4Poker Implosion

A month or so ago I caught wind of trouble at 4Poker – an online poker site staffed by some of my favourite ex-PokerStars colleagues. Quite a few of them had been laid off and, I believe, are waiting for a chunk of back pay.

The company haven’t wound things up yet, but this does not have the hallmarks of a market share growth spurt. If I were to dip an arm into my bag of wild guesses, I’d say they’ll probably be out of business by the end of the year. So let’s call this a pre-autopsy. 

I have mixed feelings about the situation. I think predominantly it’s sadness, as I genuinely adore many of the people that were working there. I also like to see a start-up underdog sticking it to the behemoths. But when I put that melancholy under my emotional microscope, there are dark wispy swirls of grim told-you-so satisfaction.  

I wrote about them two years ago when they were still operating under one of several rubbish working titles “Uptick Entertainment”. I offered a few tidbits of advice and wished them good luck, because I knew they were taking on a tough challenge.

24 months later, and I can’t help feeling the only thing they got right was the name. During the poker gold rush, pretty much all the cool, clever poker URLs were taken, so coming up with something pithy, relevant and memorable can’t have been easy. 

The moniker 4Poker is short and sweet, and is a perfect fit for what they were attempting to do, i.e. be an authentic poker site being run for and by serious poker people. Unfortunately, that premise has already flopped several times before. Most recently, Run it Once failed without making much of a dent.

You could argue that pretty much every poker site was launched by well-meaning poker players with the intention of servicing other poker players. The exception being GGPoker, which is probably why they’ve done well. They actively scare off big players with high rake and an inexplicable rewards program.

One of my bits of unsolicited advice to 4Poker was to innovate. It would be close to insanity to spend millions on developing a basic product which has existed largely unchanged since 1998. And yet, that’s exactly what they have done. There is no unique selling point.

It’s a pretty good stab at a poker site, in fairness, but then it bloody well should be. People have been successfully coding No Limit Hold’em for 25 years.

Let’s be generous, and acknowledge them for delivering a minimally acceptable version of a tried and trusted favourite. From there, they would need to have some serious marketing magic tricks up their sleeve to make inroads into a mature and competitive market. 

What did they have? Pros and freerolls.

In the history of online poker, more money has been wasted on signing poker pros than on anything else. Sure, live events and free merch are reliable money pits, but nothing incinerates a marketing budget for minimal return quite like hiring ‘famous’ poker players to front your brand. 

With the exception of a few old school TV favourites (Negreanu, Brunson [not Todd], Hellmuth), no-one cares about poker pros. I’d go a step further and say they’re actually a deterrent. 

The offer of “come and play the pros” is like being invited to go a few rounds with the world’s tenth best heavyweight boxer. You’ve never heard of him, so there’s no celebrity upside, but you know he’s still capable of beating you to a saggy pulp. I’ll give it a miss, cheers.

As for freerolls, I’m going to let you into a surprising secret. This is the sort of information I should be holding back for £2K-a-day consultant work, but I’m feeling generous: They don’t work. 

Poker players thrive on finding small edges and optimising their expected value. Thus the best strategy for freerolls (or a tournament with overlay), is to tell absolutely nobody about it. The more people that know the whereabouts of the golden goose, the less shiny 24K eggs there are to go around. You’re literally bribing your players to keep their mouth shut about your cardroom.

Two years ago, I talked about how 4Poker were keen to replicate, nay resurrect, the PokerStars VIP Club. Basically, that’s a confusing method of giving 60-80% cash back to very high volume players. During the long development process, I know they were absolutely dead set on that element.

This area is a bit technical and boring, so I’ll just put it straight into terms of a simple eco-system. They wanted to stock their beautiful new lake with great white sharks, but hadn’t cracked the problem of keeping them fed. Great whites don’t last long when they’re hungry, and do really poorly in fresh water. It’s the perfect marine biology recipe for a lot of floaty carcasses.

What makes this outcome particularly disappointing, is that they were well on top of the operational problems of a poker site.  If 4Poker had ever scaled to size then it would have run like clockwork, with stable servers, perfect payments, safe games and super support.

Unfortunately, that’s because they had all those people in place long before they were really needed, and they were paid well (until recently) for the ride. The few million quid they spent on personnel would probably be really handy now they have a handful of customers.

I don’t want this summary to reflect poorly on the folks that are now looking for work, because they’re a genuinely talented bunch who would have flagged the strategic shortcomings to leadership. The buck stops at the ownership, who persisted with an old product and dated ideas.

One thing the gambling industry definitely does not need, is more of the same. Hopefully the next big poker hope will have something new to offer.