According to a new report series by Academicon and PokerScout, the potential size of a regulated U.S. online poker market is $2.2 billion in the first year of operation and up to $3.3 billion by year 10. Before the federal indictment of unregulated poker in April 2011, the U.S. was by far the largest market, accounting for 27 percent of worldwide revenue.
The study is based on an analysis of 4.6 million real money online poker players in 2009 and 2010, near the peak of unregulated poker in the U.S. The authors found that 1.4 million online poker players in the U.S. generated an average of $686 per year in revenue for poker operators, creating a $981 million market.
“Without a federally regulated online poker market, which appears unlikely, state‐by‐state markets will stay well below their potential,” said Dr. Ingo Fiedler, an author of the study in a prepared statement. “While a large state like California has a large enough player base to support an in‐state market and even reach up to 80 percent of its market potential, smaller states like Delaware will not be able to maintain a market on their own.”
The study reveals that 88 percent of all revenue comes from just 10 percent of the players. Still, "the single most important driver of the size of state‐by‐state markets is the size of the respective player pool," said Professor Kahlil Philander, the other author of the report series.
For example, California is the single largest market in the U.S. and can sustain a flourishing market on its own. If California legalizes and regulates online poker, the market could generate revenue between $217 million and $263 million in a 10 year time period, according to the study. It found that prior to 2011, 178,300 online poker players in California generated an average of $867 per year in revenue for the poker operators, creating a $155 million market. California players accounted for 16 percent of U.S. revenue and 4 percent of worldwide revenue in online poker.
“Under regulation, online poker is expected to grow well beyond its previous peak," Philander added.
Academicon is a research institution and consultancy, providing advice for regulators with a focus on online gambling. PokerScout is a market research company which has been publishing data on the online poker industry since 2006.