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10 Years After Black Friday: Where Poker's Been and Where it's Going

Full Tilt Poker once played a huge role in the U.S. market.

It's been 10 years since Black Friday but the "anniversary" isn't one celebrated by many. After all, it's a day nearly every poker player would prefer to forget.

Ten years after hundreds of millions of dollars in player funds were frozen and seized by the U.S. government and lives were turned upside-down, the industry has gone through drastic changes. From the modern strategic meta to some of the sites on which poker is delivered to the names at the top of the game — OK, Daniel Negreanu and Erik Seidel are still doing pretty damn great — many facets of 2021 poker would look pretty alien to someone from 2011.

Entire books could be written about what's happened in poker in the intervening 10 years since Black Friday. But, in an effort to more briefly examine the history of the fateful day and the changes it has wrought, PokerNews turned to a couple of industry experts for some perspective.

Looking Back on April 15, 2011

Not many had more of a first-hand look at Black Friday than Steve Badger. The one-time World Series of Poker bracelet winner joined PokerStars in its very early days, before it had even launched a public real-money product, according to his website.

In a company full of software heads and customer support workers, he came on as "the poker guy," later to be joined by fellow player Terrence Chan. Badger played an instrumental role in shaping the company's poker decisions, like hosting nine-handed tables instead of ten-handed and establishing the World Championship of Online Poker.

Of course, by 2011, that sort of thing was less necessary, so Badger had moved into a more general consulting role.

"Things like keeping the company from wasting $10 million on putting the Stars logo on WSOP tables, whether to buy Poker.com for $25 million, or the World Poker Tour for $12 million," he told PokerNews.

Badger was working on some search engine optimization for some of the blogs on the site when Black Friday went down. Unlike many throughout the industry, he wasn't stunned into a state of shock. While some in the company undoubtedly experience various levels of panic, just as many others were, if not ready, at least not wholly unprepared.

"It’s not an exaggeration to say that every important choice we made over the previous 10 years had, as a part of the decision-making, an awareness that a Black Friday-like event could occur," he said.

Less prepared was Steve Ruddock. Now content director at BettingUSA and editor-in-chief at Gaming Law Review, he was a freelance writer producing work for several poker outlets in early 2011.

Unlike Badger, he did use the word shocked to describe his immediate reaction to seeing the U.S. Department of Justice logo plastered on pages formerly inviting him to learn, chat and play with the pros.

"I didn’t see it coming, even though I covered the legal climate in the post-UIGEA U.S.," he said. "At the time, I knew it would be a significant event, but not, as it turned out to be, a pivotal moment.

"Looking back, I would compare the real-time reaction to Black Friday to COVID-19, in that we thought it would be a couple of weeks, and those weeks stretched into months, and well, here we are, more than a year later and still wondering when the return to normal begins."

The Aftermath

The frenzied aftermath of Black Friday resembled the fallout from a natural disaster, albeit to a far less serious degree. Some people tried to soldier on and rebuild piece by piece to the bankrolls and lifestyles they had before. Others simply left their old existences behind and moved on to start new lives elsewhere or in different vocations.

As for the U.S. market itself, it made for a particularly large and valuable building wrecked into rubble. Not all of the pieces were still there, to be sure, but there was still more than enough of value to be worth scooping up.

That's why Ruddock was surprised things didn't move faster when it came to legalization efforts in the ensuing years.

"Whether it was PokerStars or someone else, I expected legalization efforts to ramp up, considering the U.S.’s love affair with poker," he said. "Take something away, and people clamor for it."

At first, he felt proven right. It was just two years later, after all, that online poker returned to the U.S. in legalized and regulated fashion.

"Getting anything done about anything with governments these days is very slow."

However, things ground to a halt relatively quickly. The pace didn't surprise Badger, who did echo what Ruddock said about legalization and taxation making all the sense in the world. But at the end of the day, he said, "getting anything done about anything with governments these days is very slow."

Ruddock pointed to the influence of Sheldon Adelson as a roadblock, but ultimately, the lack of early returns from regulated markets may have been the strongest signal dissuading progress.

According to data from Poker Industry PRO, the market size hovered around 500 concurrent cash game players ($) for most of the post-Black Friday years.

