The Value Of The PokerStars Brand In NJ? We’ll Have To Wait And See

There is a lot of uncertainty when it comes to the impact of PokerStars’ return to the United States (expected sometime this year) will have on the New Jersey online poker market.

Will the company pump millions of marketing dollars into what is a small, limited market? And, more importantly, whether it spends or not, after a five year absence, how strong will its brand be?

This column will focus on answering the latter question by looking at the pros and cons PokerStars brings to the table.

Three reasons the PokerStars brand is weak in NJ

Reason #1: Brick and mortar casinos have a far superior brand

One of the lessons learned over the first two years of online gambling in New Jersey is the overwhelming edge brick and mortar casinos have in local markets. As well-known as PokerStars is, its brand is not going to resonate with as many New Jersey residents as Atlantic City’s casinos do.

This has certainly been the case with the current online gaming sites in New Jersey, with perhaps a single exception.

Ultimate Gaming struggled mightily before closing its doors less than a year after launching in New Jersey.

Caesars’ assemblage of eponymously named online gaming sites (HarrahsCasino.com, CaesarsCasino.com, and WSOP.com) have outperformed the online gaming sites boasting their partner’s brand – us.888.com, us.888poker.com, and us.888casino.com.

The same holds true for Borgata, where BorgataCasino.com and BorgataPoker.com are faring much better than the skins lacking a brick and mortar presence, NJ.PartyPoker.com and PalaCasino.com.

This dynamic wouldn’t apply (or its effect would be diminished) nationwide, as New Jersey’s brick and mortar brands would have little value in say, Texas or Idaho, but in a localized market like New Jersey, a brick and mortar presence has significant value.

Reason #2: Brand recognition strongest with wrong demographic

PokerStars has another problem on its hands, in that the players that remember the brand are the players PokerStars doesn’t really want anymore, and are the players that are the most disillusioned with PokerStars since the company was purchased by Amaya.

Since purchasing the company in August of 2014, Amaya Gaming has made several changes that have not sat well with core customers. From the addition of Spin & Go’s, an online casino, and an online sports book to the more recent changes to its VIP program, poker players have been left with the general impression that Amaya is not only more focused on the bottom line, but that the company is trying to take the “poker” out of PokerStars.

Whether it is the case or not, this is the way serious poker players feel, and it’s these serious poker players (following the global situation from afar) that had been waiting for PokerStars’ arrival in New Jersey. The air is slowly being let out of the balloon, and instead of heightened anticipation there is a general malaise surrounding the launch.

Reason #3: Time is NOT on its side

Finally, when PokerStars launches, it will have been over five years since the company dealt a hand of online poker in the United States. In Internet years, this is a generation. And in online poker terms, where there is a massive turnover rate, five years is veritable lifetime.

Following the passage of UIGEA, Party Poker left the U.S. in late 2006, and returned as partypoker in late 2013. For all intents and purposes, the return may as well have been a launch of a new company, as the brand was almost universally unknown in New Jersey.

However, not all absences are the same, and as you’ll see in the next section, this is one of the great unknowns when it comes to the current strength of the PokerStars brand.

Three reasons PokerStars will exceed expectations in NJ

Reason #1: PokerStars has stayed in the news

As noted above, if you lived in the U.S. and weren’t a close follower of the poker world, partypoker was pretty much out of sight and out of mind from late 2006-2013.

On the other hand, PokerStars has managed, for better or worse, to remain a hot topic in U.S. news – both poker and mainstream media – from the beginning of its hiatus in April of 2011, through its expected launch sometime this year. This is particularly true in New Jersey.

Here is a look at some of the stories that have kept PokerStars in the headlines:

• The Black Friday indictments
• The sale to Amaya Gaming
• The ensuing investigation into that sale by the Canadian AMF
• The company being at the center of a major debate when it comes to online poker in California
• The company’s long, arduous path to licensure by the New Jersey Division of Gaming Enforcement
• The current brouhaha over PokerStars’ changes to its VIP program

Reason #2: I ‘d know him if I saw him

Another key differentiation between the partypoker hiatus and the PokerStars hiatus is partypoker’s software and branding (the color scheme and logo) were completely overhauled between the time the company left the U.S. market in 2006 and its return in 2013.

See for yourself.

Party Poker’s logo and software circa 2006:

 

partypoker’s logo and software now:

 

On the other hand, PokerStars looks basically the same now as it did in 2011.

Reason #3: The Rip Van Winkle effect

Finally, looking at the technological changes between 2006 and 2013 and the changes between 2011 and 2016, there simply is no comparison.

When Party left the U.S. market in 2006, the first iPhone was still months away from being introduced; mobile gaming and apps didn’t exist; Twitter was only a few months old; and MySpace, not Facebook, was the preferred social network.

Basically, 2006-2011 was a period of hyper change.

Conversely, not all that much has changed since 2011, and because of this, PokerStars’ player rolls are far more valuable than anything partypoker had to work with.

Over a year and a half ago, I asked former bwin.party head of poker Jeffrey Haas about the value of PokerStars’ player lists, and while there is a fast turnover, Haas explained why PokerStars’ “outdated” lists are far more valuable: “PokerStars is dealing with old gmail.com addresses, we had old aol.com and hotmail.com addresses.”

Point being, there is a good chance – or a far better chance – the Gmail addresses PokerStars has on file are still active, while most people had long since stopped using their old Hotmail and AOL accounts by 2013.

So, while the length of the absence isn’t much different, partypoker’s absence happened during a period of heightened change.

Think of it this way: If someone went to prison in 2007 and returned in 2011, he’d find a vastly changed online landscape. From smartphones and mobile apps to social media, a ton of new products have emerged. On the other hand, someone sent up in 2011 and released in 2015 would already be familiar with these things; he’d just have to get used to the updates to these products.

Final thoughts

It’s a lock that PokerStars launches with far more fanfare than partypoker or 888, but it’s far from a lock that PokerStars will compete right out of the gate with WSOP.com and BorgataPoker.com.

In the end, your guess is as good as mine when it comes to the strength of the PokerStars brand in New Jersey. Will PokerStars struggle? Will it immediately jump out to the front of the pack? Will the company come in spending, and if it does, will the current operators follow suit?

These are all unanswered questions at this point in time. The good news is, we should have the answer to these questions sometime in the next six months.