In 2010, poker’s star was fading.
The Poker Boom’s peak had come and gone and with very few exceptions, online poker profits and markets were on the decline around the globe.
Then in April of 2011 things got even worse.
The Department of Justice’s crackdown on online poker sites, dubbed Black Friday, effectively stamped out online poker in the United States, a moment many felt marked the official end of the Golden Age of online poker.
Against this bleak backdrop, one online gaming company, 888 Holdings, managed to buck the industry trends. 888’s turnaround began in 2010, but it’s been the past couple of years, after an executive shakeup, that the company has become one of the major players in the industry, and a big part of that success was the coronation of CEO Brian Mattingley in March of 2012.
What 888 has accomplished during Mattingley’s three-year run as CEO is nothing short of remarkable, especially considering the environment and the conditions the industry found itself in.
In 2015, 888 is set to undergo another shakeup at the upper levels of executive management, with major changes slated to begin early next year. The biggest change will occur in May, when Brian Mattingley steps down as the chief executive officer of 888 Holding PLC and assumes the new role of executive chairman, replacing current non-executive chairman Richard Kilsby.
Following Mattingley’s somewhat lateral move to the executive chairman position, 888 will no longer operate with a CEO.
To fill this void, Chief Operating Officer Itai Frieberger will be promoted to the board in January, and along with current board member and 888 Chief Financial Officer Aviad Kobrine, will run the day-to-day operations of the company, while still working closely with Mattingley.
888 under Brian Mattingley
Prior to ascending to the role of chief executive of the company in March 2012, Mattingley served dual roles at 888. He served as senior independent non-executive director beginning in Aug. 30, 2005, as well as holding the title of deputy chairman beginning on March 9, 2006.
Prior to his time at 888, Mattingley served as chief executive at Gala Group, and before that at Ritz Bingo.
Precisely how much credit Mattingley should receive for 888’s rise is debatable, but as the CEO, the successes as well as the failures fall directly at his feet. Under his guidance, 888 has experienced record-setting growth on a number of fronts.
In the company’s most recent revenue reports, Q2 2014 Group revenue was $111 million (compared to Q2 2013: $97 million), an increase of 15 percent year on year, with H1 2014 revenue reaching $225 million (compared to H1 2013: $200 million), an increase of 13 percent year on year.
With rising revenue also came rising stock prices.
On June 30, 2010, 888 Holding stock price was £35.50. When Mattingley ascended to the role of CEO, the stock price was £56.25. On Dec. 31, 2013, 888 was trading at £172.50, and 888 is currently trading at around £130[i].
Prosperity would be a good way to define Mattingley’s tenure as the company’s chief executive.
Resurgent poker product
Under Mattingley, 888’s poker product grew by leaps and bounds. This growth was made all the more impressive considering the industry itself was faltering.
According to PokerScout.com data[ii], 888 has more than tripled its player base since July of 2010.
The rise of 888 Poker can be traced back to the implementation of a “recreational” strategy. This included an aggressive marketing campaign, strategic partnerships, and a renewed focus on its poker product.
The biggest change was the software upgrade unleashed in 2010 called “Poker 6.” Poker 6 brought 888’s online poker platform out of the dark ages and allowed it to compete with other providers on a technical level. 888’s software isn’t the fanciest or the most technological in the industry, but it is a stable, quality, product.
By itself Poker 6 wasn’t going to allow 888 to rise to prominence, but it laid the foundation that made its subsequent marketing efforts all the more effective. It was the combination of the two (competitive software and a solid marketing strategy) that led to 888’s rise — a lesson many other online poker operators would do well to learn.
In 2009, 888 entered into a partnership with Caesars and its World Series of Poker brand[iii] in the UK and subsequently launched a free-to-play site in the U.S. This partnership has been the genesis of virtually every marketing campaign 888 Poker has implemented since, including sponsoring the 2013 WSOP tournament series held around the globe.
