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Poker-only Nevada Market 'Not a Profitable Enterprise': MGM CEO

The US State of Nevada made history in online poker by being the first state to formally establish a legal and regulated online poker market in the US.

Ultimate Gaming-owned service Ultimate Poker was the first operator to launch in the state and Caesars Interactive Entertainment followed some months later with the launch of their WSOP-branded service. A number of other companies have also highlighted their desire to launch their own services in Nevada sometime in the future.

MGM will not be one of them, however.

The Nevada-based gaming and resorts company, which owns a number of casinos in Nevada and the world, are highly involved in gaming in the state. However, in an interview with Vegas Inc. last week, MGM CEO Jim Murren said his company would not be launching an online poker service in Nevada as he believes it is not a financially viable market.

“We have not launched (in Nevada) because we have taken the view that poker-only here is not a profitable enterprise,” he said. “Our company has always preferred and have been staunch supporters of a federal effort on poker. But I think our optimism on that has waned dramatically.”

It is a major statement to make, but the relevant statistics show that Murren may not be too far off. According to PokerScout, Ultimate Poker currently has a seven-day player traffic average of 132 players, while its sole rival is not far behind with 126 – certainly not huge numbers.

Ultimate Gaming Chief Marketing and Operations Officer Joe Versaci conceded that the online poker-only market in Nevada was smaller than most people expected. However, he also maintained that it was also a crucial market in the context of online gaming in the US.

“I am confident that Nevada will eventually prove itself to be a valuable contributor to the American online gaming industry,” Versaci told PokerUpdate. “The need for states like Nevada and New Jersey to take a pioneering position in the rebirth of online gaming in America is a critical one. We will prove that there is a demand for online gaming and that our technology can properly enforce the regulations and protect the players.”

Versaci also reiterated his position that a viable online poker market exists in Nevada. He also believed that it was up to operators, regulators and the online poker community to ensure regulated online gaming continues to go from strength to strength in the US.

“Operators need to avoid creating a discount-driven race to the bottom,” he said. “Regulators and government officials must pursue growth opportunities and continue to work closely with operators to streamline development processes and player protections to make the user experience better, and the players must vote with their wallets.

“If we as poker players come together to embrace and support local poker, choosing regulated sites over the remaining unregulated ones and supporting the advantages of truly localized online poker, there is no reason why online sites can’t thrive.”

The sentiments from Versaci are quite sound and in many ways show that companies wishing to involve themselves in online poker in Nevada or other states like New Jersey and Delaware should look at the broader picture.

Murren’s point still retains some validity. Should Nevada’s online poker market increase from two companies, there is a chance that a small amount of players would be spread out. Such a scenario could adversely affect those companies’ bottom lines. Perhaps that is why New Jersey, with its larger population and proximity to the massive metropolis that is New York, is likely to be a more competitive market when their market is soon launched.

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