In this week’s episode of the pokerfuse podcast, Nick and Mike take a look at major software client updates from PokerStars, partypoker, WPN and MPN; the pair reveal some exclusive details about PokerStars’ planned online poker launch in Pennsylvania; and they dig into the numbers from 888’s latest financial results.

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Full Transcript

Mike Gentile: Hello and welcome, everybody, to the Pokerfuse Podcast. It is September 12th, 2019. This is Episode number 27. I am your host, Mike Gentile, along with my co-host, Nick Jones. Today on the podcast.

Online poker operators introduce a new wave of improvements to the online poker platform.

We have new information about what will be PokerStars Pennsylvania.

Revenue at 888 Poker continues to decline.

Software updates from the major online poker operators

Nick Jones: We are in the full swing of September online tournament series. Some $200 million is going to be paid out in prize money over the next two or three weeks across all the major online poker operators. Something interesting that we saw, just ahead of this coming out, is most of the major online poker operators deploying new client updates, new improvements, mostly to desktop platforms, and in many cases, focused on improving the tournament series ahead of these big MTT festivals.

Mike: What kind of improvements have we seen from the operators, and who’s been making those improvements, Nick?

Nick: Not to get into too much detail. Perhaps the one that we expected. I think we might have talked about it on the podcast. We did content on this a couple of months ago, with PokerStars releasing a show stack in big blinds, which is a feature that exists in other operators. Partypoker have had this for a year, Winamax have had this for a couple of years, I believe. It allows you to show your stack rather than chips or in dollars, you can show it in terms of the number of big blinds that you’ve got, which you can do at catch game tables, as well as tournaments. It was particularly useful in tournament and sit and gos .

Mike: That feature, that’s been around in the other online poker rooms. Is this just PokerStars playing catch up, and if so, why has it taken so long?

Nick: Yes, it is to an extent. I think it’s one of those features that you’re never sure whether— If the operator sees it, there’s cons to adding this feature. I think from the player’s perspective, it’s obviously something you want to have. It makes it easier in tournament, obviously, when blind levels go up. You’re always doing calculations in the back of your head in terms of how many stacks you have gotten. How many big blinds you and your opponents have got when making your decisions.

Maybe from the operators’ perspective, they feel it’s a little bit too beneficial to serious and professional players, and it’s an option that might be confusing to recreational casual players. Obviously, PokerStars got to the point where they realized that this is a required feature. It’s something that third party software has offered for a long time. It kind of levels the playing field in the sense that you don’t need to purchase other software.

I was just reading PokerStars’ statement when they released the information. You know your stack compared with the current blind that it is such critical importance that forcing people to make a mental calculation seems somewhat redundant when we can make that calculation for them. Yes, it’s definitely something that makes a lot of sense. It’s going to be used by a lot of tournament players, I think across the spectrum. Yet in some extent, it could have been released five years ago. It’s obviously nice to see that they’ve released it now.

Mike: Are there any other major operators where this feature hasn’t been implemented?

Nick: Yes, certainly. 888 doesn’t have it. I don’t think Unibet has it, though there might have been a discussion of adding. I don’t believe MPN has either. It’s not like ubiquitous feature that PokerStars was really lagging behind. The other interesting aspect, and this touches on, or maybe we should just discuss briefly some of the other upgrades we’ve seen.

Partypoker did a software upgrade which, if anything, I think the biggest change was to Mac users. They really brought the Mac software up to parity with what was on Windows. I think it lagged behind quite a lot for many years. That is just a much better piece of software across the board. They’ve added a few new features to Windows as well, again, focused in improving the tournament display.

There’s a new in the money indicator, a traffic light in the corner that goes amber when you’re getting close to the bubble, and then goes green when the bubble pops, which is kind of cool. There’s more information about average chip count and average stack. I see, again, useful features for all players, but I think perhaps more serious players to get in and have more information at their fingertips. That was a welcome upgrade, and I think that that upgrade went smoothly.

