Starting a Poker Website

There are now more than 200 poker sites on the Internet, with no end in sight to the poker boom. Are you curious about what is involved in starting a poker website? Many interesting ingredients areBob Ciaffone is one of America’s best-known poker players, writers, and teachers. He has numerous poker tournament wins and placings, the most prominent being third place in the 1987 World Championship. He has been a poker teacher since 1995, with his students having earned well over a million dollars in tournament play.  Bob's website is www.pokercoach.us  discussed in this column, such as how much money is needed, how to raise it, where the money goes, what the problems are, and so forth. Since Card Player [Editor's note: this article was originally published in Card Player Magazine] has lots of poker websites as advertisers, and wishes to treat them evenhandedly, I will not use any proper names in my column. But you will still be able to picture the situation.

I have some ties to a number of poker websites, which is only natural. A person like me who is well-known as a result of writing a Card Player column, authoring poker books, and a lifetime connected to playing poker receives a lot of attention from sites in this highly competitive industry. Here is the story of how I became heavily involved with a new website that's due to go online soon, and how this site was put together.

A longtime friend of mine is Doug Young, a Canadian poker player and writer, whom I had not heard from in quite a while until this year. Doug called me this winter and told me about a Canadian group that was putting up a new poker website, one with which he would be involved, and suggested that I talk to some of the people who were doing the project. He arranged for me to meet in March at the Reno tournament with the president of the parent company for this endeavor, who had heard good things about me and was interested in having me work for him. As a result of that meeting, I took a two-day trip to Toronto in April, arriving late on a weekday evening.

My Canadian hosts made a good initial impression on me by arranging for a comped room in the Westin Prince Hotel in Toronto. That is like someone from Vegas saying, "I'll treat you to a room," and it is at Bellagio. The next day I went over to the company's headquarters and met with all of the key people on their staff. I was impressed by their concepts and organization, and flattered that they were listening closely to the many suggestions that I was making on poker graphical displays and other subjects related to a website. It became evident that I (or someone like me) was worth a lot more to a new company starting in the poker business than to an existing site. You can hardly say no to a group of people who appreciate your assistance, like your ideas, and are willing to reward you well for your help. So, even though I have not broken all of my ties to other poker sites, this is the site that I consider my home.

I returned to Toronto for another visit in July. At that time I interviewed the president of this company, both for my own knowledge and the writing of this column for you. Here are excerpts from that interview, where "BC" is my question, and "P" is his answer.

BC: What is your background?

P: I have extensive business experience in finance and accounting. I am a poker player, and was involved with the running of a poker club in Toronto for a little over a year back when there were lots of charity games. The Province of Ontario shut down these clubs several years ago.

BC: Why did you decide to put up a poker site, and when?

P: I was part of a management group involved in a business that was sold in 2003. We decided to reinvest the net proceeds instead of pocket it. In November of 2003, we made our decision to launch this Internet poker site project, because the timing for such a business appeared to be perfect. We knew that if it were successful, we would get a big return on our investment.

BC: How much money did it take, and how is it being spent?

P: Our venture requires about two million U.S dollars. Roughly half is for marketing. Meeting our software needs will take about a quarter of a million. More than half of that has been used to buy existing technology, and perhaps another $100,000 to modify and improve it.

BC: How large is your company?

P: We presently have 14 full-time employees. Of these, six are in the technical department.

BC: Please comment on the legality of maintaining a poker website.

P: We obtained legal assistance from some top-flight U.S. and Canadian attorneys in the gaming field before committing to this project. Although some states have tried to prevent Internet gambling through legislation, to the best of our knowledge, no player has ever been prosecuted for gambling online in either the United States or Canada. There is no specific legislation on Internet poker at the federal level in either country. Our gaming operation is based in Curacao, where Internet gambling is legal. Many other poker websites are also Caribbean-based. Such a legal company is allowed to outsource for help in areas such as marketing and technology services from another company based in North America without any problem for either organization.

BC: What are some of the major problems you face putting up a poker Internet site?

P: Internet poker is a very complex industry. Every new business requires a strong management team and sufficient capital. Good management equals effective execution. Fortunately, we do not have a problem in either department. But there are many other things you must do to be successful. You have to recognize that technical issues will come up on an ongoing basis, and you have to plan for them in advance. Security and reliability are extremely important. You must identify marketing tools that will be the most effective. Word of mouth plays a large role in effective marketing; happy customers will get you new ones.

BC: Where are you drawing your players from?

P: The demographics of the players who have already signed up with us is as follows: 65 percent American, 16 percent Canadian, 10 percent European, 2 percent Australian, and about 7 percent other.

BC: There are so many websites now. What are you doing to make your website distinctive?

P: This business is customer-driven. We are building an extensive player base before opening, and you have to make a good initial impression by having a variety of games and stakes available. Action breeds action. However, after you get customers, you also have to keep them. Insufficient attention has been paid by many other sites to retaining their player bases. We will be very generous with player benefits.

BC: What about your graphical display of playing poker?

P: We have lots of new ideas that the players will like. We have full control over the software used by the site, so we will be able to modify it quickly as we get player feedback.

I hope this column and interview will shed some light on what goes into starting up an online poker site.