How lucrative is online poker?

Jun 8, 2004 5:24 AM

If there’s one thing clear in the wake of last month’s World Series of Poker, the impact of online poker is becoming greater every year.

Case in point is the number of online qualifiers who entered the world championship event. Of the 2,576 contestants, about 40 percent of them gained their seat (worth $10,000 apiece) through an online tournament, satellite or other event.

One Internet poker site, PokerStars.com, actually sent 316 players to the WSOP finals at a cost of more than $3.2 million.

Is online poker that lucrative?

In answer to the latter question, online poker is very lucrative. Although no audited revenue figures exist because of the unregulated nature of the industry, Ladbrokes (a licensed online gaming company based in England) released results of a survey that estimated online players worldwide bet about $56 million (euro dollars) a day on poker.

If that is accurate, players are betting about $20 billion (euro) a year. Of course, amount bet doesn’t equate to casino revenue, which is based on the "rake" or seat rental that the online poker room charges its players, just like the bricks-and-mortar cardrooms and casinos charge (estimated at about 3 percent).

Even if the online poker room is raking only 2 percent from the pots, they are pocketing about $400 million yearly in revenue.

That would be about four times the $105 million of combined poker revenue that Las Vegas and Atlantic City took in last year, according to the American Gaming Association.

"There are 60 million people who play poker in the U.S. (and) a lot of these guys get their experience playing online," said Dan Goldman, vice president of marketing for PokerStars.com.

One of the attractions of playing online, Goldman adds, is play is much faster on the computer. A player can find an online game 24 hours a day, seven days a week, and he can play nearly twice the number of games in an hour than he can in a live game.

Goldman says playing online is easy, but players must be aware of restrictions. For instance, it’s a misdemeanor in Nevada to make a bet that goes outside of the state. Players should always check their own jurisdictions.