The death of the Poker Network model Part 1

With competition rampant in the online poker market, and with large player-pools one of the most appealing features for any site, the idea of a shared player-pool used by poker networks seems like a great idea, but is it really? After a number of rooms closed their doors –some more auspiciously than others– are poker networks really on the way out? I would argue the answer to this question is yes, and that the poker network model was never sustainable in the first place.

Over the past year to two years a number of skins at various online poker networks have folded or simply been absorbed by larger skins on the same network. Yes, there may still be hundreds of small poker sites in operation across a dozen online poker networks, but realistically only a couple dozen of these poker rooms have a user-base that is worth noting.

Taking a trip back to the mid-2000’s, when independent sites really started partnering up with one another and forming poker networks, will demonstrate where the trouble began. At this time a poker site was basically a self-sustaining entity; if you were even capable of running an online poker site into the ground back in the early days of the poker boom you probably couldn’t turn on a computer in the first-place. Basically, during this time frame an online poker site really couldn’t do anything to bankrupt their business. Some were run better than others, but virtually every online poker room was turning a profit.

So, while joining forces to go to battle against the big dogs of the online poker world like Party Poker (which had skins of its own at this point, like Empire Poker), PokerStars, and Full Tilt Poker seemed like a good idea, in the end it may have led many of these poker networks to stagnate their growth; lowering their own ceiling so to speak. Now, I’m not saying that forming strategic partnerships is always bad, or that every poker room needs to remain independent, considering there are plenty of examples of partnerships that work, but this is because all of the parties involved are on the same page and are all astute businesspeople.

That being said, this is the exception and not the norm in online poker. For the most part networks are not two, three, four, or even five profitable online poker rooms that have decided to partner-up. Most poker networks have a handful of “good” skins, and then a dozen to a hundred poor-performing skins; it seems the only requirement for membership at some poker networks is a website and the ability to write the phrase “First-Time Deposit Bonus.”

So instead of actual rivals joining forces what you end up with is “good” poker sites allowing smaller sites (some of which may be poorly run) to piggyback off their success, all in the name of adding a couple dozen players to their player pool. I understand that sites have to start somewhere, but in an already supersaturated market hard work and the best intentions aren’t enough to breakthrough –Sites like Victory Poker, Unabomber Poker, and Hero Poker were all seemingly quality products with hard-working executives and marketing departments, and they have all gone by the wayside.

Some networks do things the right way; for example, there is a lot of value in adding a huge sports-betting site to your poker network even if they have only a dozen active poker players on their site. Suddenly the sports-book has a viable poker room and the poker network has opened a potential new market. This is a case of a network being a win/win, but this is not the norm.

So this is where we currently stand in terms of poker networks, but the question going forward remains; Can poker networks overcome the challenges face and turn something that is good in theory into something that works on a practical level?

In Part 2 of this series I will take a look at the two key issues I see with the poker network model.