Stars 'Monopoly'

I just wanted to address some of the 'monopoly' talk going on since the jaw dropping news came out about a potential Stars purchase of FTP. There's a lot of worry out there about what Stars would do with an outright monopoly on the online poker industry. After thinking about this for a while here's some of my thoughts.

Stars basically already had the market share post-FTP-shutdown that they will have with a FTP2 acquisition. So whatever you're worried about now, you should have already been worried about when FTP switched to server upgrade mode and went silent. I say this because, while some of the ROW players have of course gone to iPoker or Party, by scale of sites it stands to reason that the vast majority moved to Stars. I also don't recall another site seeing a massive boost in traffic when FTP closed their doors, which leads me to conclude that they were quietly merged into the Stars player pool where the effect would not be as pronounced. Based on this line of reasoning, it would seem to me that, while there might be a few people coming back from the networks, by and large FTP2's customers are going to be coming directly out of the Stars player pool.

There's also an issue with how you define monopoly. Stars does have the lions share of the market, but if you look at cash game traffic, they don't even make up 50%. The perception, I think, comes from the fact that if you take any of the other market slices and compare them with Stars one on one, it's David and Goliath every time. When we use the term industry standard, Stars is the industry, but what does that mean in terms of how far they can push the envelope?

I've put together a couple quick charts here. The first is based off of peak time cash players for all sites listed on Pokerscout. The second is if there were magically 15% more cash players out of nowhere on FTP2 to illustrate what I think would be the far upper bounds of Stars total market share with the new company. It's much more likely that the Stars slice from the first image decreases somewhat to make room for the FTP2 slice and the larger mini slices get a bit of a shave.

Stars 46% (Current traffic)

Stars 40% / FTP 12% (Max future traffic)

So I don't really think the comments about runaway rake increases, degradation to customer service and software innovation due to lack of competition really have any merit. If that's what they want to do, it's going to happen whether they own FTP2 or not. It's a massive shock to the online community right now because it is the most outlandish thing plausible, but that's really all it is. Nothing's changing that much in terms of industry share or control.

Contrary, assuming FTP2 retains somewhat of a resemblance to their former self, the players that liked playing there and plan on going back are going to be extremely happy, never mind recouping their bankrolls, considering that they will know their money is safe with a company that has proven it handles player funds appropriately and, by virtue of economies of scale, should be able to see a huge boost in the level of customer service.

The angle I can see here, besides having their legal problems reportedly cleared up with the DOJ, is that Stars/FTP can now work towards that monopoly from two separate approaches. They can run abc type of promotions, VIP structure and player experience on Stars to attract a certain type of player while simultaneously running xyz type of promotions, VIP/rakeback structure and player experience on FTP2 to attract a different type of player. It's much easier to make everyone happy when you have two products.

The only way that Stars/FTP2 is going to end up with a true monopoly, though, is by continuing down the path that got them where they are: keeping customers happy.