| woodguy |
| (Dead Tree Walking) |
| 10/03/06 08:23 PM |
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Re: Conspiracy Theory: Put on Your Tin Foil Hats
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Quote:
There are major differences between IG and Ebay.
New US based poker sites can give signup bonuses and rakeback deals. Every bonus whore will be there in the first month. Ebay can give minor discounts on shipping or whatever, but nothing like a 100% deposit bonus.
There is a huge market that has avoided IG because its offshore and they dont trust their money there. It comes in more slowly than the current market, but they will be there within a year. Ebay has never had those barriers so a new company cant exploit them.
Legalize IG and credit cards become a funding vehicle. Very few CC companies permitted their use before the bill. Ebay has never had that problem, and a new company doesnt have that competitive advantage.
IG in the US has a huge B&M tie in possibility. A competitor to Ebay is still strictly online.
IG has a large base of ancillary products and publications supporting the market. Advertising with them is free or cheap. Eg PokerTracker immediately sets up databases for the US sites, because of the huge market. Maintenance of the offshore sites is far less profitable. CardPlayer, Bluff and the other magazines will have articles covering the new sites even before they open. The Ebay product doesnt have that satellite business that a new competitor can exploit.
I too have no doubt that when the B&M casino organizations get involved in IG, they will do it very well and hopefully bring a level of professionalism that is sorely lacking in most sites.
My point is that regardless of how good they are, they cannot hope for easy, inexpensive market penetration.
I disagree with you that acheiving deep market penetration would be cheap. Its my understanding that the lifeblood of any IG business is new players and high volume players. Neither are cheap or easy to get. Industry mags may be cheap, but television spots and dragging volume players to your site and retaining them isn't.
I think we also have to remember that if the conditions existed as you stated (IG being legal etc), that there would be hundreds,of new IG sites being set up in the US and abroad to attack the legal US market. Harrah's. Mirage, and any others, while having instant brand recognition, would still be one of many, and would be fighting for market share in a very diluted market.
I think they would be successfull, but not instant smash hits. Not when established companies will still work like hell to keep their customers and start upping the ante on rakeback etc, which will drive down margins etc.
No one with large marketshare is going quietly into that goodnight just because new competitors are around. Margins start to erode as costs of getting and keeping customers increase as the established players up the ante on the latest offer from Harrahs etc, etc.
I have no doubt large B&M gaming organizations will do well, but in an open market it would be a pretty good fight.
Quote:
There are even good examples within the history of IP. Paradise was the first major player and had something like an 18 month lead before other sites really started popping up. Within 6 months of the market really opening up Paradise was a minor player.
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The fact that Paradise took their market position for granted doesn't mean that Party, Stars, etc, would also do it. In fact, since they were the ones who took Paradise down, they would already know the pitfalls and be ready.
Imagine a regulated US market and the amount of competition that would fight for it. It would make the competition that Paradise faced pale in comparison.
I agree that B&M's would probably do a good job, but its nothing anywhere near the steamroller job they could do if they opened up in a protected market of US competitors only, especially if they were able to purchase customer lists and buy established clientelle. Then they would own the market so completely that it would be very difficult for the current IG players to get their foothold back.
Regards,
Woodguy