Nick and Mike are back to talk with BetMGM’s Head of Poker, Luke Staudenmaier. After hearing about how Luke got started in online poker and his path to Head of Poker at one of the biggest online poker operators in the US, the discussion turns to the recent launch of BetMGM in the newly regulated real money Ontario online poker, the success of the first live BetMGM Poker event in Las Vegas, and Luke shares his thoughts on the future of us online poker apps.
Mike Gentile: Hello and welcome, everybody, to the Pokerfuse Podcast. It’s July 2022. This is episode number 48. I’m your host, Mike Gentile, along with my co-host Nick Jones. Today, we welcome BetMGM’s Director of Poker, Luke Staudenmaier.
Mike: Today on the podcast, we talk with Luke about how he got started in online poker and his path to taking the reigns at one of the biggest online poker operators in the US.
Mike: We also ask Luke about the recent launch of BetMGM in the newly regulated online poker market in Ontario, the success of the first live BetMGM Poker event in Las Vegas, and we get his thoughts on the future of the online poker market in the US.
Mike: Welcome, Luke, to the podcast. It’s great to have you.
Luke Staudenmaier: Thank you very much. Good to meet you fellows.
Mike: Nice to meet you as well. To start off, what we thought we’d do is get a bit of your history, your backstory, your origin story, if you will. I can say that your online screen name, IWEARGOGGLES, is one that I recognize from when I was playing back in the day. Did you play shorthanded Sit and Gos, perhaps?
Luke: I have played everything from the start in around 2004, 2005 until I hung up the towel in 2014 or so.
Mike: Why don’t you give a little bit of your background as a player, and then maybe we can dive a bit into your experience on the industry side of things.
Luke: Sure. I have a similar story to a lot of other people in the States, where I started playing low-stakes home games for $10 or so. I studied in college and then just never got unlucky, which is how a lot of people ended up successful in poker in the mid-2000s. I played a lot of MTTs for the most part. That was my bread and butter. That’s what I did professionally from 2005 to 2014 or so. A mixture of live and online, but most of the volume being online, of course, on PokerStars, partypoker, and Full Tilt.
Nick: What ultimately coaxed you away from playing to switching over to the industry side? I think PokerStars was your first job in the industry, probably.
Luke: Yes. Yes. My first job period, besides working at a Dairy Queen or whatever. What coaxed me was primarily Black Friday, where from 2011 to 2014, I would go between Canada and Mexico like a lot of other American online players, and it just created a routine that wasn’t sustainable. Go to Toronto and play WCOOP for 20 days straight, then go home and not do as much because you can’t play online.
I had gone to the Isle of Man in 2012 and was very impressed with Steve Day and Isai. Steve for just his general sharpness and knowledge, and Isai for his patience in dealing with players. I’m sitting across the table from him, telling him about why I think PLO short stacking should be different. He is there, listening and taking my feedback into consideration. In hindsight, it’s ridiculous, but that’s the kind of person that he was. I wanted to potentially go work for them.
In 2014, I moved to the Isle of Man the week after Isai and Mark’s leaving party because they had sold the company. I started in September 2014 at PokerStars, probably at a less than ideal time for what I was trying to do.
Nick: You were with PokerStars from 2014 through to 2020, so seven-years stint, is that right?
Luke: Yes, around seven years. I spent the entire time in operations, first with an entry-level rule and then eventually as head of poker operations for around the last year and a half before I made the leap to BetMGM.
Nick: What was it that brought you over back to BetMGM in the US focus?
Luke: There’s a number of things. One being something that a lot of people probably felt during the pandemic was that routines became a bit more difficult, and just having a change of scenery, a change of pace, a change of problems became a bit more attractive. There’s some other factors like you could say that there’s probably more opportunity in the US than the rest of world market. Where the regulation in the rest of world market is generally making it harder for operators as opposed to the US, where it’s moving a bit slow for poker, but it’s all upside. There’s going to be more markets in the future, whether it takes a short or long time, and so you’re not going to be wrestling with regulations in, let’s say, Germany, Netherlands, and so on.
Nick: Sure. In your role at BetMGM, can you just tell our listeners what your title is and what your day-to-day responsibilities look like?
Luke: I’m Director of Poker. I lead the poker team and basically own the poker financials, our profit and loss. That spans across marketing operations, game integrity, and so on. My day-to-day, trying to figure out what’s next for us, trying to pursue the next opportunity.
