During my early days on the virtual felt I had designs on constructing a poker site for noobs and I gathered quite a bit of basic information in preparation. I didn't quite get my finger out so the idea never got off the ground but I figured the following was worth sharing.
1997
Online poker was a text only affair with no real money involved. It was played on Internet relay chat (IRC) and was mainly a geeks only affair (including Chris Ferguson and Greg Raymer).
In January Planet Poker became the first online poker room. Initially the only game available was $3/$6 Limit and there were only a handful of players sitting at any one time. Others came along like Delta Casino (who used the same software) but until late 1999 Planet ruled the roost.
1999
The first big player entered the market, Paradise Poker. The site offered Omaha, Seven-Card Stud and Texas Hold'em. The graphics were slick and the software was far faster than its competitors.
Paradise success was largely due to the failure of others. Planet Poker (and others) were found to be using a number generator that could be cracked. They never really recovered from this and by the end of 1999 Paradise Poker became the overwhelming market leader.
2000
Before the end of the year UltimateBet entered the marked and used some of the games biggest names to promote the site. Their choice of Phil Helmuth marked the first time the now common player sponsorship model was used.
Although UltimateBet started to gain a share of the market Paradise were still dominant. By the end of the year Paradise had introduced No-Limit cash games and many of the features we now take for granted such as showing the average pot size in the lobby.
2001
Before 2001 tournament poker didn't really exist. The majority of Paradise pokers 50k players were grinding it out on the limit cash tables. Some of the other sites were running sit and goes and the odd freezeout tournament but online poker was very much a cash game affair.
Partypoker then came into the market with other ideas and they launched by running a huge series of tournaments that culminated in a $1m Main Event on a cruise ship. This was the first $1m guaranteed tournament offered by any online poker site.
In October Pokerstars was launched with the intention of becoming the home of online tournament play. Its first promotion included a $50k guaranteed tournament with a $215 buy-in.
2002
World Poker Tour made its debut on the Travel Channel in the US. It created a huge interest in tournament poker and gave online sites a place to advertise. As a result those sites offering big money pay days started to see huge increases in traffic and this is when the poker boom really started.
The biggest beneficiary of this boom was PartyPoker. They went from nowhere to being the largest online poker room within 2 years. By the summer of 2003 when Chris Moneymaker had persuaded the whole world that anyone could win big it had more players than all of its competitors combined.
Paradise saw its market position fall fast, mainly because it wasn't as yet offering any MTT's. Pokerstars was growing fast and whereas Partypoker used MTT's to get players into their cash games, Pokerstars used MTT's as the end product.
Europe finally took notice and ladbrokes launched its online poker site. They concentrated on the UK and Scandinavian markets and were surprisingly popular. Then many other sports betting companies jumped on the bandwagon. At this time 80% of the online poker market was the US where PartyPoker was easily winning the battle. The bigger it got the more it advertised on TV which led to yet more new players signing up. It soon had tens of thousands of players online at any one time and by 2004 it was making over $1m profit a day.
Suddenly everyone wanted a piece of the action. Most joined through the network model which allowed big firms to enter the market far quicker than if they had to develope their own software.
2004
More start-up sites were entering the market, most notably Full Tilt. It was fronted by some of the biggest names in poker including Chris Ferguson and Howard Lederer (who were also involved in the software development).
Poker Pro's have always had a big role in the industry but Full tilt made the pro-led strategy their own. Soon the site had most of the biggest names in poker appearing in TV ads and in a surprisingly short period of time Full Tilt became a major player in the market.
2005
Hundreds of thousands of players were logging on every day across the industry. Poker firms started to go public by selling their shares on the Stock Exchange.
UltimateBet joined Partypoker on the London Stock Exchange with Pokerstars making preparations to follow suit. The whole industry seemed obsessed with cashing out and going public and some of the big players started buying up some of the smaller rooms.
2006
On Friday the 13th of October the Unlawful Internet Gambling Enforcement Act was passed making funding from an online gambling site illegal and everything went into chaos.
Partypoker was the first to react. As a public company with shareholders to protect it could not expose itself to the huge risk to its business so it cut off all US players (80% of its customers) sending its share prices tumbling. Other rooms followed including paradise, iPoker and Cryptologic networks and Ultimatebet sold up and remained open to the US market.
This meant that anyone willing to continue taking US business stood to make a killing. Pokerstars and Full Tilt have always been private companies and reaped the rewards with the former replacing ParyPoker as the worlds largest online poker room.
To Be Continued.....
