Just weeks after their exit from New Jersey, Ultimate Poker has ceased their entire US operation after pulling Ultimate Poker Nevada too. UP made headlines by becoming the first legal US poker site in history, opening their cyber doors in April 2013. And they garnered a significant share of the Nevada market since their cash game traffic hovered around 50 players an hour (according to PokerScout).
But in the end, low-quality software, being confined to Nevada, and tough competition from market-leader WSOP.com doomed UP. Tom Breitling, Chairman of UP’s parent company, Ultimate Gaming, issued the following statement about the insurmountable obstacles:
“As has been the case in other jurisdictions, online poker revenues in Nevada have fallen far short of original projections. Moreover, the state-by-state approach to online gaming has created an extremely cost-prohibitive and challenging operating environment. These factors have combined to make the path to profitability very difficult and uncertain. Consequently, we have decided to cease operations.”
While not a total surprise, it also seems weird that UP would fold up in Nevada so quickly after their New Jersey exit. After all, Breitling still seemed optimistic about the Silver State by saying, “Ultimate Gaming will continue to focus on improving its online poker product and overall customer experience in Nevada.” Now that UP is off the market, what does this do for the state of US online poker?
WSOP.com is the only game in town…for now
Since Ultimate Gaming announced that they’re shutting down, this leaves WSOP.com as the only realistic option in Nevada. Real Gaming is also available now after coming out of the soft-launch phase, but it’s hard to see much traffic migrating there in the near future. WSOP.com NV currently averages 120 cash game players an hour. So they should see some of the 50 hourly players from UP on their site.
However, it’s worth mentioning that the All American Poker Network (AAPN) will soon be coming into Nevada and adding more competition. And since the Silver State offers a pretty limited market of 2.76 million residents (plus Vegas/Reno tourism), there aren’t many players to go around.
Other states will be wary of legal online poker
Multiple other US states are looking to the iGaming markets in Delaware, New Jersey and Nevada to see how they perform. And since Ultimate Gaming failed in its short 1.5 years of existence, other states will see this as one more red flag when deciding whether or not to regulate online gaming. Of course, this doesn’t look to stop a state like California, which seems set on legalizing iPoker next year.
A little momentum for Sheldon Adelson’s RAWA
The most disgusting part of UP’s shut down is that it will give Sheldon Adelson’s cronies more ammunition for the Restoration of America’s Wire Act (RAWA). This isn’t to say that RAWA – an effort to completely eliminate US iGaming – will actually pass. However, Ultimate Gaming becomes another reference for Adelson to use as a reason why iGaming isn’t/won’t work in America.
From an overall perspective, though, there’s still lots of potential for US online poker. But that potential certainly won’t be reached if more states – especially larger ones like California, New York, Illinois – don’t start regulating online gaming in the near future. And until then, iGaming companies will continue struggling in the US.