Gamblers would rather play for free
Why did Ultimate Gaming go belly-up?
Less than two years after launching online poker operations in Nevada, the interactive division of Station Casinos closed up shop in November. Analysts say with online poker limited to just three states in the U.S.?Nevada, New Jersey and Delaware?there weren’t enough players to support a viable internet poker market. Nevada’s deal for intrastate gaming with Delaware made little impact; both states’ online poker revenues have been anemic, and far below initial estimates.
According to a report in the Las Vegas Review-Journal, a second factor worked against Ultimate Gaming, one of three online poker operators in the Silver State: the growing popularity of social gaming.In third-quarter 2014, social gaming generated some $691 million in revenue for operators like Caesars Entertainment, IGT, Scientific Games Corp., Zynga and Aristocrat Leisure, according Eilers Research gaming analyst Adam Krejcik.
“It was another record quarter for the social casino game industry, as mobile continues to drive industry growth,” Krejcik said in a call with investors. “Mobile accounted for 54 percent of total industry revenues.”
Social gaming includes free-play versions of blackjack and other casino games. It is easily accessed through ubiquitous social networks like Facebook. Revenues come from minimal fees paid to buy gaming tokens. Social gaming is growing as more people play on mobile devices like smartphones and tablets, according to the Review-Journal.
Caesars Interactive, which owns and operates the World Series of Poker, is the leader in social gaming. Other big names include Slotomania and Playtika. The sector generated more than $150 million in revenues during the third quarter. And IGT’s DoubleDown Casino won $75 million during the quarter.
Other gaming equipment suppliers, including Ainsworth Game Technology, Konami Gaming and Multimedia Games are also getting into the action. California-based PlayStudios, run by former Wynn Las Vegas President Andrew Pascal, provides social gaming for MGM Resorts International and recently signed a deal to do the same for Station Casinos.
Ultimate, which launched in April 2013, was the first real-money online poker website in the U.S. It was joined in November of that year by WSOP.com. In September, Ultimate backed out of its plan to manage online operations for the Trump Taj Mahal in Atlantic City, now on the verge of closure. It closed for good on November 14.
The Nevada market, with its small population, “cannot support more than one operator,” Krejcik said. “So it really was just a matter of time and how long a company was willing to withstand losses before closing down.”
