When Legal Online Poker Comes, One Insurer Will Be Ready
A company betting on the eventual legalization of online poker in the U.S. recently began offering a novel service to online gamers overseas: poker tournament insurance.
Launched Nov. 17 from Las Vegas, Bubble Protection is only available for players who live in countries where online poker is legal. “It might be easier to be a European company,” said Eugene Castro, the founder and chief executive of Bubble Protection. “But our goal is to cover the world, and we think in the future, 60 percent of online poker will be U.S.-based.”
Online poker in the U.S. is stuck in a legal muddle. Before feds seized the web domains of the top three online poker sites in America on April 15, 2011, an estimated 10 million Americans were playing for money. Although it’s unlikely the online poker would be legal in the U.S. before 2013, companies like Bubble Protection are already making a move on what they predict will be a massive industry.
Earlier this month, two Las Vegas-based casino companies, MGM Resorts International and Boyd Gaming announced they were teaming up with bwin.party, a Gibraltar-based online gaming development company, to jointly offer online poker in the U.S. The three companies formed the partnership in expectation of eventual legalization.
“You look at announcements like that from [MGM CEO] Jim Murren, and you can start to see how big this is going to be for the gaming industry,” said Castro.
Bubble Protection built its plan around protecting players who are “on the bubble.” In poker tournaments, the bubble refers to the last person to leave a game without taking any winnings. So if the top ten players in a tournament are guaranteed to take something home, the person who comes in 11th is on the bubble.
In this case, Bubble Protection expanded the bubble to include 10 percent of the total number of players in a tournament. Their coverage lets players insure their tournament entry fees, giving back the cost to entry to anyone who finishes in their bigger bubble. For a game with a $33 buy-in, bubble protection costs $3.96.
In the two weeks since going live through their website, BubbleProtection.com, Castro says hundreds of policies have been purchased, with about 50 policies in play at any given moment. They’ve also received a lot of customer emails—almost 800 in this week alone—mostly with questions about their coverage, since Bubble Protection is the first, and right now, the only, in the world of online poker insurance.
Castro’s company serves as a bridge between the worlds of online gaming and insurance. They’ve received a warm reception from the gaming industry, which hopes the insurance option will draw more players. Yet, most of their funding has come from the insurance industry, which Castro says sees how the situation is set up to benefit both the player and the gaming provider.
The one group that hasn’t gotten on board yet is advertisers. “No mainstream advertisers will attach to poker,” Castro said. “But that time will come.”
Castro thinks that once online poker is legalized in the U.S., well-known companies will be scrambling to sponsor online tournaments. “The minute the switch is flipped, the industry will open up.”
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