Ultimate Poker’s run in the U.S. online gaming industry was historic, filled with ups and downs, but in the end, short-lived.

Ultimate Poker was innovative and pushed the envelope in several areas from promotions, to web videos, to customer support. But for all of the little things the company got right, they got a lot of the big things wrong.

Ultimate Poker should be applauded for their efforts and their willingness to think big. Ultimate Poker should also be used as a cautionary tale, a warning to current and future operators.

Here are three lessons future operators can learn from Ultimate Poker’s missteps.

Don’t rush

Ultimate Poker definitely got a first mover advantage in Nevada, but let’s not lose sight of the fact their advantage wasn’t a couple weeks, or even a month; Ultimate Poker had a monopoly on online poker in Nevada for six months, and that still wasn’t enough to keep their head above water.

By the time any competitors launched Ultimate Poker could have, and should have, already slammed the door – of course this would have required a kickass online poker room, something Ultimate Poker simply didn’t possess.

Even with that enormous six-month advantage, at the end of the day people were just waiting for another operator to launch so they could bail on Ultimate Poker and the site’s underwhelming software. Ultimate was merely a placeholder in many player’s eyes, evidenced by WSOP.com overtaking them within a couple of weeks of their launch.

Ultimate Poker’s product was bad enough that a lot of players simply abstained from playing online poker until WSOP.com came along. We know this because WSOP.com not only poached a significant portion of Ultimate Poker’s players, but it became apparent soon after their launch (when the total market grew far larger than when Ultimate Poker was the lone operator) that many online poker players were simply waiting for a better product, and wouldn’t even play at Ultimate when it was the only game in town.

Because of their inferior product, Ultimate Poker was unable to build much in the way of brand loyalty despite a six month head start, and even though they maintained a modest player base in Nevada after the launch of WSOP.com, it was mainly low stakes players, and likely consisted of a lot of crossover players with WSOP.com.

Lesson: Being first is good, but not if the subsequent products that launch are likely to be far superior to your own.  

Be prepared for the long haul

The fact that Ultimate Poker closed up shop in less than two years had me thinking about another poorly named enterprise that struggled right out of the gate and folded early on, the Epic Poker League.

When Epic Poker launched I remember one of the main criticisms was that they were burning through money far too quick, and couldn’t keep up that type of spending pace. And I remember EPL’s Annie Duke appearing and refuting these claims, saying how they had capital and were in it for the long haul – which proved not to be the case.

UP was certainly not the EPL, but with Ultimate Poker closing after just 19 months it makes me wonder if in addition to not researching their NAME, Ultimate Poker failed to research the potential size of the Nevada market and the revenue potential?

I have a hard time understanding how a company the size of Station Casinos, which possesses the type of money the Fertittas have, doesn’t plan for a few years of being in the red – especially considering the amount of time, energy, and money they pumped into the UFC before it turned into a cash cow.

Any reasonable assessment of the potential Nevada market would have indicated it might be years before profits were realized (be it through interstate agreements or some other method). With that in mind it would seem Ultimate gambled that New Jersey would be a larger market and that they would have a bigger piece of the NJ pie, or perhaps they felt California would be well on its way to legalized online poker.

This is just one gamble Ultimate took (proprietary software and a rushed launch being others) that didn’t pay off.

Lesson: If you plan on launching an online gaming site in a small regulated market you better be prepared for a few tough years and don’t assume you know how the industry will progress in other locales.

Lipstick on a pig

As I mentioned in the opening, getting the little things right is great, but it’s not going to cover-up the fact that you have an inferior product – As Barack Obama quipped in 2008, “you can put lipstick on a pig, but it’s still a pig.”

Ultimate Poker’s issues began when they settled on using the name Ultimate which would be along the same lines as an energy company choosing Enron, or an investment firm throwing Ponzi in their title.

Beyond that, Ultimate Poker was never able to offer a decent product. Their online poker software wasn’t unplayable, but it was deficient in a number of areas, and they never seemed to have the proper sense of urgency that would convey to their players that they were doing everything they could to try and make the needed improvements.

Updates were few and far between, and as time wore on it became clear that player concerns were being put at the back of the line, while focus shifted to web videos and other bells and whistles – AKA a lot of lipstick.

Lesson: If your product is online poker make sure you have a solid online poker site before you start spending money on marketing and promotions.

Steve Ruddock

About

Steve is a seasoned veteran of the online gambling industry, having written about it from every possible angle in his many years as a freelance gaming writer. Based in Massachusetts, Steve especially focuses on regulatory and legislative news coverage pertaining to the U.S. market.