What the Economic Crash Means for Poker (Part II)

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This is Part II of a two-part series on perspectives of the economic crisis and its possible impacts on the gambling and poker industries.

Economic Crash Lou Krieger
Prior to playing poker and writing about the game for a living, New York-born Lou Krieger was a management consultant in California and Washington, D.C. As one of the most respected writers in poker, he has written over 400 columns, 11 books, and is the host of “Keep Flopping Aces,” a weekly show on Rounders Radio. Krieger has written for Card Player magazine and is the editor of Poker Player Newspaper. He was named one of the most influential gaming authors of the past century, an honor given to only five poker writers. He lives in Palm Desert, California.

Last Friday, I walked in the Agua Caliente Casino poker room in Rancho Mirage, California, which is about six miles from my house and where I usually play poker. It wasn’t a holiday or a three-day weekend and no special events were going on, but all of the tables were filled to capacity. Long lines existed for the majority of games and here we are in a recession, which made me wonder.

Earlier in the week, I heard a local radio interview with Richard Milanovich, Chairman of the tribe that owns Agua Caliente as well as the Palm Springs’ Spa Resort and Casino. Milanovich is a savvy guy who seems to have his fingers accurately on the pulse of the local economy. He said that while the tribe was feeling the economic pinch in the same way everyone else was, the numbers for Agua Caliente Casino were a lot better than the numbers he was seeing for casinos in Las Vegas.

He pointed out that it’s less costly for locals to play here and less costly too for weekend visitors from Los Angeles since Agua Caliente is only about 110 miles from L.A., while Las Vegas is a good 250 miles.

I guess I didn’t really buy it at the time, but having witnessed it in person, it sure made sense to me. Of course, it was impossible to tell how many poker room patrons were locals and how many journeyed there from Los Angeles or San Diego, but the room was packed and Milanovich’s assessment seemed spot on.

I’m still a bit confused by all of this. After all, if someone from L.A. is looking for a poker game, there’s no need to drive 110 miles to find one. Los Angeles is full of poker rooms. On the other hand, for a small, weekend getaway vacation, Agua Caliente is a less costly alternative to Las Vegas and also provides full casino gambling in addition to poker. Non-poker playing family members can have their fill of slots and other games, take in shows, and play golf.

I’m hearing anecdotal data from guys who have been forced into poker playing to feed their families and that might account for some of the crowding at the tables too. On my weekly internet radio show, “Keep Flopping Aces,” one caller last week told me he lost his job as a restaurant manager, couldn’t find employment, and had to turn to his hobby, playing poker, as a job rather than an avocation. He’s at his local casino every day, grinding out a living at the tables, and it’s paying better than anything he could find in the work-a-day world in this economy.

My summary is that Las Vegas will show reduced numbers for the duration of the recession, while local casinos, although not flourishing, will pick up some of the folks who heretofore were regular visitors at the Strip. I’m sure some players will try to ply their trade and earn a living at the poker tables, although the majority of them will probably fail at this endeavor in the long-run.

Russ Fox is a tax specialist and poker author. He is one of the most respected authorities on the subjects of taxation and the law and taxes on gambling winnings. Fox runs and operates a website called “Taxable Talk.” The site regularly features topics of interest to gamblers and poker players. Fox also co-wrote “Why You Lose at Poker” as well as many others strategy-based articles. He lives in Irvine, California.

The poker economy has already felt the impacts of the Unlawful Internet Gambling Enforcement Act (UIGEA). Coincidentally, I’ve noticed what I estimate to be a five percent drop in players in local (Los Angeles area) card rooms. Meanwhile, the world economy is now definitely in retreat with massive stimulus programs being politicians’ main idea of a fix. Unfortunately, history tells us that government interference in the economy could actually make the situation worse, which is what happened during the Great Depression.

I see two possible near-term outcomes. We could see the Federal Government further attack online gambling, including poker. I remember when my friends said that the website Napster would never be shut down. However, a judge did just that. The staff at the Department of Justice has been very negative towards online gambling; to think that’s going to change suddenly is foolhardy. While I’d love to see online poker legalized in the United States, I believe that to be very unlikely to happen in the near future.

Alternatively, poker could prosper in the coming years. There’s historical precedent for this. During the Great Depression, the card game bridge boomed in popularity because of the famous Culbertson-Lenz match. Indeed, some bridge matches made the front page of most newspapers. In bad economic times, people look to escape. Poker, a much easier and more familiar game to Americans than bridge, could easily prosper. Of course, in this day and age, this means appealing to television rather than newspapers, which we see is already happening. It would also be ideal to have a personable individual win the WSOP Main Event, who could then represent the game.

There’s no way to predict the future with any degree of certainty, but I’m hopeful that poker will continue to prosper in the next several years.