Conspiracy Theory: Put on Your Tin Foil Hats

[dedmoney]

Well, regardless of what goes on with IG and such, I know for a fact that hotel companies are planiing on taking over the world.

The marriott in bmore, right on the water was built with all the infrastructure to get a gambling operation up and running very quickly, for stuff like the network and security systems and such.

I've got to assume that a lot of hotel/gaming companies have confidence that they will be able to expand their legalized gaming to a lot more places.

I hope this is true.

[woodguy]

The London Telegraph agrees as well"

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But the industry is dominated by UK companies. With this move, Congress has destroyed the existing edifice of American online gambling, however creaky its British foundations. Given the demand in the States, the next move, I suspect, will be for American legislators to rebuild the industry based on a new set of regulations creating an online business dominated by American gaming companies.

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Here's a link to the whole article.

My tinfoil hat is now warm,
Woodguy

[Teetster]

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2b. Casinos start up their own versions of online poker. American casinos quickly gobble up the U.S. market.
2c. The U.S. government gets hundreds of millions of dollars in tax revenue.


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I would think most online poker players (especially now) would be happy to see the above take place.

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This would have been a good outcome, I agree. We'll see in 10 years if it actually happens...

[woodguy]

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Honestly, I think that if last week, Harrah's was able to open their own online poker room legitimately in the midst of Party's dominance, Party would be done for. Assuming Harrah's room was on the up and up, they could launch a huge ad campaign saying as much, discrediting Party's trustworthiness.

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The cost of such a marketing effort is very large. Plus, opening up at the same time the US is shutting down foreign companies who are already active in the market is next to impossible. There would be injunctions, lawsuits, appeals to the WTO, and lots of messy business were the US gov simply to say "all foreign companies get out, all US companies get on"

Even if they could do this, there is no guarantee that Harrah's traffic would even come close to Full Tilt in the first year, let alone Party or Stars.

Full Tilit is probably the best late comer start up to use as a model. They have cache (as would Harrah's) and credibility with the current consumers (poker players). They have spent millions on marketing, and in the 3 (?) years they have been a going concern, they still do not have 15% of the market.

Just because Harrah's is Harrahs is no reason to assume massive, cheap and immediate market penetration. They would have to earn their online customer just as much as everyone else. They would have a head start over a "cold" start up with no reputation in the industry, but that doesn't amount ot "killing" Party or Stars anywhere in the near future if they had to compete head to head.

Most poker players have a slight (or more) distain for Harrah due to the crappy way we all get treated at the WSOP. To say they can step into a market and dominate it with a simple ad campaign just simply isn't true.

Would Harrah's do well with a cold start? Most probably, but it would take a long time (and time=$$$) and a lot of marketing $$$ to come even close to the industry leaders.

Lucky for them that they now probably do not have to face those obstacles.

Regards,
Woodguy

[woodguy]

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This would have been a good outcome, I agree. We'll see in 10 years if it actually happens...

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I don't see why it won't get done by the end of 2007 or early 2008.

Regards,
Woodguy

[sam h]

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Honestly, I think that if last week, Harrah's was able to open their own online poker room legitimately in the midst of Party's dominance, Party would be done for. Assuming Harrah's room was on the up and up, they could launch a huge ad campaign saying as much, discrediting Party's trustworthiness.

[/ QUOTE ]

The cost of such a marketing effort is very large. Plus, opening up at the same time the US is shutting down foreign companies who are already active in the market is next to impossible. There would be injunctions, lawsuits, appeals to the WTO, and lots of messy business were the US gov simply to say "all foreign companies get out, all US companies get on"

Even if they could do this, there is no guarantee that Harrah's traffic would even come close to Full Tilt in the first year, let alone Party or Stars.

Full Tilit is probably the best late comer start up to use as a model. They have cache (as would Harrah's) and credibility with the current consumers (poker players). They have spent millions on marketing, and in the 3 (?) years they have been a going concern, they still do not have 15% of the market.

Just because Harrah's is Harrahs is no reason to assume massive, cheap and immediate market penetration. They would have to earn their online customer just as much as everyone else. They would have a head start over a "cold" start up with no reputation in the industry, but that doesn't amount ot "killing" Party or Stars anywhere in the near future if they had to compete head to head.

Most poker players have a slight (or more) distain for Harrah due to the crappy way we all get treated at the WSOP. To say they can step into a market and dominate it with a simple ad campaign just simply isn't true.

Would Harrah's do well with a cold start? Most probably, but it would take a long time (and time=$$$) and a lot of marketing $$$ to come even close to the industry leaders.

Lucky for them that they now probably do not have to face those obstacles.

Regards,
Woodguy

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I think you are actually underestimating how difficult it would have been for Harrah's to gain penetration. Online poker is a classic case of "network effects." The value of the product to the consumer is mostly a function of how many other consumers are using the same product, and once you have a giant like Party it is almost impossible to gain substantially on them unless they really screw up (a la friendster). This is basically the same situation with eBay. There is a reason Google or Microsoft can't just spend a bunch of money and dominate that market.

I am on the fence regarding the conspiracy theories, but I think that its absolutely clear that the only way for a Harrah's to get into the online poker market as a major player was to use other (read: political) means to disrupt or destroy the currently entrenched consumer networks.

[woodguy]

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This is basically the same situation with eBay. There is a reason Google or Microsoft can't just spend a bunch of money and dominate that market.


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Excellent example.

I agree.

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I think that its absolutely clear that the only way for a Harrah's to get into the online poker market as a major player was to use other (read: political) means to disrupt or destroy the currently entrenched consumer networks.

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Agreed again. Way, way, way easier, cheaper, quicker, and with much deeper market penetration than going with a start up.

Regards,
Woodguy

[That Fish]

The only way this makes sense is if the government had a plan all along to legalize IG and regulate it to capture all the tax they think they are missing out on.
It was too small to really worry about before, now it's too big to kill off.

Problem is all the major casino's here don't have a foothold, and really can't expect much of one. That and any republicans have a hard time convincing their constituants it's a good idea.

So how to save face and still get what you want?
Pass a useless law that sounds great but never gets enforced (banks claim after it's passed it's too expensive/impractical to enforce). It also gives a guy with presidential aspirations a soundbite about how he's protecting the public from this unregulated evil.

Meanwhile you create the opportunity for american run companies to get their share, the republicans can then say, 'hey look, we tried but there is just no way to do it' so the only way is to legalize it and tax those sinful bastards.

Of course this all assumes that they've already studied how much tax revenue it represents and more importantly how much it would need to be to get votes to pass. There are probably some kickbacks involved as well, but that's business as usual...

Problem is, I don't think there is anyone in our govt. that is smart enough to pull it off...

[alex-star]

As in anyone in the internet business knows, Google/Yahoo traffic can be bought if you have the $$$ to spend.

[ACW]

Also, should the law get overturned (WTO or whatever means), Party Gaming could turn out to be a great buy right now.