What the Economic Crash Means for Poker (Part II)
Loading ...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.
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.
Everythingaboutpoker.com · Filed Under Poker News
What the Economic Crash Means for Poker (Part I)
Loading ...A provocative cover story by writer Richard Florida in current issue of The Atlantic magazine entitled, “How the Crash will Reshape America,” got me thinking about how the global economic mess could affect the poker industry. The trouble is few experts are qualified to offer any credible opinions. Prognosticators in the mainstream media know next to nothing about the gambling industry. Financiers and business forecasters have proven to be utterly worthless in predicting economic chaos or prescribing a solution. Even those decorated with academic credentials lack any real understanding of our unique subculture.
Accordingly, in order to foresee what might be ahead for many of us, I sought the opinions of individuals who possess real world experience combined with substantial knowledge about the poker industry. I wanted to learn what they predict will happen to global economic markets, the U.S. economy, the gambling sector, and the poker industry. That’s an ambitious agenda for a poker column and a lot of territory to cover.
The assembled panel consisted of variety of successful people, each with unique insights, including an attorney, a former management consultant turned author, a tax accountant, a psychologist, a high-tech consultant, a computer programmer, a college professor, a former online poker executive, and a casino industry observer. Some of these names will be known to you; others will not. All who responded have strong opinions, which sometimes conflict. Their only common trait is that each expert has been playing poker for many years and follows the poker industry closely. This is a two-part series.
Nick Christenson
Nick Christenson has been a fixture in the information technology field for over 15 years. He has written over 250 reviews of gambling books, many of which have been published in Poker Player Magazine. Over a decade ago, Christenson founded and continues to oversee one of the most fascinating websites on Las Vegas and the gambling industry, the “Las Vegas Casino Death Watch.” He also co-wrote “Winning Strategies for No-Limit Hold’em.” Christenson lives in Las Vegas.
I have been tracking Las Vegas casino openings and closings for over a decade. Generally, Las Vegas sees a greater number of casino closings during good times than bad. Casinos close more often when someone wants to replace them with something better. Even in really poor economic conditions, a Las Vegas casino will usually make enough money to justify keeping it operating.
Of course, we have already seen Black Gaming essentially close down the Oasis Casino in Mesquite, Nevada. We’ve also seen a fair number of casinos close in Reno over the last eight years. We could easily see more closings in these and similar markets that have and will be especially hard-hit by the economic downturn. If times wind up being really difficult, we may see a closing or two in downtown Las Vegas; a Strip property throwing in the towel is not beyond the realm of possibilities, either, but I don’t expect wholesale closings in Las Vegas.
This doesn’t mean that it will be smooth sailing for casino owners. I’d set the line on the number of corporate bankruptcies by companies with a Las Vegas presence at three. In most cases, though, I don’t expect this to cause casino closings, although as with nearly every other corporate sector, several rounds of “belt tightening” are all but certain.
How will this affect the Las Vegas poker scene? During the poker boom of the early part of this decade, there was a mad rush for casinos to add poker rooms as quickly as possible. Since the poker wave has crested, we’ve already seen the beginnings of a consolidation in Las Vegas. I expect this trend to continue, with several, perhaps many, of the smaller rooms closing over the next few years. Still though, even if the economic downturn turns into a serious depression, I’d still don’t expect the number of poker tables in Las Vegas to drop below the numbers that existed 10 years ago.
Perry Friedman
Perry Friedman is an online gaming programmer, World Series of Poker bracelet winner, and self-described “raconteur.” He is also a sponsored pro at Full Tilt Poker. Friedman is a graduate of Stanford University and now lives in Las Vegas.
Living in Las Vegas, I have seen the effects of the current downturn firsthand. Casinos have been hit pretty hard. Several of the major casinos are in danger of bankruptcy or restructuring. Some casino projects have stalled, while others have been completely abandoned. You can’t read the newspaper or watch local news without more bad news being reported about the casino industry. People are still coming to Vegas, but they aren’t spending as much while they’re here as before.
On the bright side, gambling in general tends to be pretty resilient when it comes to economic downturns. There is always the “lottery effect,” where gambling is a way out for people who perceive themselves as having no other alternatives. However, those people aren’t about to head to Las Vegas to gamble — they will instead play locally (whether it’s the lottery, horse betting, online gambling, or whatever is available to them).
As far as poker goes, live poker is seeing the same downturn. The recreational poker player now has less expendable income and cash game poker doesn’t have that same “lottery effect.” On the flip side, tournament poker does have that big reward potential. I believe tournaments will suffer less than cash games. Tournament poker was already seeing a slight decline prior to the economic downturn, mostly due to the huge peak it hit in the post-Moneymaker era. I expect this year’s World Series of Poker to do about the same numbers as it did last year. I think that as the economy rebounds, the poker industry will begin to rise again. There is also hope with the new Administration in place that the regulatory environment may change for online poker, which could lead to a new resurgence in live poker as well.
Everythingaboutpoker.com · Filed Under Poker News
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