In the heady days of the online poker boom, Betandwin paid $570 million for the Ongame network. At the time, the deal made the company that was to become Bwin the most valuable gambling company listed on the world’s stock markets.
Presumably, attempts have been made to sell the brand, but the final closure indicates that the buyer interest just wasn’t there.
According to figures from Poker Industry PRO via PokerScout, Ongame cash game traffic peaked at a seven day moving average of over 4,800 occupied seats in April 2008.
Traffic declined precipitously after Bwin moved its players to the partypoker platform after the two companies merged. By the end of 2015, liquidity had dropped below an average of 200, although it has remained above 100 occupied seats for most of 2016.
Cash game traffic is not a perfect indicator of success, but as a proxy measure it is a reasonable indicator of performance over time, and to some extent in comparison with other similar poker rooms.
Under NYX ownership, Ongame received its fair share of development money. NYX switched the poker room’s main currency to Euros, added new games and produced a capable mobile client. It also secured a Bulgarian gaming license (paywall) in an attempt to get a deeper penetration of the regulated European market.
Nothing it did made a major difference to the weak traffic Ongame was attracting. And finally in April 2016, NYX sold most of Ongame as part of its deal to buy Openbet.
“As part of the agreement, a partner with proven experience in the industry will take on all costs, customer contracts and development for the poker product. NYX will retain both a significant share of the new business and exclusive rights to use the poker product across North America.”
Of the thirteen skins remaining on the network, it appears that the largest will be moving across to the MPN—formerly Microgaming—network. Players will be able to transfer their account balances, but will lose the value of any loyalty scheme points that they have.
RedKings Poker has just completed its migration to MPN, and Evoke Gaming is moving its main brands RedBet Poker and WhiteBet Poker across shortly.
MPN is a poker network in resurgence at the moment. A couple of years ago it took some big hits after Unibet and Ladbrokes left for the apparently greener pastures of a proprietary poker platform and the iPoker network, respectively.
However, the decision by PKR to move to MPN in March this year added enough liquidity to put the MPN network into the top ten global poker rooms/networks measured by cash game traffic.
PKR took advantage of MPN’s new Babelfish technology which allowed it to retain its distinctive 3D poker client while still accessing the much higher liquidity of MPN’s player pool.
MPN currently sits at number 8 in the rankings, but is virtually neck and neck with iPoker and partypoker. The extra traffic added by the Ongame rooms could help it move up into the top five.
Whether it is higher gaming taxes squeezing margins, the cost and complexity of complying with national gaming regulation, or just the general decline in interest in playing online poker, smaller poker rooms are struggling to make profits.
There aren’t any published figures to inform observers of the extent to which NJ online poker sites are profitable or not, but Ongame’s closure suggests that profits for state regulated operators may be marginal at best.
In a blog interview on partypoker this February, Head of Poker Tom Waters indicated his perception of the how the poker industry will change over the next couple of years:
“Smaller operators are going to struggle to survive without merging and I think that for poker, we will be left with 5 or 6 sites competing for the majority of the .com market in 12-18 months.”
Another poker room operating in the regulated dot-com sector that has lower traffic than Ongame is TonyBet. Earlier this month, on September 9, TonyBet was acquired by Betsson, to be merged into its existing operations.
So far, Tom Water’s prediction of further mergers over the next year looks to be spot on.