Mike: We’ve got PokerStars, we’ve got Partypoker. Who else implemented some changes?

Nick: We wrote about today on pro actually WPN America’s card from the US facing offshore online poke site. They upgraded their platform. A big upgrade that’s been in the works for a couple of years, I think was beset with problems when they did roll out a few months ago. That has gone live properly now for real money. That’s a major platform overhaul. MPN as well, pushed out an incremental update, but again it’s similar to what Partypoker did. There’s lots of more improvements in terms of information display at the table. There’s a new chip stacks bowl. It shows the average and the median stack size.

An interesting unique feature MPN added, is they’ve added target stack information. Apparently, I wasn’t aware of this at all, but the new poker satellite strategy book by Barry Carter and Dara O’Kearney, I think, that came out like a year ago, and they apparently, again I haven’t read it, but they created this new property called target stack, which is the stack so as you should aim to have if you want to make the money. I’m not quite sure what the calculation is based on, but this has been adopted into the NPN clients. It’ll show you your target stacks. I thought that was cool.

Mike: Yes, that’s quite interesting. Kudos to those guys for having an impact on the industry. I wonder if we’ll see that implemented at other rooms as well. It sounds like we’ve had, I won’t call it a minor update, but a feature update over PokerStars. It sounds like the PartyPoker one has been quite more substantial, and you said WPN was a complete overhaul, correct?

Nick: WPN was a complete overhaul. MPN was a incremental update. Certainly the common thread between the three-dot com online poker rooms is improving information display at tournaments. It’s interesting because I think if this was at cash games, you don’t really see that kind of investment in cash games. It’s a place where if anything, the updates that we’ve seen has been discouraging either implicitly or explicitly high volume players from playing. Perhaps most famously this year’s PokerStars’ reduction on the maximum number of cash game tables you can play at one time. That’s directly saying we don’t want people playing extremely high volume on our cash game tables. You don’t see that in tournaments. Still in tournaments, liquidity is absolutely the dominant factor. Online poker operators want high volume players building these price pools.

We’re seeing these features which ultimately help you play a lot of tables at the same time. If your stack sizes are in big blinds, automatically that makes it much easier when you’re playing multiple tables. If you can see at a glance the average stack size, the media stack size, the target stack size, whole new variable, that makes it easier playing 12 tables, playing 20 tables and quickly switching between MTTs. This coming ahead of the big September tournament season really goes to show the operators one these high volume players at their tables, which is a real difference to what we’re seeing in cash games.

Mike: It seems to me that the industry has been moving towards reducing the amount of high volume players, and now we’re seeing improvements to the software that are there that will, I won’t say primarily benefit, but I would say benefit high volume players more than perhaps recreational player. What do you attribute that to?

Nick: Again, I think it’s in cash games you have this predatory nature of high volume players hunting out weaker players, playing lots of tables, slowing down the action and creating this apparent environment that’s unenjoyable for casual players playing fewer tables. Where in tournaments, either you don’t have that, or the benefits of a high liquidity offset the downsides. People want big guarantee price pools, operators want big guaranteed price pools, and players, they want a lot of players in tables, so they want people playing as many tables as possible. You don’t get that negative perception, at least at tournaments.

Mike: I wonder if it has anything to do with the amount of money that recreational players could lose too. It strikes me that their bankroll is more at risk at a cash game table than it might be at, say, a $10 or a €10 buy-in tournament, where these tools are implemented for the higher volume players. I wonder if keeping that money on the side has played a factor in this decision.

Nick: Yes. Tournament’s just aligned with the marketing message of the industry across the board. You can wager a small amount, you can win a large amount, you have less money at risk. It creates big stories, big winning moments. It’s just not the same cash games. Yes, more and more, two-thirds of revenue now comes from tournaments, at a rough estimate. That might have increased further recently, particularly with the proliferation spinning goes and that kind of thing. MTTs in terms of the top line banner size total guarantees, grows bigger and bigger every year, despite the industry as a whole being stagnant or best really in many markets.

