Smaller Online Poker Networks Attempt to Seize Opportunity Created by UIGEA
When the U.S. Congress decided to pass the Unlawful Internet Gambling Enforcement Act in a last minute backdoor move, the entire online gaming industry was whipped into a frenzy. Immediately, every company that has anything to do with online gaming had to analyze the law, and decide how it would deal with the new legislation moving forward.
Many of the large publicly held online gambling companies like Party Gaming felt they had no choice but to cease U.S. operations, and focus their efforts on other parts of the world, while working to try to get sensible legislation passed in the U.S. Still, other private operators like Full Tilt decided to stay the course, and continue doing business as usual.
But, what about the smaller rooms, the ones who were part of networks that have been, or soon will be disconnected from their U.S. players? This would include rooms that are part of networks like Ongame, which are no longer allowing deposits from U.S players, and will soon stop allowing U.S. players to access the site.
These smaller rooms have worked hard to gain the players they have, but may not have the liquidity to survive a long 'rough patch' while they try to create technological solutions to keep their business alive.
Enter the smaller poker networks. These companies provide software platforms for the online poker rooms, and the decision to stop taking U.S. action may be a boon to these mid-level operators.
"The phone has been ringing non-stop" confided one employee of poker software company Skill Games, Ltd., a network that provides the platorm for online poker rooms. "The smaller guys have needs, and have player bases that would be appealing to any network. We appear to be in the right place at the right time to take advantage of this"
So, what would a move to a smaller network mean for the players? Critics of smaller networks argue that 'smaller' can also be defined as 'less liquid, or less stable', and that players might not be dealing with entities as stable as Ongame for example. Still, companies like Skill Games argue that they are bound by the same regulation the big boys are, and that after 10+ years in business, stability is not an issue.
Anytime a change in landscape this drastic occurs in any industry, there will be companies crippled by the change. There will also be companies where the problem for a majority of an industry becomes an opportunity.
Clearly, the landscape of the online gaming industry has changed a lot over the past month or so. Only time will tell which companies are standing when the dust settles, and what the long term prognosis seems to be for the online gaming business in the United States.