accepted from the States. Existing US players are currently unable to deposit or withdraw.

As in past legal confrontations, the sites' primary opponent is the US Attorney's Office for the Southern District of New York (SDNY), which also filed a civil claim for $3 billion against the operators. The SDNY, which was behind the Neteller debacle and many funds seizures since, continues to display a crusader's zeal for taking down payment processors and online poker operators. This is evidenced by the fact that its investigation reportedly spanned more than four years.

In this special edition of the Traffic Update, we'll take a look at the immediate impact of Black Friday on the online poker world, specifically looking at the effect on traffic. As might be expected, some operators are actually benefitting from recent events while others are hurting badly. We'll look at the winners and losers so far, and try to project how things will develop in the future.

To do this we will examine the most relevant available statistic: How are the sites performing this weekend (since Black Friday) compared to last weekend? We divide the operators into three categories: those targeted by the seizures, other US-facing sites, and the top non-US sites.

Week-Over-Week Performance

Overall, the worldwide online poker market shrank by an astounding 23% in one week. Most of those losses came from the Big 2: PokerStars and Full Tilt Poker.

The Targets -- These sites are the subject of the SDNY's legal measures

PokerStars 25%

Full Tilt Poker 48%

Cereus Network 39%

Flying Under The Radar -- These sites are still catering to US players and have escaped the heavy hand of the SDNY (for now)

Merge Gaming Network 23%

Bodog 26%

Cake Poker Network 19%

Everleaf Gaming Network 8%

Safe In Europe -- These sites did not accept US players even before Black Friday, many of them having exited the US in 2006 after the UIGEA was signed into law

PartyPoker 9%

iPoker Network 4%

Ongame Network (no change)

888Poker 5%

PKR 21%

Winners, Losers, And The Road Ahead

Clearly the biggest loser of the week was Full Tilt Poker, and the site potentially stands to lose even more in the weeks ahead. While still more than twice the size of its nearest competitor, PartyPoker, Full Tilt has lost a substantial portion of its player base.

When a site is growing, the increasing body of players serves to attract still more players in a snowball effect. Full Tilt now faces the reverse effect as player departures lead to less action, which in turn brings even more defections. Its competitors arguably have a stronger marketing operation in Europe, leaving the site to play catch-up in a highly competitive market. While Full Tilt clearly retains a large enough player base to avoid a collapse, it may not have seen the end of Black Friday's repercussions.

Meanwhile PartyPoker, which made the controversial decision to leave the US in 2006 and has been complaining about unfair competition from the Big 2 ever since, now faces vindication and a chance to regain a small amount of its lost business. The former world's number one added the most players in absolute and percentage terms among the top European sites, although this is partly because of its ongoing Card Rush promotion. The industry will no doubt be watching in May to see how Party performs when Card Rush is over.

Perhaps the biggest winners, at least in the intermediate term, will be the sites continuing to serve US players. There will inevitably be a period of mourning and taking stock among the poker-playing public, but the demand for online poker in the US is too strong to be denied for long. Many thousands of players will eventually seek out sites where they can still play.

Given the relatively small size of the remaining operators, we can expect to see some phenomenal percentage growth rates. We can also expect to witness some growing pains as these sites and networks struggle to cope with unanticipated levels of traffic.

In the long run, growth will eventually doom the prospects of any sites remaining in the US. There is simply no reason to think that the SDNY will stop its attacks against payment processors and online poker operators.

Long-term success depends on the regulation of the US online poker market. While the taint of scandal may set back legislative efforts temporarily, there is growing support for the explicit legalization of online poker. With so many Americans clamoring to play this intriguing game of skill and chance, success in the long run seems inevitable.

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