WPT shuts down ill-starred online venture


WPT Online, the online poker room owned by the parent company of the World Poker Tour, shut its virtual doors to rounders forever at the close of business last night. If you're much of an online poker player, chances are you didn't even notice.

WPT Enterprises, the parent company of both the World Poker Tour and WPT Online, cited "disappointing returns" when it announced earlier this month that it would be shuttering its online poker room, which had been a part of the Cryptologic network since Aug. 24, 2007.

Steve Lipscomb and company's reason for abandoning the operation is testament to the fact that the site never reached the kind of critical mass of players needed for long-term success.

In an industry that can become something like a license to print money for those who are successful, some might wonder how it is that such a well-known television brand couldn't get a foothold in the market.

A late decision and a ripple effect

The 2006 decision by WPT to get involved in the online poker market came fairly late in the poker boom. By that point there were already several major players such as PartyPoker and PokerStars that had been in the business for several years, as well as upstarts like Full Tilt Poker that had managed to grab a significant market share through shrewd marketing.

But there was also enough money out there to be made that WPT's decision to capitalize on its popular brand wasn't a crazy one; the move seemed natural for a company that had helped to create the poker boom in the first place.

Though the decision itself was sound, the manner in which WPT chose to jump into the online gaming market had effects on the rest of WPTE's business.

Since the first season of its television series, WPT had had a cozy relationship with Party Poker, UltimateBet and PokerStars. All three of the rooms sponsored tournaments on the WPT schedule at one point, each with its own exotic locale (a cruise ship, Aruba and the Bahamas) that added flavor to the series.

But when WPT's move to grab part of the online pie made those sites its competitors, they quickly disappeared from the sponsors list.

Party and UB fell off the WPT's Season 5 schedule, and by Season 6 PokerStars had moved its Caribbean Adventure tournament to the 'Stars-owned European Poker Tour. Add the loss of the Aviation Club's Grand Prix de Paris by Season 6, and the WPT began to look more and more like a North American regional poker tour.

The lack of an involved global audience for the WPT brand in 2006 would prove disastrous to its plans for getting a piece of the online poker pie. Just as WPTE was fully moving into the online market and distancing itself from the online poker rooms who had helped to bolster the starting fields of its live tournaments with online satellite winners, elements within the government of the United States were making plans to pass a law that would eventually become known as the Unlawful Internet Gambling Enforcement Act, or UIGEA.

A matter of timing

Just as it is in poker, timing is everything in business - and the WPT's timing with its entry into the online poker market couldn't have been worse.

Once the UIGEA was signed into law by President George W. Bush, the largest online poker market in the world was effectively shut off to the WPT, a U.S.-based business that couldn't afford to run afoul of the law.

Overnight the majority of the players who knew the WPT brand - Americans - were shut off from playing poker on the Internet's only WPT-branded poker room.

The result was that, at a time when the WPT was scaling back on the meat and potatoes of its brand (its worldwide live poker tour), only players in countries that never hosted a WPT event could play in its online poker room.

Meanwhile, WPT Online's main marketing tool - a television show most popular in a market that was offline to the room - was inadequate in a crowded industry that saw more entrants every day. As a result, the site would end up changing networks several times in an attempt to stay alive as the market continued to feel the negative effects of the UIGEA.

Back in the brick-and-mortar world, attendance at WPT tournaments was beginning to drop off as well. Not only were fewer people playing online than in the past, but the WPT also refused to allow its online competitors who did business in the United States post-UIGEA to host satellites to live WPT events.

Some tournaments saw steep drops in the size of their fields; one charter member of the tour, the World Poker Open in Tunica, would eventually be dropped from the schedule completely thanks to a drop in attendance that began in the wake of the UIGEA.

WPTE held on to its short-stacked online poker room for a while, but with the company's stock price at an all-time low, the decision to get rid of the underperforming asset had to come sooner or later.

That it took as long as it did is emblematic of the path the WPT has taken since the newness of the poker boom originally began to wear off: make a plan, talk it up and stick to it no matter what the cost.

Luckily for Mr. Lipscomb and company, though, the market for its other products hasn't been nearly as tumultuous as the online poker market has been since 2006.

Plenty of options for players

WPT Online may not have been able to gain much footing in online poker market, but what few customers the site did have certainly aren't without options.

Players looking for a new home to satisfy their online poker cravings are welcome to check out the many online poker sites available to them in the Poker Room Reviews section.

Best Poker Sites - Editor`s Pick

Latest Blogs »