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Starting an Online Poker Room Not a Great Plan
Poker is a risky business. For every rags to riches story, there is five
remains rags or worse, Kmart to rags stories. The same is true for the
business of online poker. Poker is the internet’s number one draw, with an
estimated $1 million dollars being wagered online every minute, every day.
Riding the wave of popularity, businesses such as Partygaming (parent
company of online poker giant Party Poker) have become dream investments.
Running an online poker business seems like buying a McDonald’s franchise in
the late ‘80s- a virtual cash cow. Online sites do not even shoulder some of
the risks involved in games that house games must. They simply provide a
place for players to congregate, and make money by taking a small percentage
of the pot and by charging a sign up fee. The stock for Partygaming is one
of the most valuable companies on the London Stock Exchange.
Ironically, like many online casino sites, Party Poker is based out of
Gibraltar, a country which has a total of one land based casino. Most of
these online sites also encourage a high level of responsible gaming. The
site Victor Chandler, for example, telephones players who spend more than
$600 a day, or $1,500 in a month. The reasoning behind this is simple- it is
not in the best interests of the sites to have customers blow their money in
one go and never return. The key to internet success, and especially for a
site with relatively low takes on pots such as poker, is returning visitors.
It may seem with the success of these sites that starting an online poker
room is a sure way to success. Various industry experts, however, point out
that although poker is increasing dramatically in popularity and in online
play, the sites that are making the money are the ones that were established
before the current wave hit. They have brand loyalty, name recognition, and
most importantly a huge and growing number of players to refer their friends
and increase the competitive base. Against such formidable foes, it is
unlikely that a fledgling site will survive the flight out of the nest.
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