Yes, we’re seeing this increasing shift away. I wonder if we get to the point where operators feel that the downsides in cash games of certain types of players applies to tournaments, because high volume players playing 24 tournaments still slow down the action. Particularly, these are still full ring tables. In a lot of cases, games can get very, very slow. Tournaments can stretch on well into the early morning, eight-hour, ten-hour sessions. It’s not like they’re completely immune to super high volume players, but as it stands right now, the rush is still on to attract as many players of any type to your tournaments to play your big MTT festivals.

Mike: Yes, that’s a really good point. It really makes me wonder if perhaps a lot of the spin that we’ve been hearing, or a lot of the message that we’ve been hearing about trying to speed up games for recreational players was just that spin. Perhaps it is more related to keeping the bankrolls of those recreational players safe or guarded as it were, against the high volume players that can, in an Olympic game, wipe out a player’s complete bankroll rather quickly.

Nick: Yes, of course, the counter point to that is, there is still, in WCOOP, there are five figure buy-in tournaments which allow re-entry. That’s going to be the entire bankroll of many, many people. You can absolutely spend your entire bankroll in one weekend of playing a mix of KO series events or whatever. It’s not like it’s there, but then I guess it’s the point at that point of decision of buying into a tournament. No many people are going to go yes, let’s put all my money on the line. But of course, if you get to that cash game, and things can run away with you pretty fast if you’re doing auto top up on your stack and that kind of thing.

Yes, this is the thing I think we talked about just a few weeks ago, at some point, every year bigger and better and larger. The tournaments has to stop, has to come to it. Unless the industry returns to growth, then this year over year, increasing guarantees has to come to a natural end. We’re probably a couple of years away from it still, because I think numbers are still low. WCOOP could easily be $100 million guaranteed festival right now. It would clear PartyPoker doesn’t cover his guarantees right now, but that doesn’t seem to stop them increasing it.

At some point, it’s probably going to come to a natural end. Then maybe we’ll see operators starting to consider the types of players we’re attracting to the tables. In the meantime, yes, we’re seeing product updates that are helping players play more and more tables. As September, tournament series are in full swing.

Exclusive details on PokerStars’ Pennsylvania launch

Mike: Over on the US side, we’ve had some pretty exciting news hitting the wire this week. With a sneak peek at PokerStars in Pennsylvania. We were able to snag some screenshots and decipher some information. Some of which we’ve reported on over on Poker Fuse, and some of which will be coming in, in future articles, probably next week, to give people some information on what they can expect when PokerStars eventually does go live in Pennsylvania, as what we believe will be the very first online poker room in that state.

Nick: Tantalizing stuff. Top line, what did we learn from spying this pre-release version of the PokerStars Pennsylvania client?

Mike: I’m sure there’s a bunch of things that we learned, some interesting, some not so interesting. One of the things that we see in Pennsylvania that’s a little bit different than New Jersey is just the prominence of the branding of the land-based casino partner in the software. Something that we didn’t see as prominent in New Jersey that we are now seeing, for example, with PokerStars. We do see that Mount Airy is right up there in the Lobby with their logo.

Nick: That was something that’s required by the regulations right, that it’s the branding of the local partner is prominent. Something that I think some commentators speculated on was that this wouldn’t be branded PokerStars at all, but it would be like a Mount Airy poker or something like that. That’s not the case, is it? It’s clearly PokerStars, but just next to that is the Mount Airy logo.

Mike: Clearly PokerStars, and just alongside, I guess you might call it co-branded with the Mount Airy Logo as well.

Nick: Also beyond the logo, the client itself, it looks like the PokerStars client. Same colors, same buttons overall, same type of layout as you’d see in New Jersey, you see in the UK.

Mike: There is the appearance, at least right now, and this could change before it gets to launch, but there is the appearance of the Pennsylvania State flag in the lobby. It is basically the same client that we have seen in New Jersey and in the dot com market for PokerStars, yes.

Nick: What else can we glean at all from the games that might be on offer when Poker does go live in PokerStars Pennsylvania?

