Celebrating 20 Years Of Online Poker

Steve Ruddock January 2, 2018 3356 Reads
Online Poker Turns 20

It’s hard to believe, but online poker just turned 20.

Suffice it to say, it’s been a wild ride for the industry and online poker players since Planet Poker dealt the first hand of online poker on January 1, 1998.

Over the course of those two decades:

  • poker has “boomed” and “busted”;
  • sites have risen to prominence and more than a few have fallen from grace;
  • individual fortunes have been made and lost, remade and lost again;
  • there have been multi-million-dollar cheating scandals; and
  • legalization efforts, government crackdowns, and indictments.

In this retrospective, US Poker will take a look at the different eras of online poker, and some of the major events that have shaped the online poker world as we know it.

Online poker’s roots

Someone always has to be first, and in the case of online poker, it was Planet Poker. But the roots of online poker predate Planet Poker’s launch by several years.

In the years leading up to the launch of Planet Poker, a group of hardcore poker players and enthusiasts would play something called IRC poker. IRC was short for Internet Relay Chat, a chat-room system created in the late 1980’s.

The IRC poker script was created by  Todd Mummert and Greg Reynolds sometime in the early 1990’s.

IRC poker was free to play and looked like a written hand history. How it worked was, players would receive 1,000 chips per day and instead of clicking buttons, they’d type in their commands (very high tech), and action would move to the next player.

IRC had many limitations. Players would have to first best limit hold’em games if they wanted to play no-limit hold’em, and it couldn’t support multi-table tournaments, so as many as 23 people might be playing the same hand.

IRC may have been rudimentary, but you make do with what you have. Plus it gave Randy Blumer, Mike Caro, and some other early pioneers the inspiration to create a real-money online poker game.

The result: Planet Poker.

By today’s standards, actually, by any standards, Planet Poker’s software was laugh out loud bad. But compared to IRC, it was a monumental step forward, even if it was buggy.

Planet Poker may have had the idea, but it would be the second generation of online poker sites that would turn online poker into a product for the masses.

The second generation

The number of second-generation online poker clients that launched between 1999-2002 is astounding. Even more so when you consider poker hadn’t boomed yet.

The first competition for Planet Poker came in the form of Paradise Poker in 1999 (which quickly overtook Planet as the number one site), but Paradise was just the tip of the iceberg.

Right on its heels were familiar names in online poker like Ultimate Bet, Pacific Poker, Inter Poker, Prima Poker, and current titans like PokerStars and Party Poker.

There was also a site called Poker Spot, which was the first to offer multi-table tournaments. The site was created by Dutch Boyd, whose biography is a must-read for anyone interested in the early days of online poker and the poker boom.

Poker Spot can also lay claim to a more dubious distinction, as it was the first scandal-plagued online poker site.

Poker Spot ran into payment processing issues, and instead of coming clean the site and Boyd figured it could weather the storm. In the end Poker Spot closed down owing players in the neighborhood of $400,000. This is covered in depth in Boyd’s book, Poker Tilt.

The poker boom

The 2003 WSOP coverage on ESPN is largely credited with creating the poker boom, but the sheer number of new online poker sites should have been a clear signal of what was about to happen. The proverbial storm cloud on the horizon.

Even without the 2003 World Series of Poker, poker was already booming, and it was because of online poker. And don’t forget that the World Poker Tour and Late Night Poker used the hole-card camera and predate the 2003 WSOP.

The 2003 WSOP was simply an accelerant.

A guy with the right back-story and name (Chris Moneymaker) who qualified in the right place (online at PokerStars) went on to win a tournament (The WSOP Main Event) that was being covered in-depth by a major cable network (ESPN) with nascent technology (the hole-card camera) for the very first time.

Put that all together and… BOOM. The poker fuse was lit, and all of the existing online poker sites were the biggest beneficiaries.

The early poker booms years were a shock to the existing crop of recreational and professional poker players who suddenly saw some of the worst poker players on the planet running, nay sprinting, to online and brick & mortar tables with fistfuls of cash and a dream.