Revenue has been left in the dust by online casino, lapped more than 10-fold, according to PlayNJ.

Crime and Punishment?

Rather than provide federal framework for legislation that would both protect players and provide revenue via taxation, the government instead focused on bringing what it saw as the perpetrators of federal crime to justice.

Eleven individuals were indicted on charges, and a years-long chase of sorts began as the DOJ attempted to round them up.

Ultimately, it amounted to little more than toothless bluster in most cases. While government did gobble up million of dollars in penalties and settlements, and some even served a bit of prison time, the reality is most got little more than a slap on the wrist.

Top Full Tilt executives Chris Ferguson and Howard Lederer settled with the government for a fraction of millions they earned from Full Tilt and eventually returned to live poker, with the former even reclaiming some of his old glory.

Chris Ferguson, WSOPE Event #7 Winner
Ferguson returned to his bracelet-winning ways.

"Black Friday went from a cataclysmic event to [Absolute Poker founder] Scott Tom having a plane ticket in his pocket the day of his sentencing," Badger said. "Try telling the story of the impact Black Friday had on players, the hundreds of millions involved, and then end it with a guy with a plane ticket in his pocket having to serve a week in jail, and any person unaware of the events will think you are full of crap. After living through it, it seems impossible it worked out how it worked out."

Badger had harsh words for the Full Tilt brass. He doesn't like how closely the site's collapse has been so closely linked to Black Friday over the years, as he believes the reveal that player funds weren't segregated means it was doomed to collapse at some point, likening the company to a brain-dead patient in a coma.

"Full Tilt was Howard and Chris' baby," he said. "Minimally, they betrayed themselves and those who trusted them by not keeping proper oversight over their child. Beyond that, the more they knew, the more they would have to have been active participants in the lies, misdeeds and idiotic choices that occurred.

"To me though, the worst thing now is the complete lack of explanation, which amounts to an ongoing betrayal. I suppose their attorneys have told them to shut up, but like they say on all the crime shows, if a suspect isn’t explaining how they didn’t do it, the logical assumption is they probably did."

The Black Markets and the Changing Ecosystem

In failing to focus its resources on providing legal, regulated options for the tens of thousands of "homeless" Americans still looking for poker action, Ruddock believes the government erred.

"It simply took down Michael Corleone, leaving a bunch of Fredos to operate in the U.S.," he said. "The situation for U.S. poker players didn’t improve after Black Friday — it got considerably worse."

Indeed, people still wanted to play poker. Live poker was an option that many turned to, but people had gotten used to the convenience of playing from home as well. At the end of the day, some of those players were going to give their business to whatever unscrupulous operators would still take it.

Thus, the nurturing and growth of a set of offshore, black market sites that still thrives to this day.

"It was akin to a zoo removing all fences and letting the lions and tigers intermingle with the camels and zebras."

While there have been high-profile, spectacular failures that serve as flashing warning signs, poker players ultimately tend to follow the money, and offshore sites still offer monster tournament guarantees that lure in thousands of customers.

Neither Ruddock nor Badger said they expect the government to swoop in a second time for a Black Friday encore to put a stop to that. Ruddock said the money simply isn't big enough, while Badger pointed to the outcomes in the first string of cases as instructive.

"It’s hard to imagine a lot of government meetings taking place today with the goal of putting somebody in jail for a week," he said.

In addition to the growth of the unregulated scene, another key after-effect of Black Friday was what Ruddock called the "disruption of the player pipeline." Without the advertising money flooding media everywhere and bringing new players into the game, the pools gradually shrunk and the predator-to-prey ratio rose.

"It was akin to a zoo removing all fences and letting the lions and tigers intermingle with the camels and zebras," Ruddock said. "Serious players quickly picked off the remaining casual players. They then started picking off the weaker members of their own herd while hyper-targeting the smattering of new players that showed up."

With liquidity suddenly at a premium and its chief rivals having imploded under their own missteps, PokerStars became the unquestioned dominant operator. According to PRO, it went from hosting less than half of the online cash players in the dot-com pool just before Black Friday to about two-thirds of them after merging its player pool with that of Full Tilt.

PokerStars Logo
PokerStars prospered even after Black Friday.