Mike: I need to be careful here not to divulge too much information, because we do have some additional articles coming out with more information than we’ve already published over on pokerfuse . If you take a look over at the article, you can see an image of the lobby with some cash games. We can see the approximate stakes, or at the very low level, there is some penny poker that’s happening over at the cash games. We can see some of the types of games that are being offered. For example, there are going to be spin and goes. We do not see zoom poker, so there is no tab for zoom. That is one of the differences between what we see in the dot com market. It’s not too surprising, we also do not have zoom in New Jersey either. This is probably a little bit more closely related to their US neighbor.

Those are some of the things we see. There are going to be MTTs as expected. We can also say that the PokerStars casino will be integrated into the online poker client itself. Right there in the lobby, you can choose to play casino games, if that’s your thing. The sports betting platform, FOX Bet, will also be accessible right there at the main page of the lobby.

Nick: That’s actually something that I didn’t think we quite talked about last week on the podcast. I think it might have happened just after, was the FOC Bet rebrand which happened in New Jersey and launched in Pennsylvania. That was late last week or early this week?

Mike: Yes, my memory is also running together with days here. I’m not sure if we did cover that on the podcast, but just as a brief refresher, yes. Betstars, which was software, the actual sports betting platform in New Jersey, has been rebranded to FOX Bet, which is indicative of the partnership between the Stars group, which is the PokerStars parent company, and FoxSports. There is that big deal there that happens, I believe earlier this year, has now culminated in the rebranding of BetSars in New Jersey to FOX Bet, and that happened just prior to the kick-off of the NFL season.

Also prior to the kick-off, we did see, within a couple of days of the rebranding of BetStars, we saw FOX Bet appear in Pennsylvania. That is technically PokerStars debut in that state, even though it’s not with PokerStars in general.

Nick: That is live in taking bets from punters in Pennsylvania today. That just be poker and casino to market for all the Stars group.

Mike: Correct.

Nick: One thing is probably worth stressing, only because I saw some quite a bit of discussion since we published this exclusive on Poker Fuse about this little preview of the client , is that, obviously, when it goes live, it will not be sharing liquidity with the New Jersey client. We talked about this a lot in the podcast before, and it’s in our articles, but it’s always the first question that people ask, unfortunately from launch is not going to be connecting players pools with New Jersey . It might be something that comes later on.

Mike: It’s something that there’s a lot of pieces in play there to make that happen. There is, first of all, Pennsylvania regulator has to give it the green light. They have not as of yet. Every comment that they have made on the topic says that we can’t say when or if this is going to happen. We do know that there have been conversations with New Jersey. The New Jersey regulator did disclose that quite some time ago, so these are not new conversations. It’s definitely on their radar. However, there’s still the pending Department of Justice opinion of the Wire Act that has things in a holding pattern with regard to shared liquidity in the US. There’s some things that need to be worked out before liquidity is shared across the state lines in Pennsylvania, but I do expect that it will eventually happen. Yes, that will not be going live at the beginning.

The other thing that I hear people questioning is, when is this going to happen? Initially, we were told that the I-gaming market in Pennsylvania is going to soft launch the week of July 15th, which technically did happen. It just so happened that poker was not a part of that soft launch, it was just casino games.

The question now remains, when is there going to be online poker in Pennsylvania? While we have speculated a couple of times, information on that topic is always changing, and if I were to give my best guess now, I would say that it will be within the next 30 days. Maybe that’s a bit of a broad statement, and I’m not going too far out on a limb by saying that, but I don’t think it will be longer or much longer, if it is longer than that period, and as far as how soon it can be, I guess we could see something by the end of the month, but that’s a pretty narrow range. In any fact, I would say the best answer to go with is within the next 30 days.

Nick: There you go. It’s interesting to consider that although it won’t be shared liquidity, it’s still obviously the largest populated states to go live with regulated online poker. New Jersey supports three—

Mike: To almost go online.

