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The Rise and Fall of Online Poker
Last week, the U.S. Justice Department shut down online poker in this country, accusing 11 people of bank fraud and illegally operating online gambling sites. You can read about it in the Wall Street Journal Online here and check out the very official notice on PokerStars here and below. I have a bunch of money on PokerStars and dreams of a very independent, lucrative career in poker (ehh, kinda), so I am not pumped about this.
This got me thinking about two things:
The ongoing argument is that poker is truly a game of skill, and not chance, so is poker really gambling? In the short term, luck is a huge factor, but I do believe in the long run, it is truly a game of skill.
More importantly, how amazing has the impact of online poker been to the overall industry?
Major online poker sites like PokerStars, Full Tilt Poker and the defunct PartyPoker have transformed the poker world just like Amazon.com changed retailing - the internet has been a disruptive technology that forever altered the landscape. Just like Amazon gave shoppers access to millions of products and streamlined the purchase process, online poker gave millions of poker players instant access to each other, and thus access to a plethora of poker games at all times of the day. Trips to Las Vegas, Atlantic City or the local cardroom weren't necessary anymore. No more playing (and crushing, if he's reading this :) ) my old roommate heads-up; I had access to full ring games with people from Europe and Asia in the middle of the night.
This easy access for poker players ultimately led to the Moneymaker effect, which sparked the growth of poker shows on TV networks such as ESPN, The Travel Channel, and NBC, and the transformation of poker nerds to celebrity status. This then proliferated a virtuous cycle where poker players saw the potential for riches and fame, jumped online or to the local casino to play, achieved success and TV air time, and became role models for other poker players, and so on and so forth, leading to the explosive growth of the poker industry.
Now a lot of that is all gone. And for what?
Will the poker industry be able to survive without its online component? And what if other brick-and-mortar industries were stripped of their online components? Could they survive?