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Lockdown reveals poker’s qualities—can the trend be sustained?

Insight | Analysis
Online poker has enjoyed something of a revival during lockdown but how are operators responding to the increased levels of interest, and can they sustain the trend as social distancing eases and sports return? Jake Pollard speaks to PokerStars and 888 to find out

With all major sports leagues having completely shut down, bettors have returned to online poker tables and tournaments in, if not significant, then at least meaningful numbers.

In April, poker’s contribution to New Jersey’s regulated gaming revenue soared 208.7% year-on-year to $5.1m. Over in Pennsylvania, online poker accounted for more than half of Mount Airy’s igaming revenue for that same month, at $5.3m. In Delaware, meanwhile, poker rake and fees rose 275.9% in April, to $84,034, the vertical’s highest total since March 2014. Each state shows significant growth, albeit from a very low base.

Surprising in some ways, this uptick in poker activity during lockdown has actually emphasized the qualities the game brings out in punters. Namely, the mix of skill and luck that is required to play that marks it out as an attractive proposition for players who want a gambling product that creates engagement.

The social aspect, at a time when people have been confined in their homes and crave interaction, is another of the game’s features that is impossible to ignore.

The online experience and player interactions have seen little change amid the pandemic. For brick-and-mortar games, on the other hand, the heat cameras screening workers and guests entering the venues, combined with social distancing measures, face masks or plastic screens separating players from one another do represent major changes.

These social distancing measures put an entirely new slant on how the casino experience will be presented and marketed by operators. But potentially and most importantly, it will also make a huge difference to how it is consumed by players.

US rise

Poker has also enjoyed renewed enthusiasm in European markets, but the trend has been even clearer in the US. As outlined above, three of the four states where igaming is regulated, New Jersey, Delaware and Pennsylvania, have all reported sizeable revenue increases for the vertical. Nevada, however, has redacted figures, as this would show revenue figures for WSOP, the only active brand in the state.

But where—and why—has this audience emerged under lockdown?

The novelty of being able to play on regulated sites and a long-standing cultural affinity with the game coming back to the fore are likely factors.

In addition, today there are just three networks and five operators active in the US. There are the sites operated by PokerStars; the GVC-powered Borgata and Party Poker; then 888 and WSOP, operated by Caesars Entertainment, powered by 888’s software. This creates a much less cluttered field than when the industry was in its heyday 15 years ago.

Another factor could be the lack of sports for betting. However, Severin Rasset, managing director of PokerStars, says the picture is less clear-cut.

“As sporting events declined in number, we did see an increase in poker and casino activity,” Rasset explains. “But really, it’s a mix. New and returning players seem to be choosing online poker as a way to get a lot of value for their entertainment dollar, and in a way that’s stimulating and socially engaging.

“Many are playing for free or at low stakes, and there’s a particular interest in multi-table tournaments (MTTs), where you can play for hours for a single buy-in.”

And while poker sites are of course happy to see a new influx of players, Rasset adds there is a greater focus on social responsibility.

“PokerStars has always been highly focused on protecting our players, particularly in the current environment,” he says. “Among many other measures, this has meant actually reducing our marketing messages and adapting them to place even more emphasis on responsible gambling and the tools and resources available to our players”.

This point is also made by Yaniv Sherman, head of US poker at 888: “Being a multi-product platform is an important feature, but we are putting in a massive effort on responsible gambling during lockdown.

“We didn’t focus on driving traffic to the site, and have educated players about playing within their means and not overdoing it.”

Evolution, not revolution

Sherman adds that the combination of Covid-19 and consumers playing on the platform in exceptional circumstances means 888 has spent a lot of time educating them to ensure they play within their means.

“The last time operators went after players hard was in 2015 with daily fantasy sports,” he says. “That vertical exploded; and then imploded. We want an evolution, not a revolution [in how real money games are played].

“The US is a big enough market for operators and we should remember the majority of players are still playing offshore, so it’s important to do things the right way and not attract the wrath of regulators.”

We should not be surprised at reading comments from leading poker brands that appear to downplay, or contextualize, the progress the vertical has made in recent weeks. Understandably they don’t want to be seen as profiting from or exploiting the lockdown, attracting players who might be bored, depressed or worried about their finances during this unprecedented crisis.