Nick: Yes, but when it does, it will be, it have New Jersey, smaller supports, three networks where they offer decent size MTTs, various different cash games, so it’s large enough. When PokerStars launches— When PokerStars entered the New Jersey market, they were last in by a long, long shot, and entered already pretty competitive place with a very high marketing spend from his competition. It’s going to be entering on its own, and from different day one, could have a really comprehensive offer despite it being closed liquidity. We’re still talking over 10 million people in the State of Pennsylvania. It still could be pretty exciting launch despite their restrictions.

Mike: Yes, and that’s actually one area that I think Pennsylvania is going to be vastly different from New Jersey, is, as you mentioned, there wasn’t really a big first-mover advantage to the online poker sites that opened up early in New Jersey. I don’t expect that to be the case in Pennsylvania. I think that PokerStars is going to gain a pretty big advantage by being first in there. I also think that part of the reason that they will is because their competition is going to be limited. Yes, we have three networks in New Jersey. I don’t expect that we are going to have three online poker networks in Pennsylvania anytime soon.

I can see wsop.com jumping in and competing with PokerStars in the not too distant future, nut I’d be quite surprised if we see GVC and PartyPoker come in anytime soon. We had Tom Waters on the podcast not too long ago, and he seemed to be quite indifferent to the US market in general. Yes, we might see them, but I don’t know. I think it’s going to be a two-horse race for the foreseeable future in Pennsylvania.

Nick: If Pennsylvania is a larger potential market, why are we expecting less uptake in online poker?

Mike: Yes, it could be lessons learned from New Jersey. There’s three there mostly because it may not make sense to shut them down while they’re up and running. The initial outlay, the investment in marketing, particularly just to get things up and running, may be looked at as, “Hey, this is not worth it.” I do think that that combined with the uncertainty around the shared liquidity question, is probably making it an easy call for GVC to say, “Hey, we’re going to sit this one out.” Who knows? They may have looked at what PokerStars did in New Jersey, and how they came in and didn’t seemingly miss a beat. Maybe they’re looking at, “Hey, let’s let the competition take the lumps. Let them get in early, and then we’ll swoop in and we will reap the benefits of the path that they have paved.”

Nick: Yes, that’s a very good point. Maybe another factor is just the casino side of things, is somewhat less attractive in Pennsylvania than in New Jersey. I think the tax on slots is high 40s or 50s.

Mike: Yes, through the roof.

Nick: From the New Jersey perspective, I mean, every month, casino revenue just goes up and up, it’s sky high. As we talked about on this podcast, and read about a lot before, Poker is an excellent acquisition channel for customers. Who then if want to play casino, is a much higher margin business. They perhaps don’t have that same business model in Pennsylvania, where slots might be unprofitable full stop. That high tax rate, if you’re paying anything to acquire these customers. Without that support, maybe that is, from PokerStars’ perspective, Poker first company still, that’s very, very important to gain a foothold at any cost. Where other operators might be looking and saying, like, “Hey, if we don’t think we can make money from the casino, there’s no point propping up a Poker component.”

Mike: Right. Yes, if you’re looking at Poker as simply a customer acquisition tool, then if you’re not going to have the end result, which would be to convert them over to casino players, if you’re not going to have casino, then why bother with the customer acquisition portion of that formula? As you point out, PokerStars, being a Poker first company, there’s a lot of benefits for them beyond just cross selling to the casino side of the business.

Nick: Well, there we have it. Loads of great info going up on pokerfuse.com, more to come. Do keep your eyes on that, and we will be following it closely as things unfold.

888’s online poker revenue declines in H1 2019

Nick: 888 Holdings released their financial results for the first half of 2019. For an online poker analyst, it was not pretty reading. Revenue continues to fall precipitously at 888 Poker. They generated a standard 25 million in revenue in the first half of the year. It’s down almost 30% on the same period of the year. Before this continues a trend of double digit declines in revenue at 888. It’s basically half what it was two years ago. Which is pretty shockingly bad, for an operator where Poker has always historically been a core part of what their customers played on and how they generated revenue.

