AP/DowJones on Gambling legislation: Banks say regs aren't that strict

[schwza]

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Nate,

A couple of days ago you said you would be surprised if you were still playing online poker in a year. Has your opinion really changed that much given what we're able to gather from today's announcements?

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I've said this to a couple of people offline, but there are basically three phases here.

1) Next 4-6 weeks: complete chaos as players read and react to the moves and move money around to new sites. It may be hard for the games to reach "critical mass", especially the mid-high LHE games that I prefer. There may be some odd, tilty, expolitable game textures here and there, but generally things will be rough. I do expect some crazy bonus offers, though.

2) 6 weeks-9 months. Things settle down as traffic gravitates to new market leaders. I think FullTilt will pretty clearly be one of these, as will PokerStars if they remain in the game. In my opinion the games will be tougher and earn rates per hour will be somewhere between 40-80% of what they would ordinarily be for expert players.

3. 9 months+. Depends on three things: (1) what happens with the banking regulations; (2) the extent of enforcement actions by the Department of Justice; (3) the willingness/ability of poker sites to advertise. I think there are scenarios in which the games are at full strength in 12-18 months and scenarios in which they're almost unplayable.

As for me personally, I don't know what I'll do, but I'll probably do what the rest of you do.

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this is the most optimistic and trustworthy analysis i've seen. if i could keep making 40-80% of what i'm making now and i wouldn't have to move to belize that'd be great.

[ffredd]

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I think Party's statement had more to do with putting a stop to their free-falling stock price than anything else.

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I'm not convinced that kicking out 75% of their customers is going to keep the stock price up.

[shockdaworld]

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Nate,

A couple of days ago you said you would be surprised if you were still playing online poker in a year. Has your opinion really changed that much given what we're able to gather from today's announcements?

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I've said this to a couple of people offline, but there are basically three phases here.

1) Next 4-6 weeks: complete chaos as players read and react to the moves and move money around to new sites. It may be hard for the games to reach "critical mass", especially the mid-high LHE games that I prefer. There may be some odd, tilty, expolitable game textures here and there, but generally things will be rough. I do expect some crazy bonus offers, though.

2) 6 weeks-9 months. Things settle down as traffic gravitates to new market leaders. I think FullTilt will pretty clearly be one of these, as will PokerStars if they remain in the game. In my opinion the games will be tougher and earn rates per hour will be somewhere between 40-80% of what they would ordinarily be for expert players.

3. 9 months+. Depends on three things: (1) what happens with the banking regulations; (2) the extent of enforcement actions by the Department of Justice; (3) the willingness/ability of poker sites to advertise. I think there are scenarios in which the games are at full strength in 12-18 months and scenarios in which they're almost unplayable.

As for me personally, I don't know what I'll do, but I'll probably do what the rest of you do.

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Nate, Your posts have been a great help to everyone and I appreciate all the work you've done. You will not spend a dollar of your newly withdrawn party money if we happen to be in the same area at any time in the near future.

I disagree with these predictions though, and was wondering if you could elaborate on them any further. I would like to get into further detail, however I have been trying to 'cope' with all the recent developments and am going to the bar. Basically I don't believe enough 'recreational players' will be involved in the short term, within the next 6 months say. Not enough recreational players in comparison to good players anyways.

[stormy455]

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So the poker rooms have to decide, in essence, whether they care or not that they're breaking US law. Party Poker and 888, large publicly-traded corporations based in the United Kingdom, have decided that they do care, in part because UK authorities are more likely to cooperate with US authorities on these matters and in part because shareholders aren't likely to think favorably of a business that is arguably illegal.

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Your analyses seem pretty astute and I'd like your opinion on a thought I had about why party will be shutting it's U.S. facing operations. I think that this may be a political move on their part. Could party be trying to effect change after the fact by shutting us out cold-turkey as soon as the law is signed? As many of us have noticed, very few people seem to be aware of the new legislation. Imagine the surprise many people will get when they log into their account and are told that they are not allowed to play on real money tables due to new federal laws. Perhaps party is hoping for a very loud and angry reaction with the election coming in just a few weeks time. If there really are 25 million online poker players, and we all decide to take action we could be a force to be reckoned with. Maybe they've decided that pushing us into action and getting a long-term solution will be worth the short-term hit to their stock price. Of course, it may just be wishful thinking on my part.

[Nate tha\\\' Great]

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this is the most optimistic and trustworthy analysis i've seen. if i could keep making 40-80% of what i'm making now and i wouldn't have to move to belize that'd be great.

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The one caution is that effects of tougher gameplay won't be uniform across the board. Let's say everyone loses .5 BB/100 from their winrate, which I think is reasonable. That's much more devastating for a 1.0 BB/100 winner than a 2.0 BB/100 winner. Although this may be mitigated some if the sites reduce their rake, which I think is somewhat possible -- the airlines reduced their fares after 9/11, after all.

[HSB]

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Basically I don't believe enough 'recreational players' will be involved in the short term, within the next 6 months say. Not enough recreational players in comparison to good players anyways.

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What if the regulations don't touch Neteller, or if they do touch neteller, that they leave some other payment method untouched. The fish will just move over to Full Tilt. As long as Tilt can handle the increased player load we're all good.

[Nate tha\\\' Great]

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So the poker rooms have to decide, in essence, whether they care or not that they're breaking US law. Party Poker and 888, large publicly-traded corporations based in the United Kingdom, have decided that they do care, in part because UK authorities are more likely to cooperate with US authorities on these matters and in part because shareholders aren't likely to think favorably of a business that is arguably illegal.

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Your analyses seem pretty astute and I'd like your opinion on a thought I had about why party will be shutting it's U.S. facing operations. I think that this may be a political move on their part. Could party be trying to effect change after the fact by shutting us out cold-turkey as soon as the law is signed? As many of us have noticed, very few people seem to be aware of the new legislation. Imagine the surprise many people will get when they log into their account and are told that they are not allowed to play on real money tables due to new federal laws. Perhaps party is hoping for a very loud and angry reaction with the election coming in just a few weeks time. If there really are 25 million online poker players, and we all decide to take action we could be a force to be reckoned with. Maybe they've decided that pushing us into action and getting a long-term solution will be worth the short-term hit to their stock price. Of course, it may just be wishful thinking on my part.

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I don't buy any of the conspiracy theories related to Party's announcement today. Too many of the customers they lost today are never, ever coming back.


btw, being stuck in the airport is fun. Go, weather!

[redbeard]

nate as far as the rake decreasing i can see that side of the arguement but i can also see them saying we are still going to keep our foreign audience and need to increase our revenue so let's up our rake another dollar the average degenerate won't pay attention to this. who knows just a thought.

[Nate tha\\\' Great]

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I disagree with these predictions though, and was wondering if you could elaborate on them any further. I would like to get into further detail, however I have been trying to 'cope' with all the recent developments and am going to the bar. Basically I don't believe enough 'recreational players' will be involved in the short term, within the next 6 months say. Not enough recreational players in comparison to good players anyways.

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I agree that the number of recereational players will be fewer. Although, "recreational player" isn't necessarily the same thing as "fish". The irony is that the guy who loses $100/month at Party Poker probably won't bother to redeposit somewhere else, but the guy who loses $10000/month probably will.

[redbeard]

very good point regarding "recreational player" vs total degenerate fish.