The Advent of Online Poker

As is readily apparent from the opening episode, online poker plays a significant role in the world of Quorum: The Gambler’s Tale. But while our story is most assuredly a work of fiction, it does take place against the backdrop of real historical events — and while we take more than a few creative liberties in the interests of storytelling, I thought some background on its real-world underpinnings might prove illuminating.

Poker has historically been thought of as necessarily an in-person activity. At least part of the game’s allure has always been in the interactions between players, and popular wisdom holds that winning is less about the cards a player holds than it is about the ability to “read” the opposing players. And a game whose primary purpose is not just the activity itself, but the opportunity for camaraderie and personal engagement. The fact that it doesn’t require any specialized casino equipment — and doesn’t advantage a “house” over any individual player — makes it ideal for venues ranging from a casino operation to a friendly neighborhood gathering. So on its face, it seems an odd choice of game to transition to digital play (except perhaps as a learning exercise or a modest diversion), where the social aspect is removed almost entirely.

Still, there was at least some incentive for capitalizing on the game’s enthusiastic player base. Most people (at least in the American market) don’t live within range of a casino, making (legal) play options a fraction of what they could otherwise be. Moreover, traditional casinos were not especially interested in promoting the game, given its comparatively low margin compared with other games (even with a house percentage, or “rake”). And just about everyone knows how to play, at least in broad strokes, making it a potential draw for a large number or people of varying skill levels.

This last point actually led to another major (if largely unspoken) appeal: For those experienced players interested in making significant money playing the game, a larger player pool — especially one made up of capable but comparatively inexperienced players — could significantly expand the amount of “easy money” in play. Combine that with the increased rate of play online, where savvy players can play multiple “tables” at once, and the potential financial payoff for such players is substantially increased.

From the organizing site’s perspective, with revenue based on percentages of each game’s winnings, the massive number of potential tables in play made for a commensurately large revenue opportunity — as contrasted with live casino play, where physical space (and time) constraints limited such potential.

Early on, one of the biggest obstacles to setting up an online poker site was the questionable legality of such an enterprise. Given the differences in state laws (not to mention less-than-clear federal guidance), it was an open question as to whether such an operation would be on stable legal footing. Would a player physically located in a state where such games were illegal even be able to play on a site located in a state where it was legal? Or would federal limitations on interfering with interstate commerce render everything legitimate?

Another obstacle to establishing a credible online game — particularly where real money is involved — is the issue of trust. How could players know the systems running the game (not to mention the people behind those systems) were handling both the game and the players’ accounts responsibly?

Despite these obstacles, several entrepreneurs opted to give it a try. By establishing companies headquartered (even if largely on paper) outside the United States, they attempted to skirt around the ability of U.S. (or individual state) regulators to interfere. And by recruiting top-notch coders and slowly building trust in their computer systems, these sites gradually built up a significant player base, apparently outside the reach of American law.

The first major site to offer real-money play, PlanetPoker, debuted in 1998, endorsed by professional poker player and author Mike Caro. Despite early software issues, the site was able to keep its business by virtue of being (for a time) the only option available. That changed when a competitor, Paradise Poker, entered the market the following year, with improved software, more reliable servers, and a wider variety of poker variants available. But 2001 saw the biggest leap forward in terms of customer base with the launch of PokerStars and PartyPoker, both aided by widespread marketing campaigns (including television and print advertising). In 2002, PartyPoker instituted a tournament with a guaranteed $1 million prize, an absolutely unheard-of amount.

As a draw, online sites began offering “satellite” tournaments — games where in addition to taking the cash prize, the winner would earn a seat at a high-profile live poker tournament. This became a massive boon for the online poker industry when Chris Moneymaker won such a satellite tournament, and went on to win the Main Event of the World Series of Poker in 2003.

Other major players in the online poker world were UltimateBet (launched in 2001), 888 (2002, originally called Pacific Poker), Absolute Poker (2003), and Full Tilt Poker (2004). By this time, the marketing model for these sites was fairly well standardized, with professional poker players quickly aligning themselves with one site or another. In one case, Doyles Room, the site was inextricably tied to its namesake, poker mainstay Doyle Brunson. And in the case of Full Tilt Poker, professional poker players were not just spokespeople, but actual principals behind the site. Poker-themed television programs became synonymous with their online-site sponsors (and multiplied rapidly).

Online poker was now a reality. But in the years to follow, business would hardly be smooth…

~William R. Coughlan, writer/director of Quorum

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