Archive for October 4, 2006

Black Friday: Nolan Dalla

October 4, 2006

Nolan Dalla’s view of the ramifications of the online gambling bill. Full article here.

As to the impacts on poker and sportsbetting, this new law is going to be DEVASTATING. Especially for poker.

Consider that:

A. If poker sites cannot accept deposits from US players, that will kill 70-80 percent of the overall market. The question becomes — is there enough of a remaining market and enough contributing players in smaller markets to sustain operations and expansion? Perhaps. But it will take years, if not a decade to return to what has been the golden age of poker.

B. Online poker sites and sportsbooks will no longer be able to advertise (.COM-related services) inside the US. Media outlets will simply refuse to accept the ads. This includes print, television, and radio. Consider the implications. Thousands of new players were signing up daily at various sites. All of that vanishes. Sports gambling is less-reliant on advertising. However, the loss of the US market will force unforeseen changes in how these businesses are run, especially those companies that have multiple-gambling related products, such as BoDog, Paradise, etc.

C. Online betting sites will likely not be able to post banner ads and links to gaming sites, especially those based inside the US. “Aiding and abetting” laws could result in arrest and prosecution for those who provide links to US residents. Poker magazines, online betting forums, and even MadJacks could suffer. I remain uncertain as to how severe this impact will be, especially at MadJacks. But for the hundreds of poker sites/sports sties and blogs out there that are dependent upon online poker and sportsbook advertising, many will go out of business. Once again, this might not seem a big issue to everyone, but these are the pioneers who are bringing in new poker players and sports bettors and when they dry up, the market shrinks and everyone is adversely affected.

D. Many sites use what are called affiliates. Persons who are affiliates and live inside the US will now be subject to arrest and prosecution, particularly those who do not block financial transactions from the US.

E. The celebrity poker culture around star poker players will diminish. One poker site is heavily branded to many big names. Now, these players will no longer be able to promote their sites inside the US. Hence, their value and stature diminishes.

F. Big events like the World Series of Poker, which attract meany players and great interest from online poker sites, could decline in size for the first time in history. I am most sensitive to commenting upon this event because I still have a longstanding association with the WSOP. However, anyone who looks at the situation must conclude that the WSOP and major poker tournaments will be hurt by this new law.

G. Online gaming sponsorships of various products and services will decline. For instance, Golden Palace ads in boxing arenas, NBA stadiums, and on halftime shows will diminish, if not end completely. PartyPoker ads that are seen regularly on TV, on all stations, will fade away. Millions in advertising revenue will be lost by media companies (which begs the question (why were they not fighting this legislation?)

This article would be fairly reasonably classified under the “pessimistic” category. ChrisV and others are more optimistic. However, ChrisV and many others have another career to fall back on if they’re wrong. Dalla and I don’t. We can’t afford not to think about the worst case scenario.