Affiliate website Compatible Poker – which I always enjoy reading – ran a news piece that caught my eye:
3:41am – The US DOJ has confiscated $24 million from Bodog according to a Forbes article. Earlier this week I heard of casino affiliates losing many thousands do to a payment processor/chargeback issues but I’m not sure if it’s related to this or not. The article on Forbes says it might rattle the confidence of online gamblers. $24 million is pocket change to Bodog and any prominent poker or casino site. Not only that but Morris Mohawk is claiming there are many false and misleading statements in the Forbes article. These sites are generating hundreds of millions each month. Some of Bodog’s money was seized from a Nevada State Bank….need I say more. I really can’t see players not getting paid or having money seized especially after what happened with BOS.
Of particular interest was this statement:
$24 million is pocket change to Bodog and any prominent poker or casino site.
I think Compatible’s estimates are a tad on the optimistic side. Just going by public reporting companies, Party was close to $3.5 million a day in revenue (not profit) per day before pulling out of the US. That was with poker, casino, sports betting, bingo, and gammon combined. Also keeping in mind that Party has the world’s largest online casino operations and Bodog ranks 13th on Poker Site Scout and I think $24 million is more than a drop in the bucket for Bodog. It may not be a crippling amount but losing $24 million would have to hurt any online gaming operator. My guesstimate based on where Bodog ranks on PSS and what public reporting sites claim in their financials, Bodog only does about $60 million a year (gross) revenue on poker. The sports book is harder to estimate (totally pulled out of my ass) but I’ll guesstimate a number of $40 million or so. So, close to 25% of your gross revenue is not chump change.
These sites are generating hundreds of millions each month.
While overall the industry may generate hundreds of millions each month, the way in which this was presented made it difficult to tell if the author meant to imply that most rooms are generating that kind of money. There are very few sites that generate even $100 million a month. PokerStars might be the only poker room that is even close to that number. Outside of poker only sports books earn that kind of money and even then a lot of the money in the sports betting industry is centralized at a few big sites like Betfair and BetCris which offline bookies use to lay off bets.
Like I said, technically, the statement is correct but I just wanted to make the point that most of the money in the industry is very heavily weighted towards the top few players in the market. Online gaming sites as an industry are making hundreds of millions per month but the vast majority of sites make nowhere near the big money.
Okay, with that out of my system, Compatible was right in pointing out that Morris Mohawk is calling BS on the Forbes article I spoke about yesterday. Below is Morris Mohawk’s statement on the topic.
An article was recently released on Forbes.com that creates several misimpressions that the Morris Mohawk Gaming Group feels compelled to clarify for our customers.
As most of our customers already know, all operators outsource payment processing functions to third parties and these payment processors are subject to regulatory constraints wherever they operate, and, occasionally in the US, are subject to legal action because of the uncertain legal environment there.
However, the seizure of funds from these US payment processors was mischaracterized in this article, which refers to two specific legal cases against US processors. Rightly or wrongly, the article does not make a clear distinction between these cases, which, as a result, paints a misleading picture.
The facts are these: the first of these cases – relating to a seizure of funds from a processor known as JBL Services – happened some time ago and has absolutely nothing to do with the current payment processing challenges being experienced in the US. The constraints being experienced by payment processors in the US are universal in that region and not specific to any particular processor or site. Also, note that not one single player failed to get paid when this processor was disrupted.
The second case refers to a payment processor known as Zippayments.com and seizure of funds from this processor’s bank accounts in Nevada. The article falsely implies – but notably does not go so far as to state – that $9.9M seized from Zippayment’s Nevada bank accounts were funds on account for “Bodog”. This is simply false.
Processing partners with whom the Morris Mohawk Gaming Group does business are sophisticated organizations that are perfectly clear as to the actual facts of these cases and their contexts. They are unfazed by such media hype and Morris Mohawk wishes to ensure that its customers are similarly informed. Customer deposits are safe and every player has and will always be paid.
Morris Mohawk Gaming Group