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Thread: Ultimate Poker circling the drain, throwing hail Marys

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    Owner Dan Druff's Avatar
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    Ultimate Poker circling the drain, throwing hail Marys

    They are trying to hang around until more markets get legalized, but it's just not going well.

    Most original employees (including high-level ones) have quit or been fired. This includes Terrence Chan, who describes himself on Twitter as "funemployed" now.

    Reportedly most of this has to do with Ultimate Gaming CEO Tom Breitling, who is said to be difficult to work with, and not knowledgeable enough about the online poker market to be in the position he's in.

    They also committed a big blunder initially by purchasing CyberArts for $25 million (in 2011) -- a software company which then designed their fail proprietary software.

    Their NJ site is gone, and the NV site has been a failure. In late October they tried to drum up interest by charging no rake at 2-5 NL, but got only a tepid response.

    Now they are running a $10,000 bad beat jackpot promo at 0.10/0.25 NL and higher, for quad tens or better beaten.

    Again, no improvement.

    I already took the last of my money off that failsite.

    At 5:15pm, they have zero LHE games running, and 67 players in NLHE. However, there is only a single NLHE table running above $0.25/$0.50. There are also 14 players at microstakes Omaha. Basically it's become a LOL microstakes site, and still rarely has 100 active players at once.

    Here are some LOL videos of CEO Tom Breitling discussing "lessons learned" in May, 2014:

    Here he is blaming regulation for his site's failure:



    Here he is blaming the illegal online sites (like Bovada and Merge) for his site's failure:


    Here he is saying that they will grow because customers are still becoming aware of them (LOL):


    Oh, and here he is whining that the market is smaller than expected, again an excuse for UP's failure:




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    Platinum herbertstemple's Avatar
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    Using the name Ultimate Poker is a horrible idea. They want the tie in with Ultimate Fighting, but the word ultimate is a pariah in the ipoker world thanks to UB.

    Like the saying goes dude, "The Pioneers Take the Arrows".

    Stop whining and fix your product.

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    Owner Dan Druff's Avatar
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    I received an e-mail from an anonymous party who wanted to correct me.

    That e-mail said that Tobin Prior (CEO) was the problem manager, and not Tom Breitling, who is the Chairman.

    However, the software situation IS Breitling's fault (my opinion, not from the e-mail), as he got the ball rolling by purchasing CyberArts for $25m, and then let the ship sink from there.

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    Diamond chinamaniac's Avatar
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    this guy has no clue what he is talking about, he says the "illegal" operators operate in nearly 100 % of states which icouldnt be further from the truth.

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    Plutonium Sanlmar's Avatar
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    Ultimate Gaming, the nation’s first legal and regulated real money online wagering website, said Friday it was ending its Nevada-based operation, citing a lack of profitability from the 19-month-old business.

    In a statement, Ultimate Gaming Chairman Tom Breitling said online poker revenue in Nevada fell far short of once-lofty projections. Breitling said the current state-by-state approach to legalizing online gaming legalization “has created an extremely cost-prohibitive and challenging operating environment.”

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    Owner Dan Druff's Avatar
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    Yup.

    Looks like I got this one right. Four days after I made a major radio topic out of Ultimate Poker being in a near-death state, it closed.

    http://www.reviewjournal.com/busines...fter-19-months

    More on this later.

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    Former On-Air Talent Daredevil's Avatar
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    Too many butt-pirates causing friction obv.

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    Platinum herbertstemple's Avatar
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    Quote Originally Posted by Daredevil View Post
    Too many butt-pirates causing friction obv.
    There is just too much penetration going on.

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    Serial Blogger BeerAndPoker's Avatar
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    Know when to hold 'em know when to fold 'em.



    Or better yet never start a site without hiring competent people.

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    Owner Dan Druff's Avatar
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    Another article about the situation:

    http://www.vegasinc.com/business/gam...e-gaming-shut/

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    Owner Dan Druff's Avatar
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    I just cashed in my VIP points for the only item I was eligible which wasn't UP clothing (lol)...

    UP Branded Headphones.



    I got two pairs.

    What a waste. That was supposed to be my rakeback.

  12. #12
    Quote Originally Posted by Dan Druff View Post
    Yup.

    Looks like I got this one right. Four days after I made a major radio topic out of Ultimate Poker being in a near-death state, it closed.

    http://www.reviewjournal.com/busines...fter-19-months

    More on this later.
    The site was doomed pretty much from square 1.
    Last edited by JoeSeboksMicropenis; 11-14-2014 at 05:30 PM.
    Joe Sebok has a Micropenis.

