Online Poker Industry Suffers As Growth Declines Further

According to the latest Mintel report, the poker boom of 2004 to 2007, which produced spectacular growth of 72%, has now stagnated with the forecast for 2009 predicting a further 7% fall in gross gaming yield to £247 million, down from £265m last year.
Mintel senior leisure analyst Matt King, commenting on the report said: “Poker revenues have clearly peaked. The recession is the most obvious culprit, with around a third of poker players now playing less often or for lower stakes because of the economic downturn.”
Highlighting the change in consumer behaviour, average spend per year was down by 20% over the past two years from £345 in 2007 to £281 in 2009 and as Paul Leyland, gaming analyst at Collins Stewart, explains:
“The problem you face with poker, as opposed to other forms of gambling, is that you need volume to make the model work. You can’t just focus on high rollers, as you might with a sports book or a casino. You have to bring volume in to supply your higher rollers with people to play.”
Analyst Matt King believes that “there may be other inherent problems that the industry has to address” in order to remain competitive, and said:
“Rakeback promotions, for one thing, are minimising margins, and this shows the emphasis is on customer numbers, not the profit generated per customer. Lack of time is another factor impacting on play, possibly suggesting work pressures in the current recession are having a toll on players’ free time.”
However, there are still many positives for the industry including a loyal customer base, faster broadband, social acceptance of online gaming and a European poker market, unhindered by American type draconian laws, that is expected to show strong growth
With all factors considered, the world wide online poker market is expected to grow to $6.2bn (£3.7bn) by 2012, representing a 12% compound annual growth rate over four years.
John Shepherd of PartyGaming commented: “Given the backdrop of the recession, yes, growth has been impacted, but then if you look at the overall picture, the market has still grown.”