The emphasis is put on highlighting free-to-play games and educational resources such as Twitch and PokerStars School. This allows players to learn the fun and social side of poker without spending any money, Rasset points out.

“Beyond that the best part of our efforts remains on developing the quality of the whole PokerStars experience, whether someone is signing-up and depositing or spending half-an-hour watching our streamers Lex and Spraggy squabble on Twitch,” he continues. “That way, if they do choose to spend their time with us, we’re ready to meet them.”

Las Vegas casinos reopened on June 4 and, along with many other land-based venues across the US, have seen queues of impatient players waiting to be allowed to the tables. However, that pent-up demand will abate, and social distancing measures will alter the experience significantly.

Sherman believes a socially distanced future may benefit poker in the long term. He too acknowledges the vertical has benefited from the lack of live sports, which in turn has given people the free time to enjoy a more immersive form of gambling.

“Equally, even when sports return, watching a game in a bar or stadium won’t be as widespread so people will still have more time than usual to take part,” he adds. “Culturally the US also has a significant poker heritage so there is still lots of value in the game.”

Efforts to retain these new players, or bettors that have migrated to poker, will be key, according to Omer Liss, director of strategic services at CRM technology specialist Optimove.

“Segmentation is key,” he says. “New players who joined during the Covid-19 period will be targeted more frequently and with enhanced offers to reduce churn rates.

“[However] the expectation is to have higher churn rates for players who joined during lockdown, just like for sports bettors who joined during a World Cup. Active former players will be segmented by former activity: for example, sports players who are reactivated once sporting events return, and also played poker during lockdown, can now be considered multi-product players.

“Keeping these players playing on both products will be part of the answer.”

Liss adds a note of caution, pointing out that after unexpected events, things tend to return to normal. Furthermore, he says, operators are incentivized to shift players to other, more profitable verticals.

“[Sports] bettors have a slightly higher value compared to poker players, and casino lifetime values are almost double those of poker,” says Liss.

Levels of play might not stay at the same high levels when things return to normal, but they are unlikely to subside back to previous levels.

According to Sherman, this will be down to the fact that “more states will regulate their igaming sectors and there will be more liquidity as they agree to compact with other jurisdictions.

“More players will also mean game variants like Omaha will be more attractive thanks to more lobbies being created by these larger liquidities.”

Depth and commitment

Poker’s prospects of sustaining its lockdown growth rest in part on its ability to put on a show. Live events were a key part of the vertical’s popularity in the past, and have largely sustained despite its online decline.

For Rasset, “live and online poker are entirely complimentary. For so many poker players the dream is to face down their heroes at the tables in the flesh and maybe at a final table surrounded by cameras.

“So, although some players may choose to move their play online if physical cardrooms remain closed, or the new experience isn’t quite what they’re looking for, ultimately I see any access to poker, live or online, as a positive for players and, by extension, the game.”

Going forward, operators are competing for a player’s time against many other forms of entertainment.

“That’s as true for a brand-new player as it is for a weekly regular, or even a live cardroom veteran who hasn’t opened PokerStars in years,” Rasset continues. “In order to do that effectively, we need to be consistent in the quality of the product and service we provide in everything from the act of signing up, claiming a gift, or taking down a tournament to dropping by on Twitch or YouTube away from the tables.”

Both Sherman and Rasset confirm 888 and Stars are committed to all aspects of the game, from the regular visits to new game variants, timeless classics and everything in between.

With so much of the igaming industry being focused on sports betting in the past two years, Rasset is hopeful that the wider industry has at least been reminded of poker’s appeal. He says that with investment, it may once again begin to realize its potential, both in the US and beyond.

“That kind of investment, that kind of competition in a regulated market, is good for the future of the game and its players”.

Sherman is confident the online vertical will see renewed interest from states that have been looking at regulation and land-based casinos that have been badly hit by the Coronavirus health crisis wanting to diversify into the interactive realm.

“We will see how things are once Summer has passed. Sports will be busy during that period, but the risk of a second wave exists and that could lead to further lockdowns,” he says. “Most offline operators understand the online vertical cannot be avoided and we are confident many of them will be looking for online options in the coming months.

“Poker will benefit from these trends and we will continue building it up.”