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    Owner Dan Druff's Avatar
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    A wise man on 2+2 named "Union Of the Snake" posted the following.

    It's a new account created today. There's some speculation as to his identity, but we won't talk about that here.

    A lot of you aren't aware of the full truth of the situation.

    Ultimate Poker was an ill-fated, mismanaged mess from the start.

    While indeed the weaker than expected online gambling markets didn't help matters, most of Ultimate Poker's failure was their own doing. Even if you want to claim that Nevada's population can only support one poker site, that's certainly not true of the much larger New Jersey market. Despite that, UP was never able to grab more than 3% of the market share over there.

    The failure of Ultimate Poker is a classic tale of clueless and arrogant upper management steering a sinking ship into a whirpool, and slapping the hands away of anyone below them attempting to correct the course.

    Their first blunder was their insistence upon proprietary software. They paid a staggering $25 million to acquire software outfit CyberArts, for the purpose of developing the UP software. Proprietary software in an established industry is always a risk. While it affords you the chance to be innovative and exceed the offerings of the current marketplace, the new UP software did neither. CyberArts simply wasn't up to the task. They developed a product which was in fact inferior in several ways to the Planet Poker software in 1999.

    The second major blunder was their obsession regarding being first to market. First to market can indeed be a huge advantage in industries where brand loyalty is common, and online poker is definitely one of those industries. However, such loyalty can only be established if your customers are happy with your product. If your product is severely flawed, being first to market will backfire, as your customer base will be chomping at the bit to immediately jump to the competition as soon as it exists. That's what occurred at UP. They released a highly flawed product which was also light on features, and somehow expected brand loyalty despite that. It is unclear if they simply did a poor job testing, or if they were aware of the numerous issues and decided an early launch was still the correct way to go. From what I have heard, it was the latter, but I believe they also were unaware of just how bad the software was. In any case, their product was very poorly received, and it was an inauspicious start for Ultimate Gaming.

    Third, they did a poor job correcting the issues brought to them by their player base. While it is true that all software changes had to be approved by the gaming control boards, that's not the reason they failed to fix the software. They just weren't giving priority to the matter, and were closing their ears to the loud player feedback received both here and elsewhere. If you recall, when former UP Pro William Reynolds mocked them on his Twitter, he mentioned the fact that he sent them a long list of things to improve, and how they implemented none of them. Reynolds felt that they were more obsessed with silly social media campaigns than putting out a good product, which sadly was mostly true. Indeed, most of their software updates did not contain fixes for the software's bugs and annoyances (including minor, easy-to-fix ones), and the player pool got frustrated with it.

    Fourth, their marketing was beyond poor. They refused to accept that they were slipping into the abyss and take drastic action. Their entire business plan was to simply stay the course and hope things improve on their own. No groundbreaking promotions. No hiring of props. No insane rakeback deals or rewards for game-starters. Finally, in their last few weeks of existence, they finally got a small clue and tried some 11th hour promotions to get some traffic. This included a rakefree 2-5NL game and a $10,000 bad beat jackpot at 0.25/0.50NL or higher. It was too little, too late. Their fate was sealed.

    That brings me to my final point. Ultimate Poker had a lot of talented people on board. Many of these people were known to be intelligent, in touch with the wants and needs of the poker community, and some had even worked successfully at other online poker companies in the past. They seemed to have an A Team of employees, so what happened? How did this immense fail occur?

    Upper management handcuffed them. This mostly was the doing of CEO Tobin Prior, but Chairman Tom Breitling had a hand in this as well, as did a few others. Basically, the poker people were not allowed to be poker people. Their input was ignored. Their suggestions were overruled. Their innovative solutions to fix the collapsing company were laughed off. The arrogant upper management at UP felt that they knew best, and that their poker community underlings had no clue how a successful poker site should work. That's tragically hilarious if you think about it. UP failed mostly because managers with little-to-no poker experience refused to listen to those with 10+ years experience in the industry.

    Nearly everyone involved with UP on their April 30, 2013 launch date was long gone from the company by the time they closed today. These people mostly quit, though a few were fired. Many of these people quit despite not having another job lined up. They just couldn't take it anymore. It was that bad over there. I was told that it was one of the most frustrating, toxic work environments you could imagine. Even gentle, softspoken Terrence Chan walked out. It's not like legalized online poker jobs are plentiful. The fact that most of their staff walked out shows just how awful it really was over there.

