Start Your Own Poker Site?

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From the degenerate mind of The Fog

The poker world has gone through a tremendous and unexpected boom since Chris Moneymaker won the World Series of Poker in 2003. To truly put this into perspective, you need only look at the number of players to compete in the WSOP Main Event in 2003 compared to the field in 2007. The 2003 WSOP main event had a total of 839 total entrants, this pales in comparison to the staggering 6358 entrants in 2007. This is over a 657% increase in just 4 years.

What does this have to do with online poker rooms? Everything. The big story to come out of the 2003 main event wasn't just that an unknown amateur had won the world championship of poker, but how he had won the $2.5 million dollar first prize from a $39 qualifying satellite on the site PokerStars.

The idea of taking a $39 investment and turning it into millions of dollars attracted many players to test their luck with online poker. The online poker market has worldwide appeal, reaching across disparate countries and cultures. Any person with an internet connection has instant access to play unlimited cash games and tournaments. With this wide a base of international players, there is serious capacity for major profit with your new company.

Online poker rooms make their money by charging players something known as "rake." Rake is an amount of money collected by the poker room for allowing a poker player to participate in both their cash games and tournaments. All major sites collect this fee and its amount depends on the level of buy-in for a tournament and the limit of the cash game. A simple example of this is a small buy-in sit and go which would be advertised as a $10+$1 buy-in event. The $10 of this amount is included in the total prize pool for the tournament and the added dollar is taken in by the poker site for hosting the event. If a site could gain a large enough amount of players to play these real money games, the potential for profit with the right software on this rake could be nearly unlimited. The Sunday Million Dollar Guaranteed tournament which is held on PokerStars every Sunday afternoon which has a typical buy-in of $200+$15, draws in nearly 6000 players each week. This amounts to around a $90,000 weekly profit to the site for hosting a 10 hour tournament. That amount is about equal to the second place prize in that weekly tournament.

In cash games, the rake is calculated as a certain percentage of the pot up to a certain dollar maximum. This is perhaps even more profitable to a site because the number of cash games running at all times is considerable. If you can find a way to stay below what other sites are charging, you could have a major edge in the market with this aspect alone.

As with nearly any business, garnering exposure for your online poker room should be your first step. Getting your name out into the market and having it talked about on and outside of different poker communities should be priority number one. Having your site reviewed by a major poker coverage company and rating site is an important start. If people respect the opinions of the various online poker review sites, it will give you a level of trust with future customers. To attract attention outside of the internet communities, many sites buy television ad space during poker broadcasts. During the new episodes of World Series of Poker, you'll see a large number of different companies advertising. Giving out company paraphernalia and clothing to those at the tables is lower cost marketing technique that has proven very effective.

Increasing your customer base is another crucial aspect of this business. It is imperative that you offer both real and play money games on your site. Just because a player only uses your site for play money games initially is not an indication that he won't become profitable for you in the future. Many of these players are just trying to learn the game and will eventually deposit and graduate to real money games. Once these novice players provide you their contact information, you have a chance to repeatedly market to them through e-mails, keeping them informed about the site and various incentives you are providing.

If you promote good bonus opportunities as well as discounted merchandise opportunities for these players, they will be even more likely to advance to real money games. By sacrificing small expenses here and there you gain the ability to profit greatly in the long run. The key here is offering convenient incentives that few or no others can give to these players. These small differences can really determine if they will continue to play on or recommend their friends to your site. Offering freerolls is a popular and effective marketing tactic used by online poker sites to increase traffic and give the play money players incentives to use their software. These freerolls generally have small rewards but they spark interest.

The online poker market has grown considerably, and will continue to expand in the future. The major players have already done considerably well with the poker boom and the market is open for others to gain entry. With the correct strategy, the potential for profit in this market is nearly unlimited. By following many of the same steps taken by the premier companies, any person with the proper starting capital and the right people can make a very profitable decision by entering this market. As with all gambling, exploiting the house advantage is the best bet.