Black Friday & Poker Player Sponsorships

When the U.S. Department of Justice charged the executives of Full Tilt Poker (FTP) and PokerStars (PS) with bank fraud, money laundering and operating illegal gambling businesses on April 15, hundreds of professional poker players began wondering how this action will affect their sponsorship agreements with these companies.

At this time, neither company knows exactly how it will deal with the agreements it’s made with the sponsored professionals, but I think it’s safe to say there will be significant changes to the sponsorship landscape.

Since FTP and PS have blocked U.S. customers, they will no longer spend marketing dollars in the U.S. This will basically eliminate the majority of poker programming on television (I’ve heard the ONYX Cup is on hold), poker advertising (the massive PS/ ESPN deal) and several live tournaments that depend on online poker qualifiers to stack the fields.

Both PS and FTP utilize player sponsorships as the foundation of their marketing strategies and have benefited greatly from these affiliations. I fully expect FTP and PS to continue to operate (and thrive) internationally and because of that there will always be player deals with both companies.

How much an existing sponsorship deal between a professional poker player and FTP or PS will be affected depends on several factors, but here are my thoughts on how this will unfold:

• Both FTP and PS revenue will be down 30-45%, and I expect across the board cuts to be made, including player sponsorship deals-

• Non-U.S. players in regulated and emerging poker markets are least likely to be affected-

• U.S. based “A-List” poker players are likely to keep their deals, provided they are willing to participate in more International responsibilities-

• U.S. based “B-List” poker players are the most likely to have their deals terminated or cut back-

• U.S. players without significant International appeal will be the most likely to be affected-

• U.S. sponsorship deals primarily based on “rake-back and hourly” are now pointless-

So how long do the new market conditions last? It depends on regulation, but two to five years is a good guess. As with any significant market change, there will be winners-those who recognize and adapt to the new reality, and losers- those who get left behind.

All sponsored poker pro’s should be prepared for change. To discuss how the recent developments affect you or your poker related business specifically, contact Poker Royalty.