    While Ultimate Poker's failure has been apparent to many for a long time, this closure surprised people because the company was hoping to bide its time until major market states (like California) would legalize online poker. The fact that this goal has been abandoned, perhaps just a year off from California legalized online poker, shows how badly this whole effort was hemorrhaging money, and how little faith the parent company had in the whole situation. Basically, this was a fail which cost them tens of millions of dollars, and I can't imagine the existing UP software being able to sell for very much money (if at all).

    It is easy to blame this on "the market", but that's simply not what occurred here. It's just a part of the story. The bigger part of the story involves empty suits thinking they knew poker better than those with connections to the community, and the catastrophic results that followed.

    And later...

    They are not prohibited from operating in California or elsewhere, but it's not going to happen, nor is this in the plans.

    They aren't just shutting down UP in Nevada. They are closing Ultimate Gaming, a company which existed years before UP opened. Basically they are shutting down their entire online gaming operation and giving up. For them to operate in California in the future, they would need to start the entire company back up (no small task), and then convince tribes there to partner with them, even though they failed in their two previous markets. Won't happen.

    Today's shutdown somewhat surprised me, because I thought they would make more of an effort to at least tough it out (even with decreased marketing expenditures) until next year, and then take a final crack at making this work with the large California market.

    But they're just giving up. Looks like the parent company has had enough, and the upside of letting Ultimate Gaming hang around until then isn't great enough. And you know what? They're probably right. While California has a 35 million population, it looks to me like, similar to the New Jersey situation, there will be maybe 2 dominant rooms and the rest will be appalling failures. So even if UP latched onto some desperate CA tribe, they would be crushed by Party, Stars, WSOP, etc.

    It would be throwing good money after bad.

    The UP experiment is over.

  14. #14
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    Quote Originally Posted by Dan Druff View Post
    A wise man on 2+2 named "Union Of the Snake" posted the following.
    A wise man indeed.


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    Serial Blogger BeerAndPoker's Avatar
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    Details someone with money on the site might want to know:

    http://ultimatepoker.com/nevada-players-update/

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    Owner Dan Druff's Avatar
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    Terrence Chan speaks for 36 minutes on the UP subject!


     
    Comments
      
      Sanlmar: Excellent post.

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    Owner Dan Druff's Avatar
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    Here is what the "Snake" had to say about the video:

    Thanks to Terrence for posting this very detailed 36 minute video. It was very fascinating to watch, at least for someone interested in the UP story.

    I can confirm that I am NOT Terrence, btw.

    I agree with most of what he had to say.

    He spent some time complaining about the salary structure of the UP employees, even though he conceded his own salary was probably too high!

    Terrence's complaint was that they brought certain talented people on board for relatively low salaries ($28-$40k), with the implied or stated promises that they would move up quickly if they did a good job. Then these people would pour their hearts and souls into the company, do a great job, and when it came time to review their salaries, they would be rewarded with a $5k raise when they were really doing work which justified doubling their salaries. When Terrence questioned upper management about this, they conceded that these people were worth more, but "they'll eventually get there", which obviously never happened.

    At the same time, Terrence watched them hire expensive consulting firms, spending obscene sums of money, and getting very little bang for their buck.

    Terrence was also annoyed that they did not take his feedback when assigning salaries or raises, even though he was the direct manager of these employees and in fact a junior executive himself at Ultimate Gaming.

    I can tell you from my experience in the corporate world that, sadly, there is a general resistance to huge salary increases, even when justified. This is because of an idiotic, old-school, bureaucratic model where a "raise pool" is established, and everyone at the company gets a piece of it. When the pool is out of money, that's it for the raises. Therefore, nobody gets staggering raises, even when completely deserved. At the same time, the company has no such budget restrictions on hiring expensive consultants, wild marketing expenditures, useless new hires (which oddly can make more money than people already at the company at the same position), etc. I will go as far to say that not consulting the direct manager for salary input is NOT standard, even at large corporations. Unbelievable that they operated that way at Ultimate Gaming.

    But I'm not defending Ultimate's practice here. Ultimate Gaming, while operating under the umbrella of Station Casinos, was supposed to be acting as a startup. A startup should be small, nimble, and flexible, and not subject to old-school, bureaucratic HR practices that large corporations are known for. That's why a percentage of startups become so huge so quickly. They aren't hindered by the red tape of large corporations.

    Sadly, Ultimate Gaming embodied the worst of both a startup (instability) and large corporation (inflexibility). A well-run startup will compensate people what they're worth, and not worry about what percentage of a raise it is from their existing salary. A well-run startup will not take the lazy way out and hire expensive consulting firms, but rather will pick out the right men for the job and get it done better and far cheaper. Ultimate Gaming did none of these things. Ultimate Gaming spent way too much in some places (and got little return), and way too little in others.

