From Threat to Opportunity: Online Poker and the Media

With the recent PartyGaming takeover of the World Poker Tour brand and comments from the company’s CEO Jim Ryan about the threat to online poker from “media” companies, a subtle but significant paradigm shift appears to be afoot as threat is turned to opportunity.

PartyGaming, as the parent company to PartyPoker — once the world’s largest and most powerful online poker site — is well placed to read the online poker market place. Before the introduction of the Unlawful Internet Gambling Enforcement Act (UIGEA) in the U.S. it towered above all comers in the online poker sphere. Post-UIGEA it re-trenched, having to pull out of the lucrative U.S. market, expanded into sports betting, casino, bingo, backgammon, and games, settled with the U.S. Department of Justice over its pre-UIGEA activities in the States, and is now setting out its stall for a possible re-entry into the market it once so thoroughly dominated.

Its recent purchase of the beleaguered World Poker Tour brand surprised many, but a closer inspection of the online poker landscape and its strategic vagaries would indicate that the move could be a shrewd one, and potentially, the company is in the vanguard which is likely to transform online poker over the coming years. Having gazumped Gamynia’s $9.1 million bid for the World Poker Tour assets and fought off a late, and superior upfront offer, from Mandalay Media of $36.5 million, it secured one of poker’s best-known media brands for $12.3 million — a veritable bargain compared to the $700 million a Doyle Brunson-led consortium was rumored to be willing to pay in 2005.

Comments by PartyGaming’s chief executive Jim Ryan at a European conference in Madrid earlier this year illuminate the company’s line of thinking. “The [egaming] world is changing as regulation takes different shape in different markets. But upcoming regulation means new entrants and competition in the market, and I worry less about direct competitors such as those sitting on this panel [888 and bwin] than I do about government-licensed operators and major media firms [author’s emphasis] targeting their own markets in the future.”

WPT is certainly a major media brand in the poker sector and by purchasing it PartyGaming got perhaps more than meets the casual observer’s glance — a mature and well respected (and increasingly global) live poker tour, a far-reaching and popular TV platform, and a legal, subscription-based online poker room for the U.S.. With a 12 million-strong database of U.S. players, the latter particularly could offer PartyGaming a first-route back into the lucrative U.S. market even before the UIGEA is dismantled.

In my December editorial for Card Player Europe I wrote (on an unrelated topic) that, “What online poker companies need to realise is that increasingly they are media companies, publishing blogs, generating news, features and interviews, utilising viral and web publishing strategies, optimising their websites for search engines, producing television shows and even magazines in some cases.” The synergies between online poker operators and poker media companies has always been there, but as both sectors mature, the benefits to the operators, who are becoming increasingly media savvy, are clearly becoming more apparent.

One recent example is Gaming Media Group, which owns PokerHeaven.com and The Poker Channel, purchasing 49 percent of Bulgarian poker affiliate marketing site Igrach.com for industry estimates of €1.5 to €1.9 million. Here is a media company, which owns an online poker site, expanding with the purchase of an affiliate marketing portal. Synergy? For sure.

bwin’s Ongame Network rolling out Eurosport’s EurosportBET poker site is another example of the media and online poker colliding in happy co-operation as the pan-European sports TV network expands into online poker. Martin Lerby, head of Ongame Network, said of the deal, “We believe that online poker is an entertainment product and attracting mass-market brands such as Eurosport is part of our strategy.”

One of the world’s largest media companies, Rupert Murdoch’s News International, owns the SKY satellite TV platform in Europe as well as SkyPoker in both online playing and TV broadcasting form. The potential for success based on the inherent synergies of poker and entertainment here is probably unrivalled across both the media and gaming industries.

Consider also that PokerStars, one of the more progressive media operators in the industry, now runs a comprehensive online blog at one of the UK’s leading tabloid newspapers websites, Mirror.co.uk, as well as at TV3.ie in Ireland — a canny admission that there may well be a huge pool of potential casual cross-over poker players who just need a little more exposure and familiarity with the game before dipping their toes into the water.

Its recent purchase of troubled online portal PokerPages.com is also a significant development and industry watchers are eagerly awaiting news of what the world’s biggest poker site plans for one of poker’s most visible media sites.

So the evidence is not only there that the media and poker are coming closer together but that the poker industry is recognising the opportunities offered by strong media brands both in the mainstream and the poker spheres. The potential for the media, and particularly established and trusted poker media brands such as Card Player Media with its multi-media platforms encompassing magazines, online portals, and TV, to reach out to casual and experienced players alike and educate, inform, and entertain in the Internet age is finally being recognised by serious online poker businesses. Moreover, the potential of these brands to convert newcomers to the superficially simple yet intellectually complex and compelling challenges of poker has moved from being something of a necessary evil to a central strategic thrust for the major players in the industry, and this is only going to become more ubiquitous.

The promotional expertise offered by dedicated media organisations has been recognised by the smart players in the industry and it won’t be long before the mass-market moves in and online poker sites and poker media companies become virtually indistinguishable. The next online poker revolution will be televised, and featured in magazines, and blogged about, and reported in online news; all owned by the companies they serve to promote.