Mike: They’re still one of the top online Poker rooms. Correct? Where are they? In the top three?

Nick: If we are to rank operators, European focus mostly white market online poker operators, they’re third after PokerStars and PartyPoker.

Mike: Yet they’re still seeing these struggles. I have my opinions on why they may be looking at some of these difficulties. I’m curious though to see what you think on that topic. Why are they seeing these consistently declining revenues from online poker?

Nick: Well, I’ll tell you their official line. Anyway, it’s worth stressing, comparable, let’s say, PartyPoker, whose parent company is GVC. Poker may be 10% of their business. Well, it’s much more than that, being that businesses just acquired a lot of retail component. 888, it used to be 40% or 50% of their revenue. It used to be like a poker and casino. I think it’s less than 20% now, but it still gets a fair amount of chat on investors’ calls. They still say, “This is a core part of how we acquire customers.” I’m just trying to find the numbers, it’s somewhere in the 25% to 30% of their customers still come through poker first, before being sold over to their casino.

Casino makes two-thirds of their revenue now. It always gets a lot of chatter and investments. They’re always slides, there’s more slides dedicated to poker on an 888 call than there is on a PokerStars call.

Mike: I was just going to ask, this seems to, going back to our last segment, this seems to be the typical company that’s using poker as a customer acquisition channel. Who knows? Maybe declining revenues is not a sign of their lack of success in that regard. Because even though they’re bringing them in for poker, they can be then quickly converting them to casino or sports, and therefore, you would see declining revenues in poker but still have poker looked at as a successful vertical.

Nick: Yes, you’re absolutely right. They do provide other metrics. The revenue, they report the amount of revenue they generate from poker players who’ve been cross sold to other products. I’m not quite sure exactly how they calculate that and when somebody is considered a poker player, but that declined to 4%. Yes, it’s still down, but I suppose a bit better. Active poker players declined 11%, which I think is concerning, because again, if you’re acquiring them through poker, they’re going to be poker players for X amount of time before— Ultimately, I think they would continue being poker players, but they will play some casino games on the side. That will probably be a pretty common lifecycle of that player.

If they’re telling investors this is important, I don’t think they want to see revenue decline. They’re certainly not saying that this is part of the plan. They’re saying that, the top line is turning things around. That was their big title. Yes, the reasons they gave were the same thing that we’ve seen across the industry. Market problems in, and again, they didn’t name them, but Slovakia and Norway and Russia will have all caused problems. Netherlands continues to cause problems until that regulates. Sweden costs a lot now to operate in.

For the first time, I heard them blame currency fluctuations, which they don’t report on in a constant currency for poker because they say that’s an unreliable method, for some reason. Even though everyone else seems to do it. But they’re saying that that definitely had an effect, even though they’re not saying by how much. Then they talk about how the numbers are quite encouraging in the sense of it didn’t decline. It actually increased revenue from H2 last year into each H1 this year. They said that shows signs of stability in their online poker product.

Mike: Yes, I found that to be quite interesting. The numbers that you quoted earlier, the relative numbers, for example, that was it down 4% that poker?

Nick: Yes, revenue from poker customers cross sold to other verticals.

Mike: Cross sold. Right, is that down year on year, or is that down half on half?

Nick: Yes, that’s down year on year, I think.

Mike: Okay, yes. I came back to the last point you raised about the H1 versus H2 of 2018. I found that very interesting that they would take the seasonality of poker and try and combine that into, call it stability, if you will, in their revenue numbers.

Nick: Yes, it’s total nonsense. Well, we see this from all public companies, whether it suits them that explain why things decline because of seasonality, and when it suits them to let’s say something else, they say it’s showing stability. 888, their revenues declined from H2 the prior year into H1. It’s increased from H2 into H1 almost every year for the last 8 to 10 years, something like that. I think there was one exception, I think that was last year when the revenue was poorly declined, but normally speaking, the first half a year is better than a second half of the year just because more poker players play during that period of time.

