Economic Engine: Assessing the Contribution of Online Poker to the Economy
Online poker was a global phenomenon during the 2000s. The rise of online poker during the poker boom was something that will never be replicated. The industry had few barriers to growth, and it showed. Poker was everywhere, and much of its inescapable prevalence in many aspects of society was due to the rapid evolution of online poker.
At the heart of the poker boom was online poker.
From 2007 to 2011, governments and their attempts to regulate the industry started to restrict the growth of the industry. And Black Friday cut it off, setting it back and impeding future development, ultimately making it unlikely that the poker boom could ever be reignited or replicated.
Even so, the game perseveres in its various forms, segregated as it may be and at a fraction of the scale it once did. Online poker possesses great potential, but few markets are willing to embrace it. However, when combined – as it generally is today – with other forms of igaming and sports betting, online poker remains an important part of the global economy.
Difficulties of Assessing Precise Online Poker Power
Research upon research will leave even the most dogged reporter with few statistics regarding global online poker revenue. The reasons for that have changed over time but remain an impediment to showing the true power of online poker in the global economy.
The process of obtaining online poker revenue figures in the 2000s stemmed primarily from the sheer number of websites in operation, the vast majority of which were not publicly-traded companies. Most of them released no data to the public, as they were under no obligation to do so.
In the 2010s, online poker became much more segregated, not only by company but by country. This was one of many complications:
- Companies had to operate separate online poker sites in various markets, such as France, Italy, Portugal, Spain, Canada, India, Brazil, and so on. Per government regulations that varied by country, operators had to pull online poker from some markets and launch in others. And in places like the United States, companies had to obtain licenses and operate in separate states. The fragmented nature of online poker made it nearly impossible to obtain revenue numbers and combine them into any consistent year-on-year analyses.
- Larger, public companies often combined online poker revenue with that of online casino games and sports betting. They reported “online gambling” revenue as a whole.
- Some of the larger entities in the online poker market were – and still are – not public, like GGPoker. Others operated offshore and sometimes without licensing, which necessitated keeping their books private. In fact, some of those poker operators didn’t – and still don’t – reveal information about their parent companies, such as location, license, and most certainly revenue.
Firms that specialize in data research sometimes obtained enough data from which to conduct statistical analyses and forecasts. However, those are often prohibitively extensive for the average journalist or media outlet, as those studies and reports are compiled for companies in the industry.
General Online Gambling Numbers Available
Many of the aforementioned reports combine online poker with other forms of online gambling.
Statista is one of those companies that examines the worldwide online gambling market. The breakouts are sports betting, online lottery sales, and online casinos, the latter of which includes online poker. The global revenue online gambling numbers are:
- 2022 revenue: $76 billion
- 2023 revenue: $89.4 billion
- 2024 projected revenue: $100.9 billion
- 2029 projected revenue: $136.3 billion
- Annual growth rate (CAGR 2024-2029): 6.2%
- 2029 number of projected users: 281.3 million
Wildly Varying Online Poker Numbers Available
Research and Markets offers a widely-cited online poker industry review and forecast. The report summary provides interesting numbers but ones that contradict and nullify the Statista numbers for the broader igaming industry. The following numbers pertain to the global online poker market only:
- 2022 revenue: $59.35 billion
- 2030 projected revenue: $155.36 billion
Since it is impossible that the global online poker market will surpass the entirety of online gambling, including the dominant revenue generator that is sports betting, there is some erroneous information in one of the two reports.
Ultimately, this is an example of the complexities of determining even an approximate online poker revenue number. Further, it impedes the creation of an estimate of online poker’s true place in the online gambling world and, especially, in the larger global economy.
Economic Contributions of Online Poker
While it is not possible to put dollar amounts on the economic contributions of online poker to the global economy, it is realistic to state the benefits in a more general sense.
An online poker operator contributes jobs to any economy in which it operates. There are technical and poker experts needed to run a proper site, as well as game monitors, a cybersecurity team, customer service representatives, graphic designers, and people in various management positions. This is for any market, no matter how small.
