Is UIGEA a major marketing opportunity?

by Lou on October 12, 2006

With enactment of the Unlawful Internet Gaming Enforcement Act of 2006 the world of online gaming turned upside down.Until enactment, the online gaming industry was undergoing a rapid period of consolidation.

That’s not unusual. In fact, it’s commonplace in maturing industries. Just look at how many car manufacturers there were at the dawn of the automotive age, or how many computer makers were around 15 to 20 years ago.

As an industry matures, the big and the strong eat the smaller and weaker competitors. But with enactment of UIGEA and the pull-out of industry leader Party Gaming from the field, it’s the smaller, more nimble poker rooms that look like they’ll benefit by sticking in the US market and going after Party’s abandoned customers.

The poker analogy is all too obvious. Whenever a pot is checked twice, you’re almost guaranteed to win it simply by betting when it’s your turn to act. It’s called an “orphaned pot.” And those formerly playing on Party are “orphaned customers.”

The quick, the sleek, the nimble, the savvy marketers who can act quickly stand a good chance of picking up all those former Party Poker players who now have no place to go, but are still looking to play poker somewhere in cyberspace.

While all of the online sites are talking about Asia being the next big market to open up, there’s an open market right here in the United States, with plenty of players who are not being served. And while some operators are leaving the US market, others are probably salivating at the chance to go after any abandoned customers.

It wouldn’t surprise me one bit if the topic of Party’s abandoned players were the subject of much discussion at the e-gaming conference that’s going on right now in Barcelona.

While the Unlawful Internet Gaming Enforcement Act of 2006 is already an unmitigated disaster in terms of eviscerating wealth that’s been built up through investment in publicly traded sites, in terms of violating US treaty obligations with the World Trade Organization, and in terms of trampling on an individual’s right to do what he wants with the money he’s earned, an unintended consequence of this law seems to be the creation of what figures to be a marketing opportunity of land-rush proportions.

There will be winners and losers in the shakeout that follows enactment of UIGEA, and none of us can accurately predict the results right now. What we can be sure of are interesting times, and a new landscape that might look much different than the one we had all grown accustomed to.

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