Mike: BetMGM operates a network in the States, networks with multiple brands. For example, three brands in New Jersey, and multiple brands in Pennsylvania and Ontario as well. Can you speak a little bit to how that’s working, and what are some of the pros and cons of offering multiple brands on a single network?
Luke: I’d say the pros have more to do with, like, for BetMGM, at least, the properties that we’re aligned with in New Jersey. Borgata is massive. It is the historical poker capital of the East Coast. That brand is very strong amongst the online poker players in the state. The party brand is a little bit different, where it’s likely just offering a different message. If you look at the creative design, it’s less serious than something like BetMGM.
The cons, well, it’s difficult. It’s occasionally having to make decisions as opposed in terms of what offers we run, what capabilities we have in certain markets, and don’t. Whether or not we can have a skin in a market or not, because you can’t have infinite skins in every market, every regulatory body is a bit different. Our focus has mostly been on the BetMGM in Borgata brands. I think that that makes the most sense both from a resourcing and brand-building perspective going forward.
Nick: Do you, in your role, oversee all the brands that would sit under the partypoker US network or BetMGM network, or are there other distinct teams who oversee different parts of maybe the marketing branding, that kind of thing?
Luke: No, it’s all three brands. I know historically, the business started as party. It was maybe Play MGM, Roar, and so on. BetMGM is leading the business, and that encompasses for poker and casino, all three of those named brands.
Mike: We saw that you recently launched with some success in the newly regulated Ontario market. I was wondering if you could tell us how that’s gone so far.
Luke: Ontario has been an interesting one because, at least from my perspective, joining on day two was almost a disadvantage for poker. Not the same for casino or sports since they don’t rely on player pools or the size of a player pool. The fact that it wasn’t a clean shift from unregulated to regulated made it a little difficult in the early days. I think PokerStars joined the Ontario market officially less than a week ago, and GG, as far as I know, still hasn’t.
I think day one, it was 888. Day two, we joined. It’s been a bit of a slow burn just in terms of like I said, it’s hard to bring players over and keep them when they can go across the street and play the Sunday Million, for example. Now that we’re getting closer to a level playing field, I think we’ll see more consolidation of like tournament guarantees and player pools and things like that. It’ll end up more like the Michigan market, say, or New Jersey, where there are three relatively sized operators.
Nick: Can you talk a bit about your decision to, so you went with, I think there are three brands under MGM now in Ontario with the BetMGM Poker Ontario app and then the partypoker Ontario app, and with bwin as well. With party and bwin, obviously, they come with an existing player base, having operated from offshore in the province prior. It was interesting to see BetMGM as a brand, that’s the first step you’ve taken outside of the US markets. Can you talk about your decision to bring that brand alongside two existing ones?
Luke: Well, the way that we think about poker in terms of the wider business here is that it’s more complementary as opposed to GGPoker as primarily poker. PokerStars was primarily poker for the first, I don’t know, 15 years or so of that business. BetMGM’s strength is sports and casino, and they have a lot of pull when it comes to acquiring new players.
Poker is meant to complement that we have opportunities to cross-sell in both directions. The casino business is going to grow, grow, grow over time. Making sure that we are allowing the opportunity for those synergies to happen is important.
In all of our markets, casino is present as well, and they are crushing it, as I’m sure you’ll note. I think that is reflected in our success in certain states. Michigan and New Jersey, in particular, are very strong for casino. Then Pennsylvania is certainly weaker for poker, but you could possibly argue that not having a land-based property in Pennsylvania is an impact there too.
Mike: Luke, do you see the BetMGM brand expanding beyond Ontario and beyond the US? Are there plans to take the brand into Europe, for example?
Luke: There are no plans to do that at this time. We have a lot of work to do within the US and our current markets, and a lot of especially land-based expansion to do. We have plenty to keep us busy in the US at the moment and Ontario.
Nick: It’s interesting to hear you talk about the player base and how big BetMGM is in casino and sports. Because I think the conversation over the last 10 plus years in the industry is, I think if we went back a decade, that would very much be a conversation in Europe. That you’d see a lot of big UK sports books, adding poker, maybe a skin on iPoker or Microgaming or something, so that their casino players, sports players would have poker so they would stay on brand. Then I think there was something of the shift in conversation in the last decade where you’ve got the big companies that were poker first, like PokerStars. Whose pitch then to investors because as a public company was, “We have this great player base that we can now cross-sell into higher yield verticals.”
