Poker operators look to Asia for next boom

With growth stagnant in poker’s traditional strongholds of North America and Europe, operators are beginning to look towards Asia for markets which could kickstart a second boom.

Denmark’s online poker market, for instance, has declined 25 percent since 2012, despite robust growth in the sports betting and casino verticals, meaning emerging markets in Asia and South America have become the new focus.
The global online market continues to be dominated by Amaya, owner of the PokerStars and Full Tilt brands, which is understood to account for around 70 percent of worldwide online revenues and has set itself an internal goal to double the size of the worldwide poker market by 2020.
The Toronto-listed operator is now once again active in the US after being granted a New Jersey licence at the end of last year, but a regulatory headache will likely keep it out of most states for the foreseeable future.
In recent months, PokerStars has been recruiting a number of online professionals in China for endorsement deals, and in September it announced Taiwan’s Chen-An Lin and China’s Yaxi Zhu had been added to its list of sponsored players.
Since PokerStars became a listed company following 2014’s Amaya takeover, it has had to assume a more conservative stance on Asia’s grey markets. In that year it pulled out from a number of such markets, including Malaysia and Pakistan.
However, it has also redoubled its lobbying and marketing efforts elsewhere across the continent in hope of longer-term reward. News that Amaya CEO David Baazov will attempt to take PokerStars private once again will give the operator considerably more room for manoeuvre in such markets.
Perhaps the most encouraging of the grey markets is Russia, which last year saw a government-commissioned study conclude poker should be reclassified as a game of skill, opening the door to regulation.
“It is very clear that [the Russian government] would like to regulate poker,” Baazov said during an analysts call last August. “Obviously that is something we feel is very positive as we do not think the Russian market is even close to saturation.”
Russia is already a major market for online poker operators and by some estimates around 8 percent of the global player pool is based in the country, a result of the ineffectual enforcement of the current ban.
While legislation in Russia would be a major breakthrough for the vertical, the biggest prize for Amaya and other online operators remains China.
PokerStars has been steadily building its presence in the market in recent months. As well as signing online professionals the operator has hosted land-based events on the mainland and in Macau. Such events have not always been welcomed, however, with police in Nanjing raiding and shutting down a PokerStars-sponsored event in April last year.
According to Loic Muller, from Asian poker portal So Much Poker, the Nanjing raid marked the end of an unofficial tolerance of poker tournaments in the country, although the government is understood to be considering regulating these land-based tournaments.
There are more encouraging signs in markets where poker is already legal and regulated. According to figures from the Global Poker Index, the number of live events in the Philippines increased 73 percent year-on-year in 2015, with the number of player entries up 66 percent to 15,258.
In Macau too, there was modest growth for live poker, with the number of events up 22 percent and number of players up 5 percent in 2015, despite the wider difficulties operators have experienced.
Although this is encouraging, Alexandre Dreyfus, CEO of Mediarex Sports & Entertainment which runs the Global Poker Index and the upcoming Global Poker League, told AGB that poker will never be considered a success in Asia if judged on the same metrics as casino games like baccarat.
Instead, he said a broader vision of poker as a “mind sport” could see it evade strict regulations to grow quickly in Asia, especially if the Chinese government proceeds with tentative plans to regulate the land-based form.
Dreyfus said the Global Poker League, which launches this month and looks to “sportify” poker by repackaging it as a spectator sport, raised $4.9 million of venture capital in Beijing and Hong Kong last summer, and will include a Hong Kong-based team led by PokerStars pro Celina Lin.
Without the cultural capital poker enjoys in the United States and to a lesser extent Europe, the game’s long term success in Asia could ultimately rely upon shifting perceptions.
There are signs that this process is beginning to accelerate, even in seemingly impenetrable markets.
In India, poker enjoys “game of skill” status and there are a handful of domestic online operators in the country which operate legally, including Star Poker and PokerBaazi.
“Poker is becoming more and more popular every day and online poker operators are playing a big role in creating an awareness for poker in India,” Jaydeep Chakravartty, commercial director at Ingenuity Gaming, told AGB.
Chakravartty noted that poker is beginning to overtake more traditional card games, including rummy, in terms of popularity, particularly among younger players.
At this stage opportunities for foreign operators remain limited, in part because of a recent act passed by the government which has made transferring funds to offshore gaming companies a criminal offence.
But nonetheless the major foreign poker operators have maintained a presence, with Amaya continuing to to employ a country manager for India.
If poker can continue to evolve its image across the continent, both online and in casinos, it could yet position itself as the vertical best placed to exploit any wider moves towards wholesale regulation in markets which have so far remained closed.