It always raises an eyebrow, when we see these sequential numbers trotted out to represent something, but definitely the decline isn’t quite as bad as what we’ve seen in prior years. Maybe we’re seeing a bit of slow down. They point to— going back to the first segment of this podcast, we talked about all the online poker players that have been upgraded, conspicuous in his absence was ATT, which has not upgraded their poker software in a while. They’ve been rolling out this poker eight software client. It started at the beginning of this year.

Now, when we first reported it, ultimately amounted to a new table skin rather than what they said was this biggest software product that we’ve done in however many years, huge upgrade. When we played it, it definitely wasn’t improvement in our experience, but it was more just a slightly better table design rather than a big upgrade, but this is still something that they focused on in the investor’s call about a big thing that was still coming, or is happening now, is this roll out of this new poker client which seems incremental to me, but they’re definitely putting a lot of chips into that basket, to mix my metaphors.

Mike: We did an interview over on Poker Fuse with Yaniv Sherman who’s 888’s head of commercial development, and when I asked him about what we can expect from Poker 8 coming up, he did refer to the new improvements they rolled out on their poker client as being the table. He didn’t really look at it as the platform, he referred to it back as the table. It seems like that’s about the extent of what they’ve improved.

Nick: Then we have group CEO who’s saying Poker 8 is probably the biggest product enhancement project that we have in the company at the moment.

Mike: Wow.

Nick: It was really talked up, but I say maybe this is a term that describes it a lot more. They touched on they’ve got a new portrait mode in mobile that’s coming out, and this was kind of under the banner of Poker 8,, so maybe they’re using it as a more holistic term. These were the main things that they focused on. The other big things they said that were coming was more shared liquidity; they recently launched in Portugal, that they said had gone really well. They launched in Italy and they said that’s grown 28% year over year, which is close to meaningless being that it launched 18 months ago.

Mike: Correct.

Nick: There are some months that are basically zero when do your over-year comparison, so I don’t know, but they’re saying that that went really well. They confirmed they’re going to launch in France, which we talked about before we thought it was going to happen, but they said definitely, I think, H1, they were going to return to France, which is quite interesting. That was the extent of how they were going to turn the ship around. They again committed to remaining the third largest online poker network, again, using that rather dubious metric of excluding like GGNetwork or Winamax or something like that for various different reasons.

It’s funny, if you go back a couple of years, they always said we’re going to stay the second largest online poker network. Then PartyPoker spend a bunch of money and improved their product and now it’s definitely going to remain the third largest network. Throwing it to you, Mike, what do you think they should to do to retain their third place position, or what do you think is missing from the 888 formula?

Mike: I think there’s a lot missing from the 888 formula. I think first and foremost is they probably need to revamp their software. There’s so much innovation and so much progress in the industry right now, in the software. It just seems like 888 has not been able to capture the headlines, not been able capture the attention of the poker playing community in that regard.

It’s interesting, though, their decline overall as a poker company is quite different than perhaps what their business is doing over on the US side of things. Yes, were still not sure that they are going to be launching in Pennsylvania any time soon, but they’re still the leading online poker network in the whole of the US. That’s a bit different, or gives a very different perspective of the company than if you look at them as a whole, globally or worldwide. I think that their strategy might be changing there though.

In that interview with Sherman, I did ask him about their plans to become more of a B2B operator instead of the B2C operator, and that is because they are powering the wsop.com, for example. When I asked him about Pennsylvania, he did bring up wsop.com, but didn’t bring up the 888poker brand. I was wondering if perhaps they’re making that shift, making that transition. Even in Delaware, the online poker rooms there are not branded 888, they’re branded for the racinos that are their land-based partners. That was on my mind when I did the interview, but everything that came back, he seemed to indicate that they are going to continue with their B2C operations, and that the All American Poker Network, AAPN, and the 888poker brand will continue to be promoted in the US.

Nick: I think thee American Network is definitely their shining star thing that they have in their portfolio that no other operator can really get close to. They said on the call like, “In the United States, poker is king.”

