Ed Miller: Will There Be A Second Poker Boom?

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“Will there be a second poker boom?”

Anyone who was playing poker during the first boom — let’s call it 2003 through about 2008 — knows what a great time it was to play poker. Zillions of new players were depositing and trying out all forms of poker — limit and no-limit, cash game and tournament, sit-and-go and multi-table. Almost anyone who was serious about trying to stay ahead of the curve even a little was making money playing. Some were making a lot. And really what could be better than making good money playing a game you love?

Poker in 2018 is much harder. Booms don’t last forever, and while today poker is clearly on healthy footing, no one would mistake it for booming. So naturally people start asking about a new boom. Is it coming? When? How big will it be? What should I do to prepare for it?

I don’t have a crystal ball, but I have a few thoughts. First, there ain’t gonna be another boom like the first one. That was a one-time affair that coincided with a huge boom in the role that the internet played in people’s daily lives.

But I do think it’s possible, even likely, that a small surge let’s call it, may be coming for poker. That surge, if it comes, will be driven by the legalization of online sports betting, casino gaming, and poker from state to state to state.

In April, the Supreme Court overturned the Federal law prohibiting states from legalizing and regulating sports betting within their borders. Within weeks, companies were legally taking sports bets in New Jersey. By the end of 2018, legal sports bets may have been placed in up to 10 US states.

By all reasonable assessments, a majority of states will likely jump in on sports betting in some capacity within the next few years.

Poker will probably come along in many of these states as a tag-along. I would be very surprised if I’m writing at the end of 2020 and we’re still stuck with the handful of legal online poker states that we have today.

Online sports betting is Coming with a capital C. Online casino gaming and online poker are probably also coming with slightly less emphasis.

It’s All About The Marketing Budget

Why was poker so good during the boom? Fairly obviously, it was all the new players with fresh deposits getting in the game.

What caused these new players to deposit and play?

Marketing. If you look behind the curtain of any major gambling opportunity, you will almost always find a healthy marketing budget driving the action. How did marketing budgets create last decade’s boom?

• Direct advertising. Shows like the World Poker Tour became popular, and online poker sites advertised on them relentlessly. This sort of spend trickles down to established players by attracting new blood.
• Deposit bonuses. During that period, operators were offering huge deposit bonuses to get people playing. These are real marketing dollars put directly in players’ pockets.
• Affiliate fees. Online gambling tends to make great use of affiliate marketing, where third parties do the marketing work for the operators and then take a cut of signups, deposits, losses, rake, etc. In poker, many of these affiliate fees made their way back to players via rakeback arrangements with affiliates.

Here’s basically how it worked. There was an initial surge of interest in poker generated by societal adoption of the internet and the World Poker Tour television program (and other early poker broadcasts).

This initial surge brought excitement and investment into the space, and new operators launched. These new operators used their capital investments in substantial amount on marketing to acquire customers.

The marketing dollars artificially buoyed the budding poker economies, and some players started making real money at the game. This encouraged people (like me) to launch businesses to teach aspiring players to win.

This teaching worked—you could read a book, watch a video, study and win money playing a game. This was naturally extremely seductive to many people, and yet more new players were attracted to the game. New players meant more TV programs, more investment, more new operators, more marketing dollars, increased competition over existing players, and so on.

The key point here is that marketing dollars are always at the base of it. They drive the economy during the boom phase.

So will we see another poker boom? If we do, here’s what it will look like.

A number of states legalize online poker in a relatively short period of time on the coattails of sports betting. These states join existing compacts to pool players between states.

All of a sudden, online poker in the US now has the player pool and liquidity to sustain itself after years of atrophy in the wake of Black Friday. This change attracts new players and rekindles the interest of millions of lapsed players. Numbers—active players, handle, rake, etc.—all start looking better to those who would invest in the space.

Some operator decides to try to gobble market share and blitzes the country (at least the part of it with legal online poker) with a marketing campaign. Ads, deposit bonuses, and affiliate dollars flow once again. Not like they did fifteen years ago, but much more than they do today.

Boom.

Well, mini-boom. Once you see the marketing, you will know that it’s on.

Unfortunately (for poker players), things will be complicated this time around because poker will play second fiddle to sports betting and online casino. Every operator that delves into poker will also likely be involved in those two, frankly, bigger gaming brothers. They will secretly believe that every regular poker player is really a sports bettor or casino customer waiting to be converted.

This is obviously largely wishful thinking on the part of the operators—many poker players play poker and only poker and will at most just dabble in other forms of against-the-house gaming.

But a sports betting or casino customer is more profitable than a poker player, so operators will never stop trying to convert poker players into sports or casino customers. (These attempts will involve marketing dollars, so if you are savvy about it, you should be able to profit from sports and casino during this period as well.)

Final Thoughts

Or, none of this could happen. Maybe poker will be overlooked rather than ride sports betting’s coattails. The reason I think it likely will happen at least to some extent is because poker is a great game, it achieved mainstream saturation in the last decade, many of the young, broke players from the last decade are now successful professionals with disposable income, and there’s a bit of forbidden fruit syndrome.

The actions the Federal government took against online poker from 2006 through 2011 were extremely effective. Americans didn’t stop playing poker because they ran out of money or lost interest in the game. They stopped because the government forced them to. I think once online poker comes back, many of the players will too. At least for a while.

Ed’s newest book, The Course: Serious Hold ‘Em Strategy For Smart Players is available now at his website edmillerpoker.com. You can also find original articles and instructional videos by Ed at the training site redchippoker.com.

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