Interview with Poker Economist Ingo Fiedler
We speak to one of the authors of an exclusive report on the relationship between online and offline gambling revenues, and the state of the US poker market, which we released last week, Ingo Fiedler of the University of Hamburg.
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| Ingo Fiedler |
Last week, we exclusively revealed the findings of a paper which proved that online poker does not negatively impact offline gambling profits; in fact, it increased them. The same paper revealed that before Black Friday, the US poker market was worth $1.2 billion and that Americans paid $981 million in rake in 2010.
Today, we speak to Ingo Fiedler from the University of Hamburg, one of the two authors of the paper, to get some more background on his findings:
PokerStrategy.com: What prompted you to work in this area?
Ingo Fiedler: I am a gambling researcher and as a poker player, most of my research, like my PhD thesis, focuses on online poker. Back in 2006, when the UIGEA came in, everyone was talking about whether online poker affected offline gambling revenues. All the casinos thought it was damaging to them, but I wondered if online poker actually increased the player pools and introduced more people to offline gaming, so I thought it would be interesting to research.
PokerStrategy.com: How did you collate the data?
Ingo Fiedler: The data we used comes from the Online Poker Database of the University of Hamburg (OPD-UHH). This is a huge database we used for a couple of studies on online poker. To gather the data, we collaborated with the market spectator PokerScout. We developed software which automatically records the player information in the lobbies of poker operators like PokerStars, Full Tilt Poker (back then), IPN (BOSS Media), Everest Poker, and Cake Poker.
For six months, the software logged the locations of all players, their date and time played, and the rake paid to the operator. Altogether, that amounted to 4.6 million different online poker “identities” worldwide which we broke down by countries and regions. This allowed us to calculate the market sizes of different countries.
"Regulating can also harm online poker when it comes to taxing and fencing"
PokerStrategy.com: The figure of $2,700 additional online poker revenue for every $1 million offline casino revenue seems small, is it in context?
Ingo Fiedler: Compare the finding to the scenario of the two products being substitutes. In that scenario $1 can either go to offline gambling OR online poker. This is what most people would have thought beforehand. In reality, however, the total money spent on offline gambling does not decrease when people play online poker – it even increases. It may increase only slightly, but the fact that it does not decrease is the main finding.
PokerStrategy.com: Have you got any evidence the gross complement is prevalent outside of North America?
Ingo Fiedler: We also looked at data in Italy and found the same results. In Germany we studied the effect between online poker and slot machines. It was positive there, too.
"I am certain that this will be new information the US government"
PokerStrategy.com: Will your study be new information to the US government?
Ingo Fiedler: From my current experience with the legislators, I am certain that this will be new information to the US government. The information from the Online Poker Database of the University of Hamburg is the most accurate and up to date information around. And we are happy to share that data with everyone who is interested.
PokerStrategy.com: Is this good news for the prospect of state owned online poker in the US?
Ingo Fiedler: Our results show that offline gambling operators should not be concerned about online poker but instead welcome it. Hence, the probability of online poker becoming legal in the US should increase. However, regulating can also harm online poker when it comes to taxing and fencing.
A good example on the effect of such regulations is the state owned operator in Quebec, International.ca; they tax it, there is no rakeback, and they do not share their player pool with the rest of the IPN network - nobody is playing on it.
Read the whole study Discuss the study in our community forums
by Barry Carter
