You can learn a great deal from exceptional people by observing and asking thoughtful questions. By some margin, what I considered to be the least thoughtful, throwaway question I asked Mark Scheinberg during my entire time at PokerStars was “Who do you feel are our main competitors?” The answer was profound.

My memory allows me to recall nearly every aspect of that unusually trivial meeting despite it being over a decade ago. It lets me revisit minor details that seem unimportant at the time but often prove otherwise. It is both a gift and a curse, of sorts. I can picture the faces of all the people in that meeting, where they were sitting and the details of the conversation. I can remember the picturesque vista from the top room of the Douglas Bay Complex on that clear spring afternoon. It was a white painted scene unique to British seaside towns of a certain era. It was so spectacular it was almost enough to make you forget that anywhere you could drive from there would still be in the Isle of Man.

Another memory of note is that on the day I went for my interview at Stars, PartyPoker had plastered ads all around London about The Monster. Underground trains. Taxis. The ads were everywhere. Party was the clear industry leader at the time, and The Monster was getting mainstream promotion beyond anything the industry had attempted before. The Monster ultimately never arrived, slain by the UIGEA. Party went from first to nowhere and has done little but talk a good game (at various points) since. From then onwards every operator feared their carefully planned promotion coinciding with even a minor Stars one. Discounting the current grey market operators (who are playing a different long game), it would appear no entity has been able to consistently come up with an answer to Stars plugging something into their ‘xCOOP’ promotion generator thesaurus since.

Although the answer Mark gave at the time was of its era, the logic behind it is still relevant today. It explains how Stars are still strategically dominant despite more than a decade of standing on rakes, Sideshow Bob style. The Monster was one of the last times Stars was under genuine competitive pressure. The same logic also clarifies why poker might be one of the most important verticals going forward, especially in the context of the ‘what will we do when we can't throw money at acquisitions?' debate currently underway in the nascent US markets.

Since the end of the Scheinberg era, Stars has pivoted from one strategy to another and then back again. It has created markets, then exited them, when they went from nice grey to uncomfortable grey. It has released, retired or rebranded multiple games and promotions, achieving little more than making some well-tended LinkedIn profiles look better than they should. For the origins of this, you have to appreciate that Stars of a decade ago bled poker. The staff were poker people, many of whom were at their dream employer. Senior staff trawled the 2+2 boards officially and also under nom de plumes. The great strength of this is that it gives you a close affinity with the people who are your key, revenue-generating, customers. It also means that there is a perpetual product tension between designing for the people you like to (and actually) sit beside, and the people you like to play against. At various points the balance has swung between these two extremes, but the result has often been confused, hybrid, or kitchen sink products that serve neither cohort strategically.

Despite these struggles, not a single competitor has landed a real blow. Everyone ended up fighting within Stars’ (often self-defined) territory and constraints. Often, new entrants seem to think that a nostalgic return to the 'fundamentals' (whatever they are) is the solution. This is a textbook category error. PokerStars was not successful because of the time and treasure lavished on the shouty voices at 2+2, it was successful in spite of it. An interesting contradiction is that many poker companies hired ex-Stars people who, with little sense of incongruous thought, attempted to replicate the Stars model while simultaneously proclaiming the indispensability of the Scheinbergs to that success. Maybe it is because poker, as a product, is too hard, with insurmountable ecosystem advantages. Maybe it is because when you have grown up with huge, cinematic, big-budget video games, the domination of the comparatively simplistic hold’em (a game many PokerStars employees I worked with were openly tired of), a tabular UI and an established revenue model, your innovation instincts are boxed in.

The challenges listed above are great for start-ups - established companies stagnate when no one is willing to risk their career by betting against the shibboleths. However, poker is the fourth most important of the four verticals for a reason. It attracts disproportionately fewer start-ups for a reason. Yet it has unique attributes that differentiate it from the other verticals and it offers a potential path out of the wrestle-in-the-mud stalemate of the other markets. Despite this opportunity, most gaming executives are focused on lauding the latest minor sports betting app tweak. Some of the key performance indicators for someone running sports betting at one of the big companies must be comically trivial in a commercial sense.

The answer Mark gave was BWin.

I can’t be certain of his exact reasoning for it, but I can consider it in the context of other conversations to derive what I feel is a fair insight into his logic. Also, my default position is never to underestimate a Scheinberg opinion. While BWin had merged with Party a few years earlier, Mark would have named Party specifically if he felt they were the threat. BWin was especially strong on sports and casino at the time, but the Itchy & Scratchy & Poochie Show extension that was Bet Stars, and the confusingly/imaginatively named PokerStars Casino, were years, and a change of ownership, away. I’m pretty sure that Mark understood that the competitor we needed to fear was not the one we could see, the ones who were playing the game Stars defined. It might be a competitor with a strategy that initially appeared unorthodox, or one that could exploit the weaknesses in the model and have the resources and motivation to play a different, longer game. “BA doesn’t respond to the taunts of Virgin Atlantic” were the exact words he used in that context. Ultimately, if you were Yahoo, you should have been looking out for something like Google.

This all happened a long time ago, but it matters today because, at some point, Stars will eventually stop standing on rakes. They have good people, clear advantages and some of their products and execution are outstanding. Flutter CEO Peter Jackson also identified the need to 'Reassert PokerStars’ leadership in poker' through investment and marketing spending, so resources are being applied. If Flutter ever gets it right at the same time as the US market evolves, it will potentially have a crucial advantage. The relative stalemate in the regulated states may end up a mirage. However, there is still time and space to succeed as Diet PokerStars is ultimately constrained by the boundaries of the product that Full-Fat PokerStars defined over a decade ago. Flutter, despite, and because of, their scale, are incapable of resolving the perpetual product tension.

You can't out-poker PokerStars, and you (probably) can't outspend Flutter. The PokerStars of today is a strange corporate org-chart sideline, a docile facsimile of what it once represented. It no longer drives the narrative, but the entities competing against FanDuel in the US should fear it greatly. Flutter will fight you to a standstill on bonuses, the efficacy of your UI and your parlay range while slowly coiling Stars around the poker markets, newly licensed state by newly licensed state. It will lazily regurgitate the same live tour/xCOOP playbook, but every month, every quarter, it will get better at cross selling, better at leveraging this advantage. The Stars product will evolve to expedite this in ways competitors with nondescript poker offerings will not be able to replicate (more on that later). This is the medium term battleground. It may even be the battleground. If the discussion you are having is little more than the nuance of some detail of user interface polish then you are competing for a distant runner-up spot. Indeed, if you are in the poker product space and you are having any discussions that the 2+2 crowd would be enthusiastic about, you are probably digging in the wrong place. Companies that spot the opportunity to compete on a different poker terrain can become a company like the mythical BWin that Mark feared, and possibly even one that can enjoy a strategic advantage across all four verticals as a result.

How does this relate to us? unpoker is not a poker site. We are not structured to compete with PokerStars or the ‘I can’t believe it’s not butter’ versions of 'free’ poker on the social media platforms. unpoker (in its unbranded form) will never be released as a game, but it is the foundation for one of the three products you would need to build to have a chance to strategically outflank what Flutter is doing with Stars.