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Should Investors Bet Big on Online Poker?

Posted By Robert On Sunday, October 3rd, 2021 With 0 Comments

If you can pardon the pun, the poker industry has always been a bit of a gamble for investors.

The industry has certainly had its high points; the early poker boom saw lots of online companies spring up and plenty of revenue flowing through the sites. Sadly, after the Black Friday collapse, the boom went bust, and trust was shaken. Like any huge collapse, once investor trust has been broken, it is hard to build back up.

Is the industry at a point now where investors should not only trust it, but bet on it making them a profit? In this article we are going to look at the viability of the online poker industry.

Revenue

One thing that attracts investors is profit; the more profit, the more investable an industry becomes. There’s no doubt the online poker industry is worth investing in right now; New Jersey alone hit a monthly online poker record of $93.5m revenue in a single month at the end of 2020. The recent pandemic affected some of that profit; whilst people across the US lost their jobs, gaming revenue increased. Players were forced to take up online poker in the absence of physical locations, which could have inflated the potential returns somewhat. However, even if revenues dip into late 2021, there’s still lots of profit to be had.

The absence of sportsbooks also helped online poker; there were no sports to wager on during the pandemic, meaning other forms of gaming were popular. Even though sport is now back, online poker is popular. Max Bichsel, vice president of an online gaming company, explained: “You’re back to pre-pandemic levels with sports, coupled with the increase in online casino activity. It’s hard to think in retrospect what would have happened without a pandemic, but as the situation stands today, it’s pretty positive for the industry.”

Legislation

Firstly, an industry with strong legislation is trusted, and online poker is certainly tightly regulated. Only a handful of states in the US allow online poker for real money, although others are close to following suit. That strong regulation means operators can set up in those states and have the trust of investors and customers alike. Trust really is the keyword in investing in such an industry, and now it is not just Nevada where online poker is popular.

Threats

There are threats to the industry that might put investors off. For instance, the emergence of poker in casinos might push some players back to physical locations rather than their mobile devices. That split is interesting; in Massachusetts, the MGM Springfield is reopening poker tables, but the Encore Boston is not. In a physical location, poker tables don’t make as much per square foot as slots, and that might see fewer casinos go back to poker, which is a big boost for online providers.

There are also ongoing changes to legislation. Whilst some states are allowing online poker, plenty are still debating and not choosing to go down that route. The industry’s success from an investment point of view hinges on other key states allowing operators to set up, especially those already functioning in the US. If some key states begin to kick back on online poker, the industry could go into remission.

Conclusion

Online poker is an industry many see as a bit shady, but the truth is that it has become more mainstream than other such investments. Take Bitcoin as a comparison; it is a sector fraught with uncertainty, contrasting opinions and an uncertain future. Online poker, seen as a similar risk investment, has a firmer grounding, a more stable future and the basis for real growth. It is certainly an investment to keep an eye on over the coming months and years.

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