The Inside of Scoop – WSOP.com On The Move & The Current Hurdles to U.S. Operators

Posted by admin | Poker Affiliates | Wednesday 6 November 2013 1:50 pm

Editor Note: Jeremy Enke is an industry veteran most well known for his publications as well as his industry accomplishments. Jeremy also leads the community at Poker Affiliate Listings. Jeremy writes a weekly feature for Poker Affiliate Solutions on the fast-moving developments in the regulated U.S. online poker market.

As the WSOP Main Event concludes this week in Las Vegas, all eyes on the business side of the poker industry are squarely focused on the “Main Event” that is approaching in the regulated online gambling industry. With the regulated markets in New Jersey slated to open on November 26th, approved companies are beginning to finalize their launch plans ahead of the soft launch period.

Before we open up the “Pandora’s Box” known as the New Jersey regulated gambling market, let’s take a closer look at the existing regulated markets.

Knock-Knock Ultimate Poker…….Who’s There? WSOP.com

Since the launch of WSOP.com in September, almost 3 ½ months after UltimatePoker.com, the brand has continued to see month over month growth. According to our friends over at PokerScout, WSOP.com has pulled to nearly a neck and neck market share position with Ultimate Poker. WSOP.com boasted 251 peak 24-hour players last week compared to UltimatePoker.com rounding out the week with 261.

I fully expect in the coming weeks to have a headline here at the Inside Scoop that reads something to the effect of “WSOP.com passes UltimatePoker.com in 24-hour peak players.” The head of online poker at WSOP.com, Bill Rini, @BillRini has one of the brightest marketing minds in our industry. The Loyalty Match Promotion at WSOP.com targeting Ultimate Poker grinders is testament to that, and probably one reason the pendulum is swinging. Nice work WSOP!

The Insignificance of Delaware Going Live This Week

There, I said what everyone in the industry is thinking. One would think that when the 2nd state in the country goes live with regulated online gambling, and a full suite of gambling products nonetheless; it would be a significant event. That was hardly the case when Delaware opened its doors to real money online gambling this week.

The Delaware state Lottery Office chose Scientific Games International-888 Holdings as the primary vendor to provide a full suite of gambling products to its residents. The first problem with Delaware however is that the population is less than one million residents. It’s hard to see companies investing a great deal of money into such a small market.

The second problem with Delaware is that their tax structure, well, let me blunt, it sucks. While slot vendor fees in the state are only 7%, Internet vendor fees are in excess of 30%. Nevada and New Jersey are 10% and 15% respectively. Also in a clever money grab, Delaware declared that the first $ 3.75 million in iGaming revenue would go directly to the state. Moral of the story, Delaware is insignificant until poker compacts begin to take place, and even then they bring no real value to the table.

Over 25 Companies Receive Preliminary Thumbs-Up To Provide Ancillary Services

It’s not just land based casinos and existing operators looking to strike it rich off the new frontier of online gambling either. Over 25 “non operator” companies were given the go ahead as Ancillary Casino Service Industry Enterprise’s (CSIE’s) this past week as well. Some of these companies included geo-targeting organizations, marketing organizations, payment processors, and a host of others.

Ahh, yes, the question for affiliates reading the Inside Scoop, Will gambling affiliates be required to get a CSIE? That question remains unanswered from regulators. As mentioned in previous columns, it is my opinion that the sub-affiliate model would be extremely effective and create a win/win for everyone involved.

Gambling affiliates being compared to “gambling junkets” is complete nonsense in my opinion anyways. Although we can’t share names, approved operators in New Jersey are already anticipating the ability to offer sub-affiliate deals and work with “Master Affiliates”. Watch closely for these type of deals to emerge in the coming weeks.

The Best Overall Resource for Gambling Affiliates Interested in The U.S. Regulated Markets

As mentioned earlier, the U.S. regulated gambling market is quite the “Pandora’s Box”. I am immersed in the market each and every day, and even I find myself scratching my head in uncertainty. Most affiliates I have spoken with confirm that with the amount of uncertainty and change, it is easier to take a “wait and see” approach until November 26th.

While not a bad approach, it would be smart to stay moderately informed. So never fear, resources are here!

1. PAS Regulated U.S. Markets Page – Wink, Wink, Hint, Hint……..PAS is aggressively working inside the U.S. market and is expected to be on the forefront of U.S. sub-affiliate offers. If you’re even slightly considering working in this market in the coming months, I’d get on the list here, and check back to the page often for more breaking news. Plus the Inside Scoop is published here, BONUS!

2. U.S. Online Gambling Industry Alerts on LinkedIn – This is a great group we put together that is growing every day. Any breaking or pertinent industry news with respect to the regulated U.S. markets will be posted in this group. If you’re on Linkedin, this is a group you’ll want to be in.

Existing Hurdles For U.S. Regulated Operators

While the U.S. market will take a giant leap forward with the opening of New Jersey on November 26th, many hurdles remain in place.

• Poker Liquidity Fear Leads to More Focus on Casinos – While all the talk has been about poker over the last few months, most operators are more focused on their casino offerings at the moment. In fact, we at the Inside Scoop have spoken with a few approved operators who will purposely be delaying their poker offering in favor of initially focusing on their casino efforts.

Unlike Nevada, New Jersey is expected to open with multiple poker platforms. Until a few brands break out as THE “Go-To” poker rooms for New Jersey residents, liquidity will be an issue. Operators that have existing strong casino platforms are going to grow their market share in this segment of the market first.

• Payment Processing – < 8% Visa Approval Rates – One operator confirmed to the Inside Scoop that payment processing, and most importantly credit card processing continues to be one of the largest concerns for operators preparing for the November 26th launch into New Jersey.

Although regulated and legal in New Jersey, there is no law forcing credit card companies to accept transactions from iGaming clients. While services like Neteller and Skrill will eventually launch into the market, the preferred deposit option for casual players will always be credit or debit cards.

• Geo-Location Issues – While companies like Locaid and others are very good at what they do, both regulators and operators are still concerned about initial glitches in the geo-location technology. With New Jersey bordering mega cities like New York and Philadelphia, there is no margin for error.

Likewise, geo-location to this scale and depth has never been attempted in the online gambling industry.

As you can see, the pump is primed, and the U.S. regulated markets are getting ready to further take off. This is truly an unprecedented time for online gambling in the United States. So buckle-up, and prepare for takeoff, the countdown has started. Will we experience turbulence on this adventurous ride? Only time will tell.

“Nobody knows how things will turn out, that’s why they go ahead and play the game…You give it your all and sometimes amazing things happen, but it’s hardly ever what you expect.

~Gennifer Choldenko

Where else can you find Jeremy?

Twitter@JeremyEnke

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