When an operator can combine its platforms in various markets, such as joining sites across state lines in the United States via the Multi-State Internet Gaming Agreement (MSIGA), it only solidifies employment positions. As the site grows in player activity, more employees are required to monitor play, ensure player safety, and handle issues like advertising and marketing that will facilitate further growth.
Online Poker: A Unique Revenue Stream
The revenue generated from online poker is a fraction of that delivered by online casino games. This is because those games maintain a house edge or advantage, guaranteeing that the operator wins more often than the players. Poker, on the other hand, is a player-to-player game, one in which a player always wins. The operator takes a fee for providing the service, but that fee doesn’t depend on whether a player wins or loses.
The player-to-player model for online poker is the reason it is so popular and attracts so many career players. The game’s skill components allow players to maintain a winning record over time – with the proper skills, of course. On the other hand, it reduces the amount of revenue the game can generate. Revenue isn’t dependent upon player gambling losses but is determined by the sheer number of players at the tables.
However, online poker players do enjoy other games. Many players cross over from the poker tables to sports betting verticals and even some casino games. As poker can spend many hours at a time in cash games or tournaments, the other verticals provide alternate sources of entertainment. The various parts of an igaming platform do complement each other.
Local to National to Global Reach
Online poker can generate revenue, add to employment, and provide an entertainment asset in any economy in which it operates. When done on a small scale, a single state or nation can benefit. If poker operators are allowed to combine their platforms across state lines or country borders, however, the reach extends many times over.
When a company must establish a server and home office in every state or territory, pay for a license and hire employees in that region only, onerous obstacles increase. Few companies have the financial and legal ability to spread themselves so thin. That keeps competition low and limits the benefits to players from a healthy and strongly competitive business environment.
When governments allow companies to combine their resources across borders, this reduces the overhead for the companies and allows them to invest more into their offerings for players. Each government still collects its revenue for licensing and collects taxes, while the licensees can use their resources more wisely.
The other benefit to online poker crossing borders – or even oceans – is for players. Larger player pools enable companies to offer more game varieties, stakes, and higher prize pool guarantees. As sites expand their reach on a single poker platform, interest grows and the overall industry grows.
Other Benefits of Allowing Online Poker Expansion
When governments open themselves to online poker and other forms of online gambling, they benefit in other ways, most importantly the control over illegal gambling.
Since money laundering and cybercrimes are a concern whenever online businesses are in operation, governments must implement regulations and oversight for gambling control. Monitoring players and transactions is necessary to prevent crimes that can thrive in online spaces. The more opportunities allow online poker to expand, however, the more that governments can work together to monitor these spaces and share information. It reduces expenses and increases the likelihood of spotting bad actors.
The same principle applies to responsible gambling. Each government that allows online poker to operate as a licensed business must develop a regulatory framework and establish responsible gambling resources for players. On separate platforms in different states and territories, the costs can be onerous. When the platform expands to cover more area, though, it provides the opportunity to use a more standardized framework with more reach.
Online Poker Potential
No matter which figures one may use from the aforementioned studies and reports, online poker is a multi-billion-dollar industry. It contributes more than $50 billion to the global economy currently, and studies show that number may double or triple by the year 2030.
There are ways to expand that industry.
- More states, provinces, territories, and countries can legalize and regulate online poker.
- States, provinces, territories, and countries can permit licensees to connect their platforms across borders to expand player pools.
- Governments can legalize online poker along with sports betting, the latter of which is legal in many more states and countries than is online poker.
- Companies can invest money into research and studies that show the growth potential for online poker while also dispelling myths, such as land-based casino revenue cannibalization and increased underage gambling.
Some of the impediments to said expansion for online poker can be eradicated by these actions. By educating legislators and government officials about online poker and dispelling the myths, there is a much greater likelihood that they would be more open to legalizing and regulating the game.
If this happens, the popularity of offshore online poker sites will dissipate. Operators that are not licensed and run with no oversight except the poker community itself will lose their popularity if players have more legal and regulated options to access.
The full potential of the online poker industry will only be realized if all of the pieces of an increasingly fractured puzzle come together.
