GPWA Times Magazine - Issue 2 - October 2007

35 decisions of poker network operators affected all the poker sites using their networks. The online gaming industry, once dominated by a huge U.S. marketplace, is now split into operators that continue to offer online gambling services to a smaller audience of remaining American players and operators that do not. Turmoil in the online poker marketplace Casino City operates highly sophisti- cated monitoring software we created to track the level of activity on the major online poker networks. Figure 2 shows the dramatic drop we measured in the average daily peak number of ring-game players on the PartyPoker network after its withdrawal from the U.S. market. But strong player liquidity, even without American players, allowed the PartyPok- er network to survive. PartyPoker’s ring-game players showed steady growth due to heavy promotion in Europe during the beginning of 2007. With fewer players, smaller Paradise Poker did not fair as well. After experiencing similar play- er losses they lacked sufficient player liquid- ity to continue operating as an independent platform and joined the Boss network. The European OnGame poker network experienced significant growth in 2007, as shown in Figure 4. The average num- ber of ring-game players doubled to 5,000 during the first few months of the year. In late April the number of ring-game play- ers tripled to 15,000. At the same time the number of PartyPoker players began to decline. Further growth in the On- Game network in August raised the aver- age peak number of players to 25,000. The rise and fall of the average daily peak in the number of ring-game players on the PartyPoker network is mirrored by PartyGaming’s stock price (Figure 3). The stock price dropped 75% to 26 pence the month after passage of the UIGEA and the number of ring-game players declined 60% from 18,000 to 7,000. Over the next several months the number of ring-game players grew 60% reaching 11,000 be- fore peaking in March 2007. One month later, the stock price peaked at 57¾ pence, a 122% increase. Following the March peak, the number of ring-game players declined 27% to 8,000 before bottoming out in July. A month later, the stock price began to rebound after dropping 59% to a low of 23¾ pence. The U.S. poker marketplace has undergone tremendous change since the departure of PartyPoker. Today PokerStars dominates the U.S. marketplace with an average daily peak of 12,000 ring-game players (Figure 5). Full Tilt Poker is also a major player (Figure 6), having grown from fewer than 4,000 ring-game players before passage of the UIGEA to over 8,000 today. Bodog Poker grew from 1,000 peak players a year ago to a peak of 4,000 players at the end of 2006. After scaling back their marketing this year, they’ve dropped down to 2,000 ring-game players (Figure 7). Peak Ring-Game Players (Daily) Figure 7. Bodog Poker - Accepts Players from all U.S. States Peak Ring-Game Players (Daily) Figure 5. Poker Stars - Accepts Players from all U.S. States Peak Ring-Game Players (Daily) Figure 6. Full Tilt Poker - Accepts Players from all U.S. States