Aligned with the World Series of Poker (one of, if not the strongest brands in poker) 888 tossed aside the current industry trends (bring in high-volume players) and targeted new, recreational players. In an interview with CalvinAyre.com’s Becky Liggerio[iv] at GIGSE 2014, Mattingley said the decision to switch to the “recreational model” came three years ago, “We wanted to appeal to the casual player. We wanted this to be an entertainment product … not something where the user experience was very poor.”
Mattingley then stated that the whole of the company’s product and its marketing campaigns is built around the recreational player. Mattingley’s and 888’s goal was to focus on the recreational model, appealing to casual players and doing everything they could to keep the sharks out of their waters.
Their decision has paid off in spades.
A big part of the recreational model can be seen in the way 888 changed the way it targeted players for sponsorship deals, almost exclusively targeting World Series of Poker final table participants, as these are the people with whom the largest number of recreational players are familiar with — the WSOP being the highest rated poker program on TV.
Over the past few years, the company has inked sponsorship deals (some short term, some long term) with November Niners, J.C. Tran, Jake Balsiger, Jay Farber, Russell Thomas, Sam Holden, Jesse Sylvia, and Michiel Brummelhuis.
Not all of its recreational player marketing has been poker-focused either, as the company also signed several high-profile, recognizable sports stars such as UFC fighter George St. Pierre, as well as a short-lived sponsorship deal with Luis Suarez, which came to an abrupt end after his biting incident during the 2014 World Cup[v].
Record-setting profits aside, Mattingley’s tenure is likely to best be remembered for the company’s return to the U.S. market.
888 has managed to become the only operator with its product in all three states with legal online gambling, Nevada, Delaware, and New Jersey. This strong footprint has opened the door for 888 to eventually become the only interstate online poker network when Delaware and Nevada pool their players.
In a telephone interview, Mattingly stated that he expects this to happen soon after Treasure Island (TI) and 888 launch Nevada online poker rooms, and along with Caesars’ WSOP.com online poker room, create the intrastate All American Poker Network (AAPN) in Nevada.
Mattingley expects the AAPN to be up and running in Q4 of 2014, or Q1 of 2015. Interstate poker between Delaware and Nevada should come soon after.
On the topic of online poker in the U.S., Mattingley said he is delighted at the success of the launch from a regulatory point of view, specifically citing the successes of age and identity verification, geolocation, and an adherence to the social compact between gaming providers and the community.
Mattingley does see several serious problems as well. He called the market disappointing and challenging, due to the payment processing difficulties, a lack of consumer awareness, the continued presence of unlicensed providers and regulatory burdens.
How impactful is the rejection rate of credit cards?
“If a player has their credit card rejected they probably won’t play again,” Mattingley stated, adding, “PayPal will help, and so will new credit card codes,” that are expected to be in place in early 2015.
Mattingley also spoke to the needed, but cumbersome, regulatory burdens that contribute to the presence and allure of unlicensed, illegal operators. At these sites “you don’t have to declare your Social Security Number, so players can remain relatively anonymous,” Mattingley said.
Still, despite the early hiccups and pitfalls, he sees a bright future for online poker in the U.S.
“Given time and a good experience players will know the sites are safe and secure,” Mattingley explained, “By this time next year, we will be in a much different [better] place.”
Part of that bright future Mattingley alludes to will be the expected arrival of PokerStars. A company he has very mixed feelings on.
“PokerStars will stimulate the market. They are a big, professional operation, and we welcome the competition,” Mattingley declared before adding an important caveat. “However, I do believe they got that leading edge operating in a market where everyone else was out,” and it should face a penalty.
“They used their U.S. money to develop their markets outside of America,” Mattingley continued, adding that this revenue from the largest market in the world (the U.S.) was a critical factor that allowed it to further pull away from other competitors in other markets around the globe, which he called an “unfair advantage.”
Putting this advantage in perspective, Mattingley detailed 888’s own experiences, saying that when 888 left the U.S. market following UIGEA passage its revenue was cut in half overnight.
“They shouldn’t be allowed to walk into new states,” alongside the companies that left the U.S. market following UIGEA passage, Mattingley said, adding that he believes there should be a period of exclusion for PokerStars: “One year, 18 months, or two years” would be fair.