It’s interesting with BetMGM, you’re back to that original thing, which is you have this very big casino sports presence. Is it fair to say you see the main driver to have poker is that those players can stay on your brand and be playing poker, rather than like that’s a direct acquisition channel for people coming into BetMGM.
Luke: Well, poker can be a direct acquisition product as well because it’s a peer-to-peer skill-based game. It can allow for different messaging, different advertising that brings in players. You’re right. I think that, especially when you consider that in our world, in the US, there is no operator that is enormous. There is no operator that is impossible to catch like it would be if you were starting from scratch in Europe, as I guess WPT Global has done recently.
It’s very, very difficult to change course in that circumstance. Poker is a boutique business with potential. I think Sky Betting & Gaming also used to have a poker site. Virgin has a poker site. In the US, when you consider again that there is no operator with a massive critical volume, then the playing field is much more level, and you’re free to explore those things and try different things without an enormous risk or an outsized investment to try to catch up.
Nick: Sure, and Sky Betting & Gaming still does have their own poker client, I think, Sky Poker is still a thing. That segues quite nicely into the next question that we had about BetMGM’s first live tournament that you just hosted in Nevada. Can you just talk a bit about how pleased you were with it — obviously, you beat your pretty ambitious guarantee there. How did the organization go? How did it all run?
Luke: It was fantastic. First of all, we branded the tournaments. We co-branded the tournaments with ARIA and relied on Sean McCormick and Paul Campbell’s expertise to run it right. This is one of the benefits of being tied to MGM is that they have just enormous potential when it comes to poker themselves. A lot of really popular poker rooms that offer us a lot of possibilities. It’s a fantastic marriage, so to speak, because they want to do great tournaments, we want to give our online players a great land-based experience, and we can help them meet some guarantees, make sure players have a good time at the property and so on.
This event went better than I expected by a long shot. I guess I’m speaking more as a manager than a poker fan, where the players had a great experience. Everything went smoothly on the property, getting players to the property. All of the issues that we had were small and easily addressable for the future. I find it really, really motivating that we can start to look through the suite of properties that MGM has and see what we can do elsewhere as well.
Mike: What does the future of MGM branded live poker events look like for the US? Are there plans to roll it out on a mass scale? This event, for example, took place in a state where you don’t have an online presence. Is that something that we can expect to see more of? Or are the live events — if any are planned — going to be focused mainly on the states where you’re offering an online product?
Luke: Well, we are working on this now. We’re only a couple of weeks out from this first event. While there are obvious benefits to running it in states where we have an online presence. It’s very easy if you run qualifiers in New Jersey for a New Jersey player to get to the Borgata. Traveling is part of the fun too. Why not send players to Vegas in the summer, where there is obviously a lot of poker activity. Why not Beau Rivage? Why not National Harbor? Springfield? And so on. There’s a lot of potential here. I think that, as we work through the plans, we will hopefully develop a blueprint to grow this. Branding scale, I’m not sure yet. It’s too early days to tell, but based on the first event, we will keep pushing forward and hopefully keep this momentum
Mike: With BetMGM being one of the most prolific online poker brands in North America, I was hoping that you can tell us a bit about how you’ve achieved such success in New Jersey. You’ve taken over the number two spot in terms of cash game traffic, and we were just wondering what’s the secret behind your success there?
Luke: Well, I think that there are two very clear benefits to point to. One being the strength of the casino brand, which I had mentioned, and also the Borgata. We have a close connection to the Borgata, which is a premier poker room. I think that those two things really help us differentiate within the state itself. I hope we can leverage MGM Grand Detroit in the same way that we have Borgata.
Nick: Do you see a lot of people coming in, playing in the live casino in the live poker room, and that being the conduit for them trying online for the first time, or is it more a broader branding synergy that you have?
Luke: I think it goes both ways. Of course, like if you have branding and access to your product on a property, it’s going to help. I think aligning the brands allows you to cut through some of the, I don’t know, problems with getting players to try online poker. The more that you have a land-based presence and sort of a virtuous cycle, so to speak, between digital and land-based. I think that you can cut through a bit of skepticism and ease players on their journey a bit more.
Mike: What do you see as the differentiating aspect of MGM poker that allows it to compete with big names, such as WSOP and PokerStars in the US?