I think they wish they could talk about it a lot more, but the unpredictability of what could happen with the Wire Act and with other states restricts them about really talking up their opportunity. They are sitting with their WSOP partnership, with their position uniquely in Nevada and Delaware. It could be massive if over the next five years, we get— I’m referencing an interesting Twitter thread that was going on the last couple of days. If there were 100 million people in regulated US states that could play online poker, then 888 would be in a uniquely powerful position, I think. That’s a big if.

Mike: It is a big if. Maybe I’m going out on a limb here by saying this, but I think they’ve got some things that are propping up their US operations, that if those were taken away, they would be in a really, really big trouble. I think one of them is they’ve benefited from this partnership with wsop.com. I think that WSOP brand is so big that it overcomes any shortcomings they may have in the way of software. They’re so big, and there’s so little competition that software doesn’t appear to be a problem. If the market were bigger, and if there were 100 million people that were available to play online poker in the US, we would have more operators, you would see that, relatively speaking, their software would be lacking far more than we can see it now.

I think the other is the shared liquidity. They’re in a very unique position because they are the only operator to be able to connect networks currently across state lines. Once that advantage goes away— For example, if Pennsylvania were to join the multi-state compact there and start pooling liquidity with New Jersey, that advantage that they enjoy from shared liquidity would be greatly reduced. The more states that come online and the more states that join that shared liquidity, the smaller that advantage is going to be. Once that happens, I think then we’re going to start seeing people pointing to other aspects of the company, of their software, for example, that are relatively lacking when compared to other online poker operators.

Nick: Yes. I think going back to the international consumer facing stuff, I think that’s been my biggest concern, looking at all their plans, it’s really just playing catch-up. Poker 8 seems to be— There was a weird line where he was saying, “We’ve got this landscape mode in mobile, and with things like this, we’re going to be an example to the industry.” I’m not saying that that feature is everywhere, but these are pretty minor features that are not unique and not special, they are playing catch-up. In so many ways, they are— Look at their online tournament series investment, XL Eclipse that’s running right now, I think it’s Eclipse, is less than $1.5 million guaranteed. We’re talking, it’s the same size as what MPN is doing with UCOP. these are second tier networks, not to be disparaging, but just they’re just in a different class to where 888 used to be and where PartyPoker and PokerStars and Winamax and PokerStars in Europe and GG Network and IDM all occupy.

It’s almost like 888 is accepting it’s second class status, where it really shouldn’t be there yet. If you were to ask me what has Unibet done or MPN done, you could trot off promotions, interesting tournament series, branding, live events, that kind of thing. With 888, I would struggle to come up with anything in the last nine months. Only the Poker 8 client debut, and I remember there were some issues. I remember them also being resolved and thinking oookay, this is definitely a step in the right direction, but that’s been it. I recall guarantees going down. I don’t recall any interesting new promotions.

I just feel they need to do something. They need to find somebody to take a direction and try it out. Even with PokerStars, restricting the number of cash game tables you can play or their all-in cash out feature or things like that. They’re contentious in some respects, but they’re trying new things. They’re doing it because they want to improve the poker product. Now, a lot of players will say that it’s the wrong decision or they’re not the kind of player that benefits or these kinds of things. PartyPoker goes in a different direction, but they ban HUDs. That’s a conversation. 888 is just not part of these conversations anymore.

The last big product update is they removed one of their new games, their Flopomania, I think, came and then quietly went. That was the last update that I recall that they’d had in terms of new game variants. I think they added progressive knockouts, which is something that everyone’s had for years. I think that happened six months ago. They just need somebody to be Manning the helm and trying something.

Mike: It feels to me like they’re competing against where the industry was five years ago.

Outro

Mike: Well, that wraps it up for the week. Thank you, everyone, for tuning in. As a reminder, please give us a like and a subscribe wherever you get your podcasts. You can also follow us on Twitter. Nick is @pokerprojones. I am @SpookyBugs and we’ll see you next week.