Stagnating Poker Revenues Concealed By Growing Gaming, Sports Betting Businesses

Published on March 8th, 2019 12:51 am EST

Earlier this week, The Stars Group (parent company of Pokerstars) reported their earnings for Q4/2018.

The results were better than expected and the stock of the company jumped after the report was released. This was mainly due to the company's financial guidance for 2019, which was higher than what was originally forecast.

The better-than-expected results helped to gloss over a pretty glaring number - Pokerstars' poker revenues were down 10.0% in Q4/2018 from the same quarter the year before.

For a company that is the 800 pound gorilla of the online poker industry, this is a pretty startling result. Thankfully for Pokerstars, revenues from their gaming and sports betting operations were both up significantly, which more than offset the decline in poker revenues.

There is no hiding the fact, however, that Pokerstars' core business is stagnating and even dropping.

The company has been trying its best to maintain its poker revenues, as they continue to implement changes that increase rake on most players. These changes only seemed to stop the bleeding somewhat, as poker revenues were still down year-over-year.

The poker industry in general is struggling right now, thanks to a mixture of different reasons ranging from regulatory changes to market saturation to increased competition. Even Pokerstars is feeling the bite of competition, as partypoker has significantly ramped up its marketing efforts over the past year.

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Pokerstars saw the writing on the wall a few years ago, which is why they started expanding into the gaming and sports betting sectors.

After years of frantic growth, the online poker industry has finally matured and growth has slowed. How will the industry react?