US Facing Offshore Poker Sites Moving Towards Sports Book Mentality

John Mehaffey October 15, 2013
US Facing Offshore Poker Sites Moving Towards Sports Book Mentality

The face of the US online poker industry has changed at several points during its 15-year life.  The biggest contributing factors were the Unlawful Internet Gambling Enforcement Act and Black Friday.  The online poker industry has always learned to adjust.  The biggest hurdle currently facing it is access to reliable and legitimate payment processing.

One other factor facing the US-friendly offshore poker sites is that regulation in the US is inevitable.  Three states have already regulated online poker and many more are expected to do so in the coming years.  The PPA predicted California, which is 12% of the US population, will legalize it in 2014.  Offshore sites could see an instant impact if California players are given regulated poker options.

Offshore poker sites have responded to this by becoming diversified gaming companies.  Gone are the days of poker-only sites like PokerStars and Full Tilt Poker.  Poker has become a secondary offering to sports and casino games. 

Sports betting is the next logical step for US-facing sites.  It is only legal in two states.  In Nevada, serious players have been known to keep offshore sports betting accounts open.  This is due to the fact that Nevada sports books tend to offer similar odds.  The opportunity for line shopping, which means searching for the best line available for a particular wager, is expanded when offshore sports books are added to a serious Nevada sports bettor’s options. 

Delaware, the only other state with legalized sports betting, offers parlay cards on NFL games. There are no other sports betting options in Delaware.

Offshore sports books enjoy a monopoly in the other 48 states.  It will stay that way unless New Jersey prevails in its lawsuit with the major sports leagues and the US Department of Justice.  Even if New Jersey prevails, it could be years before other states expand into sports betting. 

It is no secret that sports books have a love/hate relationship with poker.  It is a necessary evil to diversify gambling options that keep deposits flowing.  The issue lies in that the most valuable customers, those that play negative expectation casino games and make square sports bets, are often the worst poker players at the table.  Money that could be won by the sports book gets taken out of the system by experienced poker players when these whales try their luck at poker.

A poker room takes rake from almost every cash game pot and charges a house fee on all tournament entries.  A player sitting at a full ring online poker table with a $10 average pot is paying about $4 an hour in rake.  The same player would have a theoretical loss of $4 in less than ten minutes of playing $10 a hand blackjack, assuming basic strategy was used and the player was bankrolled well enough to not fall victim to risk of ruin.  Most online casino players will not have the proper bankroll available or the skills to fall within theoretical expected losses.

A sports book has a $4 theoretical win from an $80 straight bet.  Parlay and teasers would bring the wager required to produce a $4 vig down to about $40.

How Sports Book Combat Experienced Poker Players

A sports book mentality applied to a poker room can create a negative experience for serious poker players.  Bovada and its sister site Bodog removed several features that are important to many professional poker players.  The Bodog Network does not display usernames at the table.  This removes the ability to use a Heads Up Display, referred to as a HUD, or effectively datamine games.  Players on the network cannot sit on waitlists to enter a juicy game because full tables cannot be seen in the network’s lobby.

The Winning Poker Network is closely related to Betcris and Bookmaker, one of the largest sports book groups in the world.  TheBeast is the main promotion offered by this network.  It is essentially a prop program where high volume play is rewarded.  While this promotion may appeal to professional players, it appears to be more geared towards keeping players seated at tables longer than intended.

Merge Gaming has become a divided network.  It consists mostly of sports books that service the US.  Sportsbook.com and PlayersOnly segregated its player pool from the other skins in an apparent attempt to protect its whales.  It took the same action when it was a member of the Cake Network.  Some network skins have substantially dropped player rewards.  High limit games were removed from the software and the rake jumped at many of the higher limit games that remain.  Rakeback was banned on the network in 2012.  All of these moves would appear to be attempts at discouraging action from serious poker players.

Juicy Stakes, a struggling Revolution Gaming skin, was acquired by Zagox Management.  Little is known about the company but Intertops, a strong Revolution Gaming skin, has clearly endorsed the acquisition by combining its player pool with Juicy Stakes.  This has led some to speculate that Juicy Stakes or maybe the entire Revolution Gaming Network is now owned by a major sports book.

Reduction in Rewards Hurts Breakeven Players the Most

The reduction of player rewards does not affect the most skilled players as much as those in the middle.  Breakeven players often rely on rakeback or other promotions to stay in the game.  Without some form of player kickbacks, these players go broke and stop playing.  Sports books may actually want this if these players are not giving action in the sports book or casino. 

Sports books becoming the main operators of US-facing poker rooms can be seen as a positive situation.  These companies tend to have substantial experience in payment processing and other facets of the industry.  This provides more security for player funds, especially as online poker becomes more of an afterthought to operators.     

 

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