Luke: It’s going to be MGM. It has to be. WSOP has ties to properties. PokerStars, not so much, but they are obviously leaning much more on their digital presence and history. I mean, look at the ARIA, look at Borgata. These properties are poker heaven. I think that the more we can find clever ways to benefit from our relationship with MGM, the better off we’re going to be in terms of carving our niche in the market.
Nick: How do you see your product, the mobile software app? How do you think that compares against the competition? And how important do you think it is for growing your online-poker base?
Luke: I think that it’s critical to have a good product, not just because of comparisons to direct competition, but you’re fighting for someone’s time, right? They’re not only spending their time on competitor apps. They are spending time on whatever the kids spend time on these days, TikTok, I don’t know. It does mean that we need to make sure that like the product is, let’s say, working. I don’t think that some of the big ticket items in online poker will fit into our online product just yet.
I’m thinking, for instance, mystery bounties. Well, due to the size of liquidity, due to the fact that there isn’t a huge player pool, the upside of prioritizing an item like that is going to be a bit lower than just making sure that players are having a good experience when they use the app. I don’t think it is going to be the end all be all of whether or not we are successful in market, but I think, of course, that you have to make sure that you’re focusing on the fundamentals when you’re trying to grow your market share.
Nick: Is the product something that you have a say in, control in, being that obviously, the software comes from Entain, which they own 50% of BetMGM if I’m understanding right. Is that a conversation that you’re part of? Or you’re just more like an end user of the software platform that you get?
Luke: I’m part of the conversation. There is, of course, like we have MGM owning half the business, Entain owning half the business, Entain provides the technology platform. If we had a wildly different roadmap from partypoker.com, I think it would be difficult to justify if there is a shared pool of resources getting exactly what we want. Rather, we want to put our stamp on something and say— Well, in the US, it might be a little bit different. An example would be if we think about content and ambassadors and things like that, the rest of the world is Twitch-driven, right? Lexi is on Twitch, Spraggy is on Twitch, and so on. In the US, it’s YouTube-driven.
If there’s a roadmap item that is to do something with Twitch, whatever it happens to be, well, that wouldn’t really be useful for MGM just due to the dynamics of the market. Again, it’s a bit of a push and pull, but we want to make sure that what we get is relevant to our market rather than spelling tons with two ends or [chuckles] whatever it happens to be as a differentiator between the rest of world business and the US.
Nick: Why do you think — this is a bit of a tangent — why do you think Twitch isn’t as relevant in the US market as in Europe? That’s not something that I was aware of, that it was less of an impact?
Luke: Tournaments, size of tournaments. I think the vast majority of success on Twitch has to do with deep tournament runs in the virality of having that moment stretch out over a few hours and ramp up. Who’s the German guy who had some deep runs? Can you remember? Is he Nasi? I don’t recall, but there was a German guy who made a deep run in some online tournaments and had like a hundred thousand concurrent viewers. I sat there watching it for hours, even though he was screaming in German because it was deep in a tournament with a ton of money up top. Whereas in the US, it’s much more cash game-driven, and you’ll see that change over time as shared liquidity grows, expands, but for now, it’s primarily YouTube cash games because that’s what dominates most of the gameplay in the US.
Nick: Sure. That’s a nice little segue into the next topics we want to talk on. Looking ahead very broadly next three years, next five years, what do you think the major developments will be positive or negative that are going to benefit both US online poker and MGM specifically?
Luke: I can’t think of anything negative, and I’m not just painting nice pictures. It’s hard to think of something negative because we know that shared liquidity is going to expand even if it’s slow. We know that there isn’t going to be legislation that says, oh, players can only wager, 3 cents in a hand in cash games or whatever it happens to be. I think it’s all upside. The most important thing is going to be the expansion of player pools in terms of more states, more states joining the interstate liquidity agreement because then you’re able to offer new products.
It’s hard to advertise Sunday guarantees if you don’t have 10 markets that can let you run something like a Sunday million, and similar with things like running SPINS versus SPINS Ultra versus other game types. It’s harder to do in a smaller liquidity market. I think that number one is certainly shared liquidity, and of course, receiving a nice tailwind from the strength of our casino business will help us as they expand too.