That has changed a bit in recent years. The rise of GGPoker and increased marketing spend by other rivals like partypoker have eaten away at PokerStars' market share. Today, it's back to hosting a little under half of the cash game traffic, and PRO actually projects GGPoker to surpass PokerStars by year's end ($).

Many players who were marginalized by the leading operator during the height of its dominance have rejoiced, but Ruddock cautioned that an overabundance of operators can be counterproductive. Spreading the player pool out too much hurts everyone's liquidity.

So while he noted that competition is vital for any industry to thrive, the ideal situation in poker would see operators more focused on providing the best product they can in specific markets rather than spreading to as many locales as possible. Hopefully, a balance would then be struck between maximum liquidity and a player-friendly product.

What's to Come for Online Poker?

Ten years later, the winding road from 2011 has left online poker in an interesting spot. Things are not near where they were before — with the lockdown-assisted boost now mostly faded, the industry is about 40% of the size of its 2011 peak, according to data from PRO.

Stateside, online poker has taken a distant backseat as state legislatures moved on to daily fantasy sports and then, most recently, sports betting. The latter has taken center stage due its far bigger market since the landmark 2018 ruling that cleared the way for expansion on a state-by-state basis.

"Perhaps in 15 years U.S. players in half the states will be able to play in the same pool of games as the rest of the world."

While poker has made steps, namely with Pennsylvania coming online in 2019 and Michigan in 2021, progress has been much more incremental than consistent.

Badger believes eventual legalization is inevitable but he expects things to keep "crawling along as it has been."

"Perhaps in 15 years U.S. players in half the states will be able to play in the same pool of games as the rest of the world, with taxes being paid to multiple entities from the same rake," he said.

Internationally, though, he sees big potential if operators can tap into Asia.

"The volume of players from the Asian market is still way, way, way below what it could be," he said.

Ruddock seemed more bullish when it comes to the U.S. market.

"After it was relegated to the bottom rung of the online gambling hierarchy for five years, I’m optimistic that a U.S. online poker renaissance is possible," he said. "My belief is we are one or two significant states away from online poker becoming a DFS or sports betting type topic in legislatures across the country.

"COVID-19 closures demonstrated there’s an appetite for online poker as activity spiked in the legal jurisdictions. Couple that with the passing of Sheldon Adelson and the recent First Circuit Court ruling on the Wire Act, there’s nothing stopping states from going down the online poker (and online casino) road."

If forced to predict how the next few years will shake out, Ruddock expects Michigan and Pennsylvania to join the Multi-State Internet Gaming Agreement in 2021. That would roughly triple the available player pool and make it one of the bigger ones in the world. Then, Connecticut passes online poker legislation and joins the pool along with West Virginia — already legalized but with nothing launched — in 2022.

That would hopefully get the ball rolling for bigger prize pools and more rake, making legislation a more attractive option in more and more states in 2023 and the years that follow.

"Offshore sites are the mediocre pizza place that is a two-minute walk from your apartment."

If that were to happen, a key trend from the last several years would likely be accelerated. According to PRO's tracking data, the gap between the regulated and unregulated market in the U.S. has shrunk considerably. Where the offshore sites once enjoyed about a 5-to-1 advantage, it's now closer to 2-to-1.

Badger and Ruddock both expect that to continue, with Ruddock noting one possible sticking point.

"Offshore sites are the mediocre pizza place that is a two-minute walk from your apartment," Ruddock said. "It’s not your first choice, but it’s convenient, and there aren’t any other pizza places close by. As soon as legalization takes hold, they will become afterthoughts for the overwhelming majority of customers.

"Cryptocurrency is the real wild card here. Like offshore sportsbooks offering credit betting, I would posit that offshores will always exist in some fashion unless licensed, regulated sites start accepting cryptocurrency as a payment method."

Black Friday's 10th anniversary brought plenty of cause to reflect on the past decade, with a number of industry heads taking to Twitter to share their thoughts. One thread provided by PocketFives founder Adam Small offered some hope for those looking for a light at the end of the tunnel.

"I think we'll have million dollar tourneys again in the U.S. within five years," he said. "I think we'll be talking about how [online poker's] thriving on the 15th anniversary of Black Friday."

Flutter PLC is a majority shareholder in PokerNews

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  • Ten years after Black Friday, PokerNews looks back at the road traveled and the road ahead.

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