The impact of the poker boom

For professionals, the early days of the poker boom was akin to always having a seat in a dream game. Anyone with even a modicum of poker ability was suddenly a big winner and never wanted to leave the table.

Online there were even more perks. A stream of never-ending deposit bonuses and promotions that savvy players used to pad their bankrolls with hundreds of risk-free dollars a week.

But the days of plenty wouldn’t last all that long.

The internet and online poker shortened the learning curve and allowed strategies to advance at a blistering pace. Within a few years, a lot of the old school players found the tables had turned and the game had passed them by.

The hunter was now the hunted.

By 2006 the fish were far less fishy, and because the stakes being played escalated early on, a lot of pros became victims of swings. Before they realized their opponents had passed them in ability they were already busto and out of the game or back grinding the low-limit tables.

By the time 2006 rolled around the game had changed. Poker was still booming but in a different way. And another major event at the end of 2006 would have lasting implications for poker, especially in the US.

UIGEA

In September 2006 a piece of legislation was attached to the Safe Ports Act that would have a lasting impact on online poker in the United States and across the globe: The Unlawful Internet Gaming Enforcement Act, or UIGEA.

UIGEA made it a crime for financial institutions to process illegal online gambling transactions.

The legislation caused publicly traded online gaming companies like Party Poker to pull out of the US market. That gave PokerStars and upstart Full Tilt Poker a huge advantage in the global market and the two quickly ascended to the number one and number two spots in the online poker hierarchy, with a combined market share of more than 75 percent.

The Full Tilt-PokerStars wars

By 2008, online poker was a two-horse race.

The US exodus, coupled with insider cheating scandals at Ultimate Bet and Absolute Poker left PokerStars and Full Tilt to battle it out for online poker supremacy.

The two companies were fighting for each and every player, which meant massive rewards and promotions for players.

Despite both companies spending freely, PokerStars constantly outmaneuvered Full Tilt, winning the battle virtually every step of the way.

The spending spree would ultimately spell the end of Full Tilt Poker when the US Department of Justice came down on the remaining US-facing online poker sites on April 15, 2011.

Black Friday

In addition to the immediate impact, UIGEA would make its presence felt five years later when it was used by the Department of Justice to seize the major US-facing online poker sites and indict key individuals.

Known as Black Friday in poker parlance, this was essentially the end of online poker in the US.

It was also the end of Full Tilt Poker, and mercifully, the end of Ultimate bet and Absolute Poker.

Full Tilt had been using player deposits to cover operational costs, and when Black Friday occurred there was the inevitable run on the bank by European customers and Full Tilt went belly-up owing hundreds of millions of dollars to its customers.

PokerStars not only made good on all deposits, it bought Full Tilt Poker and settled its debts when PokerStars reached a settlement agreement with the DoJ.

The new era of online poker

Online poker would return to the US a few years later when three states legalized online gaming:

But the return has been slow (Pennsylvania became the fourth state to legalize online poker in 2017, but isn’t expected to launch websites until the second half of 2018) and US online poker is a shell of its former self.

Online poker is still a thriving industry, but the early days of online poker are long gone, in the US and beyond.

The industry is now mature and signups and player-pools have stabilized.

Without a never-ending influx of fresh players, operators have shifted strategies from growth to maintenance.

In the modern poker era:

  • Online poker sites have been consolidated to a few key operators, all of which also offer online casino and sports betting.
  • With two decades of experience, operators have optimized their promotions and rewards, ending the practice of “bonus whoring.”
  • The online poker market is no longer a single global pool, as more and more countries legalize online poker the industry continues to become more balkanized.
  • New, hybrid products like Spin & Gos are being created.

What’s next?

Where online poker goes next is anyone’s guess.

there are reasons to be optimistic:

  • It looks like US expansion efforts will continue.
  • Interstate and international liquidity sharing agreements are starting to take place.
  • There is a budding “poker war” brewing between partypoker and PokerStars.

But if we’ve learned anything over the past two decades it’s to expect the unexpected.