CasinoGaming.com


	Sundays: Inside Gaming Tuesdays: Video Poker Wednesdays: Off the Shelf Fridays: Richard Eng, Player's Edge Saturdays: Pocket Aces

POCKET ACES

Columns

• Back to Maryann's index

• Back to columnists' index

Maryann Guberman has been a writer and editor with many gaming publications, including Sports Form, Card Player, Poker World, Player's Panorama and Systems and Methods. She also has written and edited numerous books on gambling.

Nov 24, 2007

Poker Room Economics 101

Not but a few weeks ago the Las Vegas Hilton, once holder of the title Most Poker Tables in Las Vegas (years ago when Tom Bowling managed it) turned out the lights a d replaced poker tables (I guess) with slot machines.

Immediately my poker contacts emailed me to let me know poker was dying (again). Only one seemed to understand the financial side of poker (other than from their own wallets) and how it might explain what is happening here.

(Sometimes I wonder if these people want to witness the demise of our favorite game!)

LetÕs look at the economics of a poker room from the first (and usually only) perspective of import -- managementÕs bottom line. A casino opens its doors for one reason and one reason only. The owners want to make money. If they could figure out a way to get you to walk in through the front door, drop your cash in a donation box and continue walking right to and through the back door into your own little world, they wouldnÕt mind at all. That kind of action would save salaries (lots of them), health insurance (yep), astronomical power bills, and all those expenses needed to operate a megaresort. Barring that convenience, the establishment will offer incentives that can produce the same results. They will provide table games, board games, pari-mutuel wagering and slot machines, where you have a chance to win. In some cases you could win big money but in most instances, you will drop your bankroll down to the zero point eventually.

There was a time (pre-corporate Vegas) when casino execs lured people in with loss leaders such as the dinner buffet for $2.99 or a weekend in the tower suite for $25 a night. Then came the corporation with its stockholders, CPAs, bookkeepers and mega-salaried CEOs who decided the loss leader was an unnecessary method of competition. They dropped the specials and began insisting that every single entity in the casino show a profit. The buffet soared from just under three bucks to quadruple that amount (and more); rooms began to cost more than a night at the Waldorf on New YearÕs Eve, and mid-management suits began to track player activity to make sure any comp they offered would be won back in spades.

On the casino floor the poker room became a definite deficit. Needing at least three employees per table per shift, the low-limit games couldnÕt compare in profitability to even the lowly keno board. Cries from poker fans that ensured casino management that wives, friends, and relatives of the lowly poker player would come to the casino with him and fill the coffers elsewhere went unheard. One by one the poker tables made way for slot machines.

Then came the savior of the stepchild called casino poker. A sudden burst of televised games and the advent of online poker pointed toward a new interest on the casinoÕs part. Instead of offering those meager $1-$3 limit games, a poker room could deal higher limits, attract more players, and reap some of the publicity heretofore reserved for sponsors of TV poker. Also, those high-rolling, no-limit players would pay the inflated room rates and dine in what many food critics claim are the most expensive restaurants in the world (John Curtas, KNPR Food Critic -- KNPR, November 23, 2007).

And thatÕs where the poker situation sits as of this date, except ...

It seems the closing of the Hilton has helped fuel the fire of those who are predicting the rapid demise of poker and while this might be the beginning of a barometric reading, other factors have to been in play just prior to this event.

No offense intended but the Las Vegas Hilton, separated from the Strip by one very long block with just the Las Vegas Convention Center as a draw for its gaming offerings, is not the destination point it once was. Where the carpet was always clean, the chandeliers glittering, the air relatively free of smoke, the dining exceptional and the employees smiling and friendly, we now have more or less dingy flooring, dusty lighting, far-from-fresh air, lukewarm food and a staff of people who appear to be waiting to retire or move on to bigger and better things. ItÕs now, the way I experienced it just recently, cold and distant. As an out-of-town convention attendee, I would much rather scoot into a cab and head to the Strip after a day on my feet (and trust me, you walk a lot when you attend a convention at the Las Vegas Convention Center). ThereÕs so much to see in such a small space. Caesars, Mirage, Bellagio, TI, Venetian, Wynn, one right after another, with outdoor eateries, quick access from the sidewalk, and over-the-top shows, spectaculars and so many dining choices.

If the Hilton thought its poker room would flourish from conventioneers, they thought wrong so the demise of that room could have been predicted from the start, had anyone wanted to predict it.

Still, to clarify things, I think pokerÕs popularity is waning somewhat. Maybe another major tournament or totally engaging winner or a gazillion-dollar promotion will cause a sudden spurt of favoritism but itÕs time to take the game back a bit and let it settle where it can be comfortable for everyone. ItÕs time everyone learns that the game isnÕt one big tournament but it can be relaxing, fun, and profitable for a few hours at a time. Good poker rooms will continue to offer good games; medium-sized rooms will likely make way for slot machines, and smaller rooms that cater to locals will continue to thrive. Poker in places other than major gaming arenas will continue to draw players. ItÕs a given.

The game introduces people to the gaming facility and people produce money. Smart operators will understand that and take advantage of it, and that means weÕll be able to find a game most of the time. And in the end, as in the beginning, it will all be a about the money. That is the way all business, including the poker business, works.