Poker Makes BARRON's Cover for 2/19/2005

[Dan Mezick]

Feature Article:

http://www.barrons.com

Full House
Suddenly, the whole world is playing online poker. A primer for investors

By ANDREW BARY

AMERICANS HAVE FALLEN in love with poker -- around the kitchen table, on television and now, inevitably, on the Internet. Fueled by the public's newfound fascination and the success of televised tournaments like the World Series of Poker, online poker has become one of the biggest, hottest, most lucrative games in the global gaming business.

[Stock Whiz]

Expect a 15-20% increase next week for WPTE. Nice article.

[krazyace5]

I hope this isn't a bad sign.

[FredJones888]

Its a sign that the top is near and maybe it already happened.

[Tzak]

I've always used him as a contrarian indicator.Tzak

[schroedy]

[ QUOTE ]
I've always used him as a contrarian indicator.Tzak

[/ QUOTE ]

Him being who?

[DVO]

"Its a sign that the top is near and maybe it already happened."

I don't think we're anywhere near the top in internet poker. There are only 1.4mm online players out of 100mm (and growing) poker players in the world.

And the anectodal eveidence is overwhelming...I was reading the Barron's article while getting my hair cut, and was bitching and moaning to my hair cutter that I'd yet to invest ...blah blah blah...and two people came up to me and talked about poker online, told a story about a friend doing it, asked questions, etc etc. Or ask the table next time you're playing at a B&M. Many players there are very interested also.

I routinely scoff at fads and have never invested in one...
but this is definitely worth least 5-10% of one's portfolio. The risks are there,( mainly political) but the business model of the online sites is staggering. Puts even E Bay to shame...

Unlike the profitless internet stocks of the 90's, this is for real. Growth will slow at some point, but not for a long time. And I predict poker will become an entrenched part of society at some point, including online poker.

In sum:

1) Stunning business model with huge margins( at least for first movers like Party)- marginal added players cost the site very little but add incrementally to cash flow;

2) Addictive product.

3) Lots of room for growth.

I just wish there was a pure play right now. I hope PP does go public fairly soon. Until then looks like Neteller and Sporting Bet are the best way. I would avoid WPT for the reasons others have noted.

My two cents.

[FredJones888]

its a frenzy. when your barber starts talking about poker, you know that the frenzy is getting intense. The more intense the frenzy, the closer we are to the top.

[DVO]

You may wind up being right, and clearly growth will slow a some point, but I think there is a long way to go before that happens. It's not just the barber talking about it, there are lots of poker players ( home and B & M) who haven't even gotten into it yet.

[imported_bingobazza]

[ QUOTE ]
its a frenzy. when your barber starts talking about poker, you know that the frenzy is getting intense. The more intense the frenzy, the closer we are to the top.

[/ QUOTE ]

I think you may be taking the theory of bubbles too far in this case...poker has enormous room to expand. How motivated are people in poorer countries likely to be to learn and play poker online?

[FredJones888]

Well, it seems most likely to me that there will be a decline in the growth rate even if the bubble doesn't pop all of a sudden. It can't keep growing like it is forever, that is bubble thinking.