Editor’s Note: You Oughta Know is a regular feature highlighting industry stories that we feel are underreported–or simply put–more people should know about. The first in the series is about PokerStrategy.com and its founder, Dominik Kofert.
PokerStars is the world’s most popular destination for people looking to play online poker. No surprise there. But you may be surprised to learn that their nearest competitor–in terms of number of active real money players–isn’t another online poker site like PartyPoker. Outnumbering all other sites with a comfortable margin is a company led by a 30-year-old German Mathematics & Philosophy student and former Starcraft player who opted to forsake a career in Business Management in order to go teach all of Europe to play poker.
His name is Dominik Kofert, and his affiliate company, PokerStrategy.com, is the world’s largest localized poker community and depository of poker strategy content. In fact, it’s the most popular online poker destination in the world–and by a large margin. PokerStrategy.com clocks in with an Alexa ranking of around 1,250. The closest ranking content site is the 2+2 Forum, with a ranking of around 3,600. It’s not even close.
PokerStrategy.com is also one of the most successful companies in the history of online poker; and that’s without ever having made single cent from the biggest market of all – the U.S. How in the world did they do that?
In short, PokerStrategy.com is a company that recruits new online poker players by offering to teach them how to play and, consequently, how to improve their game. Once the players go on to play real money games on any of PokerStrategy.com’s many partner sites, PokerStrategy.com earns a fixed sum or a cut of rake revenues generated by those players.
Kofert oversees his company from a glass-façaded high-rise headquarter in the tiny Mediterranean peninsula of Gibraltar. Due to an attractive gaming regulation regime and liberal tax laws, Gibraltar is home to many of Europe’s biggest gaming companies. The company employs more than 250 people and that number is steadily growing. Over the past month they’ve had 21 job openings. A major partner of most of Europe’s biggest card rooms, Kofert’s company does business in all regulated markets, and his frequently expressed opinions on the present and future state of the industry do not fall on deaf ears. To date, more than 5 million people have signed-up with PokerStrategy.com. That’s a small country here in Europe.
Simply put – the man’s got some clout. But although Kofert sports a commanding presence, and definitely does not back down from a healthy discussion, you never get the feeling that this is a man suffering from RayBitar-ism.
Trial without error
A true testament to Kofert’s success, as well as PokerStrategy.com’s, is how the company has managed to escape from the fall of Full Tilt Poker relatively unscathed; a feat many other major affiliate outlets have not been able to pull off. So, even though a lot of European customers were playing at Full Tilt Poker, most of them have kept playing poker and keep playing through PokerStrategy.com.
“Black Friday was ironically a very good ‘proof of concept’ for us,” says Kofert. “We always argued that ‘not being an operator’ was a strength and not a weakness of our business model. After all, if you have a loyal customer base to which you provide a great service, chances are that they will stay with you regardless of which particular poker room they prefer.”
“So, even though a lot of our European customers were playing at Full Tilt Poker, most of them have kept playing poker and keep playing through PokerStrategy.com,” shares Kofert. “As for U.S. players, the UIGEA was already in place when we launched PokerStrategy.com and expanded beyond the German speaking market in 2007. So we’ve never served any U.S. players. It seemed like an unnecessary risk to take with so much untapped potential in Europe.”
To say that Kofert had the blueprint for the world’s largest poker school all drawn up when he initially started up as a tutor-based affiliate would be stretching the truth though. Like many other industry success stories, Kofert’s story is one of great ability to roll with the waves, to get a few key decisions right and to capitalize on a good streak.
“There was never this ‘key moment,’” admits Kofert. “The reason why I started teaching people how to play poker was that I always enjoyed teaching and was successful at poker. It was never intended to be a business, but rather a side activity while I was still studying. Of course, if I could make a few bucks with some affiliate banners, that would be nice as well, but it was never the goal of it.”
Once things did take off, however, Kofert and his partners devised an affiliate model based on teaching through localized online communities that has proven unbelievably successful.
At the heart of this model lies the Free50 acquisition scheme. Players signing up via PokerStrategy.com can receive a $50 stake if they successfully pass tests to make sure they understand important fundamentals of the game, such as bankroll management, hand strength and position play. So not only are players funded going in to whatever PokerStrategy.com partner site they have chosen to play on, they are also well-equipped with enough knowledge to avoid being run over by better players and confusing game user interfaces during the critical first hours of play.
Add to that tons of strategy articles in multiple languages, lots of teaching videos and opportunities to join coaching sessions, and it is no wonder Kofert and his team keep players more engaged and in-action than most sites. During the past 12 months alone, the Pokerstrategy.com forums recorded more than 8 million posts. In terms of page views, the company has broken the billion-a-year barrier.
PokerStrategy.com is not without its critics though. It is accused of being a factory that spews out rat-holing, short-stacking nit players that ruin the experience for everyone else. And like other affiliate-based online poker portals, some sites feel that PokerStrategy.com herds players around to wherever they have the most to gain from, thus leaving sites to fight a spiraling price war. Criticism that we plan to get back to in a later article.
Coming to America
As for PokerStrategy.com’s hitherto anonymity in the U.S., Kofert hopes to change that.
“We are in discussions with several parties and evaluating different options.”
He is however understandably unwilling to speculate on the outcome of the current legislative tug-of-war between various state and federal organizations, bills and stakeholders.
“I have given up on guessing,” he says. “Our strategy is to be ready either way.”
What role PokerStrategy.com and Kofert may come to play in a market that, in one sense, is the world’s most experienced, but in another, has yet to deal its first-ever legit real money hand is hard to guess.
When asked about the opportunity to launch their “own” poker site, Kofert states: “I don’t think it would add value to our business. Our success is based on teaching poker and building up and running communities of poker players. If we had our own operator, we would just add it to the list of operators that we already offer on the site.
When the smoke eventually clears and U.S. players can play their favorite game again – look out for Kofert and his team. They’ve already taken the European poker industry to school. And I doubt the U.S. industry has learned its final lesson.