    A word about Chris Danek. He's Terrence Chan's friend, but he's not my friend. I barely know the guy. However, I have to echo Terrence's sentiments that he was dedicated to UP and seemed to know what he was doing. My first impression of Danek wasn't good. It was on this forum, and I didn't appreciate his initially flippant attitude regarding UP's usage of Greg Pierson's company to do identity verification (remember that?)

    However, as I got to talk to Danek, I was pleasantly surprised that he was very aware and knowledgeable about UP's existing problems, and had a lot of good ideas on how to fix them. It was actually a shock talking to him, because I was pretty sure I would be speaking to a clueless idiot making excuses, but instead reached someone who pretty much already knew all the problems. I asked Danek when these things were going to be implemented, and he told me it would happen on the next release, but that releases take a long time due to regulatory matters. Then most of these things didn't happen, and I wondered how someone so in touch with UP's issues could have again screwed up so badly.

    It turned out he didn't. Upper management stood in the way, which is why things didn't happen. People like Danek wanted to improve things and knew what they had to do to improve them, but weren't allowed to get the job done. You will see Terrence echoing this in his video, where he states that "deadlines were more important than quality control" and how "new features were prioritized over keeping existing players".

    You might have gathered by now that I didn't work at UP, and you're correct. You might also have some guesses as to who I am. My identity isn't important here, but I can tell you that my information came firsthand from various sources, which I pieced together to make my posts on the subject. Guys like Terrence obviously have more information than me, so it's always nice to hear from them.

    The takeaway here is that a poker site cannot succeed in the US legalized market if not run by poker people. This isn't like the unregulated market where there is enough of a player pool where slick marketing brings in the fish, the grinders will tolerate pretty much any kind of abuse as long as the games are good, and those companies often succeed to some degree in spite of themselves. The US legalized market is much tougher and there's much less room for error. If it's not run intelligently and efficiently, it will fail.

    "But wait, WSOP.com has all kinds of problems, and they are still around," you might say.

    Yes, but WSOP.com is still losing money. They're just not losing as much as UP, and they also benefit from the wise decision to partner with an existing mature product, so there is less potential for fail. There's lots that WSOP.com could be doing better, but that's another discussion for another time.

    So the basic story of UP was "good team, bad market, terrible upper management."

    Live and learn.

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    It's clear one of the biggest challenges if not the biggest was developing their own software and all the issues that came with that. They had to do a cost benefit analysis prior to making the decision to start from scratch. I'm not a programmer, but if your not committed for the long haul with your own software, why not start with canned or off the shelf software at the beginning? or pay a licensing fee....

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    Owner Dan Druff's Avatar
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    Quote Originally Posted by DannyDeadWood View Post
    It's clear one of the biggest challenges if not the biggest was developing their own software and all the issues that came with that. They had to do a cost benefit analysis prior to making the decision to start from scratch. I'm not a programmer, but if your not committed for the long haul with your own software, why not start with canned or off the shelf software at the beginning? or pay a licensing fee....
    Good question.

    It comes down to risk management.

    The high variance play is to develop your own software, and then either live/die with the product you created or trash it and go for an existing piece of software anyway. So if your own product works out, you will save money in the long run, you'll have more control of the product, and you'll be able to invent innovative features that wouldn't be possible with existing products. But if your product has problems, you've wasted the time/money developing it, and likely chased away a lot of customers due to its problems.

    It's interesting how UP had so much trouble here, because many new poker sites 10+ years ago sprung up, developed their own software, and everything was fine. This includes True Poker, Pokerstars, Party Poker, and even AP & UB. Originals like Planet Poker and Paradise Poker DID have issues, but you can somewhat blame that on the fact that they were literally the first online poker sites. Cake Poker also had issues, but they eventually worked most of them out (though it was too late).

    So yes, it's possible to create your own software, but you need to make sure it's good before you release it. The idiot suits at Ultimate Gaming felt that releasing a troubled product first was better than releasing a good product second. Huge mistake. If they really wanted to be first, they should have taken less of a chance with the software and gone with an existing product.

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    Diamond Hockey Guy's Avatar
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    Union of the Snake had sme very good posts. Unfortunately if your first 4 posts are good solid posts that are informative, you get banned.

    I think Druff should institute that rule here.
    (•_•) ..
    ∫\ \___( •_•)
    _∫∫ _∫∫ɯ \ \

    Quote Originally Posted by Hockey Guy
    I'd say good luck in the freeroll but I'm pretty sure you'll go on a bender to self-sabotage yourself & miss it completely or use it as the excuse of why you didn't cash.

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