Nick: I guess one, not really negative headwind, but perhaps just the pessimistic take is that everything seems to be painstakingly slow in developing, and the New Jersey online poker market is nine years old. That’s a crazy timeframe, I think I’m right, but it’s like 2013, 2014, we’re talking, I think-
Nick: -and Nevada predates that, right? We’re now almost a decade ahead, and we’ve got two or three more states. Are you optimistic that we’re going to see things speeding up a bit? Taking the multi-state iGaming agreement, again, that forever feels almost there but also always out of grasp. Do you see broad strokes there being a reason why things might start speeding up in the coming months and years?
Luke: I can speculate, I don’t have any specific information, but if I zoom out and look at the market since the beginning of 2021, we had Michigan open up for poker and iGaming, but how many states opened up for sports? I think that the acceptance of sports betting is likely going to help us, and I think that as states see the success of iGaming in Pennsylvania, in Michigan. Especially if they see that it’s not harming local interests in terms of land-based casinos, I think that could potentially help open the door.
Mike: Not too long ago, BetMGM announced its first brand ambassador in quite a while. I was wondering if you can tell us about your approach to brand ambassadors, how you see them being utilized and what they bring to promoting the brand.
Luke: We have Darren Elias as a brand ambassador, and we also work with Michael Gagliano, Gags in New Jersey. For now, we want to make sure that we have the Poker Player expertise that doesn’t live within this business. We don’t have a 20-year history of operating Poker to make sure that we have the right frame of reference for making poker-specific decisions, and Darren and Gags certainly provide that. They’ve been very generous with their time and feedback in terms of making sure that thinking about ARIA. Darren had a lot of feedback for Paul and Sean, and it’s a great dialogue to have.
That is where we wanted to start from a credibility perspective due to the— Again, focus on sports and casino historically at BetMGM. Going forward, there are a lot of different avenues we can take so we can focus on content creators. We can focus on land-based if we wanted to. If you can tell, I don’t have a fully fleshed-out strategy for this yet, but I think that as we grow, it’s going to become not obvious but almost apparent what we need for the circumstance that we’re in.
Mike: Luke, there seems to be, at least on my part anyway, some confusion as to what we should be calling the BetMGM network, or is it the partypoker Network? I’m really not sure. It seems to not only be in question in the US, but it seems like it could be going a separate way up in Ontario as well.
Luke: Well, I think neither, actually. The word network, I just think, might be a bit outdated at this point. It makes me think of like iPoker and Ongame and things like that. When in reality, we’re leading with BetMGM. That is the brand with an extraordinary amount of focus and investment. We have Jamie Foxx, Kevin Garnett, and all sorts of sports stars that we can potentially use to grow our brand, but growing the customer base of BetMGM is going to be the focus.
I think that Borgata, partypoker, they provide reach for us. They provide some additional complementary elements, but for the most part, we will be leading with BetMGM. It’s also the organization as well.
Nick: Okay. I’ve got a big picture question to finish on, then. This jumps back a bit to our optimistic look ahead for five years’ time. My question would be, let’s say we have seven to eight states and five years’ time, and BetMGM is operating a connected network across these states, and you’re competing with your PokerStars, your WSOPs, and a few other entries. How many operators do you think that market can support, and where would you see BetMGM sitting?
Luke: Well, I want it all, so Bet MGM is obviously going to be at the top, but it’s a great question because that is historically one of the strengths of poker as well. This is due to the requirement of a network effect. It limits the number of operators in any given market. If you look at Ontario, for example, I think there may be dozens of sports operators, but in any given Poker market, you’re not going to have that.
I would say that since you were very specific in terms of seven or eight states together, a poker market like that can probably support four or five. There will be the traditional crew of BetMGM, PokerStars, WSOP, potentially something like WPT, GGPoker, whatever. Some other wild cards would be my guess. I don’t think there will be a dozen different Poker operators because there won’t be a dozen different sports and casino operators either. I think that even in the past six months, we’ve seen some changes there that would indicate that there is slowly going to be some consolidation in the other gambling verticals.
Mike: Luke, thank you very much. It was a pleasure having you on, very informative, and we look forward to talking again in the not too distant future.
Luke: Thank you very much. It’s great to meet you both.
Nick: Thanks Luke
Mike: Well, that wraps up this episode of the Pokerfuse Podcast. As a reminder, please give us a like and a subscribe wherever you get your podcast, and you can also follow us and interact with us on Twitter. Nick is pokerproJones. I’m SpookyBugs. Thanks, everyone, for tuning in.