Response from Hero Poker CEO

May 22, 2011 - 3:19 PM EDT

On May 22nd, the CEO of Hero Poker sent Subject: Poker the following response to our article about HP’s decision to stop accepting US players:

There is no simple single answer to my reasoning to pull out of the US Market, and truth be told it is not a complete pull out. But the decision nevertheless wasn’t something I came to lightly. As a network skin we generally follow whatever the network dictates, but that is more indicative of the type of management each ‘skin’ has. I don’t even like to use the word, ‘skin’ to describe what Hero is, I prefer to think of ourselves as a network site. So we share in many of the benefits of being part of network and in turn we are bound by many of the internal competitive policies of the network, but we are our own company who have made a choice to work with a network.

Clarification comes on two levels here, first on a company level, our primary company mission is to define and provide a up scale level of boutique service and the short version of that would be something akin to a ‘mini Stars’ where everyone of our players is treated as though they are a supernova elite or VIP. Since we had only officially launched in Feb 23rd, of this year, at the Aussie Millions, there are many things that are still not in place. It was not our original intention to approach the mature established poker market and simply put, as the CEO I am not happy with level of service we are providing for our current players. While we have been given favourable words about our service, I would like to clearly own this area of boutique service and it is an immense task. When our original focus was emerging markets (when we first launched), the level of knowledge and demands of these markets were unsophisticated as most of the players were micro stakes or just learning how to play poker for the first time. But in taking on players from the most sophisticated and mature market, I had to make an executive decision to cap players from this market so we can establish a sustainable and relevant service for them. Of course that is one side of it, and probably not the part of actual interest to your publication.

The second part comes from my background as a professional manager in the industry. I am not one to simply react, and as the former Regional Marketing Director of PokerStars in Asia, and having opened that market to poker, I have experience on all levels from government relations (having set-up the legislation for poker in Macau with the Macau Gaming Commission) to even how a live card room works in a casino. Since the events of April 15th, I have been digesting the information from an executive’s perspective. A couple of conclusions that I had reached were that player’s confidence would never ever be the same, and that there was notable level of uncertainty in the market environment.

Engaging the market was not my first reaction, rather it was not until Stars had reached an agreement to pay out players and did so, did I feel that Hero could engage the players as well. But in what fashion? And again, it was a matter of being as transparent as possible in the context of still running a business. But as we engaged the market, it has been increasing clear to me that as no new information had emerged that I could not simply continue as is.

If I am to say, ok we are going to provide the best service possible, then for me, that means on all levels. And all things being as they are, I don’t think I will be in a position to do that if we are actively engaging the US market. Because I do run through my mind all the possible scenarios and at certain points do I know that even with my experience, resources and capabilities, the status quo could become unmanageable for Hero.

No player wants to hear that and I’m not saying that is the case now, but us pulling out of the US market is an attempt to keep most scenarios in a scope to be managed by taking a step back from a complex market environment. And this action has been interpreted in many ways and it extremely difficult to say, Hero is sincere in its commitment to our existing players and for it to be taken seriously. But the goal has always been a long term one for the players and company.

I believe true management is preparation and guidance, not reaction and troubleshooting. It is during the periods where the status quo seems fine, where a company has the freedom to act upon its volition opposed to reacting during a crisis. It is hard to articulate this in a public forum to players who do not see things from a managerial point of view and just wants ‘fish’, rather their first reaction has been further distrust. And who can blame them? Aren’t poker sites supposed to keep on going for player numbers and liquidity?

But the key point of clarification here would be, I assume that all players that play on Hero are on Hero because we’ve earned some level of good will. And the source of that good will has been our attempt to be as transparent as a business can be but also to exert as much my managerial expertise as possible. And we simply cannot continue do that while still active in the US market. So more than anything, our actions is not a commentary on the environment or growth considerations or other sites, it is simply what we feel is appropriate and prudent action to be true to what we’ve set out to do.

Edited on 5/22/2011 8:42 PM EST: Changed “take step back” to “taking a step back” at the CEO’s request.