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Beyond Brick and Mortar

A whole new poker room (.com)

Beyond Brick and Mortar

Experience counts, especially in the poker room.

“Ask a good gaming industry CEO to take you to his most experienced player,” says Bee Estes, poker room manager at the Atlantis Casino Resort Spa in Reno, Nevada, “and he’ll take you to the race and sports book or the poker room. These players have figured out they can’t beat the casino, but they have to get their game on nonetheless.”
 

Now, there is a whole new generation of casino players who have honed poker skills in an online environment prior to ever setting foot in a brick-and-mortar gaming establishment. Consider John May, who made World Series of Poker history as its youngest participant, playing in the 2010 WSOP one day after his 21st birthday. It’s these types of stories that drive the poker boom straight through today’s economic instability.

Ask even the most casual poker observer to identify the most profound impact on the dramatic rise in the popularity of the game, and you’ll hear about:

  • Chris Moneymaker, the aptly named accountant who won the 2003 World Series off an entry earned in a low-buy-in satellite tournament.
  • Henry Orenstein’s “hole cam,” which by broadcasting players’ hole cards to the television audience, changed watching televised poker from a passive experience akin to watching paint dry to an interactive, armchair-quarterback spectator sport cum poker tutorial.

 

These days, those in the know are also citing online poker as the magic ingredient that has enabled brick-and-mortar poker to survive—and even grow—despite the worldwide economic maelstrom of the past few years. “All across Europe, where they have both online and brick-and-mortar gaming, there has only been additive business in live poker rooms as a result,” comments Seth Palansky, communications director for the WSOP.

Indeed. The 2010 World Series enjoyed its best year ever, hosting nearly 80,000 players, which represents a 20 percent increase in players over the 2009 event. Doesn’t seem the economy is affecting the world’s largest poker event.

“What’s really happening is that the growth is coming from outside the United States,” explains Palansky. “Poker is exploding across the globe and more people are playing the game than ever before. The WSOP continues to attract participants from well over 100 countries each year, easily surpassing spectacles such as the Winter Olympics.”

Online: What’s In It For Me
The online environment offers education and experimentation for free or, for those who choose to play for money, for blinds as low as 1 cent/2 cent. The safety net of the online environment inspires confidence so that when players arrive in a brick-and-mortar casino, they immediately feel comfortable jumping over the rail and into the live action.

“I see online poker as helping to grow the pie rather than carve the already-existing pie into smaller pieces. Many new players still find it intimidating to take their first steps into a poker room,” notes Andy Rich, director of poker operations for the Rio and Caesars Palace in Las Vegas. “As little as five years ago, the typical conversation with new poker room customers would reveal that they had played in a kitchen table game, but not yet a casino. Today you’re more likely to hear that they have played online for some time before ever entering the casino.”

While there certainly are players who will prefer to remain in the anonymity of the online environment, enjoying the anywhere/anytime convenience the medium provides, poker room managers in destination and frequency markets alike cite the social environment, the displays of emotion, and the visceral feeling of holding tangible chips in one’s hand as just a few of the compelling reasons that people continue to flock to brick-and-mortar poker rooms.

“They play online, then they want to step up their skills and try it live. The thrill of raking in the chips, the notoriety around the table and the camaraderie just aren’t a part of the online experience.” says Tom Gitto, director of poker operations at Trump Taj Mahal Casino Resort in Atlantic City. “When they come into our poker room to sign up, they say to their friends, ‘Did you know this is where Rounders was filmed?’ People take pictures where Matt Damon and Ed Norton were in the movie. That’s a unique experience you can’t get online.”

“The exhilaration, the real-world aspect, the social aspect. That’s what makes live poker more enjoyable. People like feeling the mood, touching the cards. If someone takes a beat in a live game, you can see the emotion,” says Chicagoland’s Horseshoe Hammond poker room manager Jason Newman. “Live poker is like mixing the lottery with prize fighting: in the end, it’s one-on-one, two people against each other.”

“Besides,” says the Atlantis’ Estes, “Poker is a game of ego, and people don’t get that ego rush in the inanimate, impersonal online world.”

It’s The Economy, Stupid!
The economy is another undeniable factor contributing to changing patterns of play in brick-and-mortar poker rooms. Marketing scientists CEO Gary Loveman and CMO David Norton of Harrah’s have longed talked about the “avid experienced player” as being Harrah’s Entertainment’s best customers, but now avid customers are using their knowledge of the industry to take a more planned approach than ever before. Players are contemplating how they can get the most bang for their casino entrainment buck, and many have turned to poker as the game with the greatest possibility of leveraging skill—in addition to luck—to create a legitimate chance of walking out of the casino with more money than they had upon entering. Some are playing tighter; some are playing for less time.

“As the economy slows, people are looking for something that’s a little more controllable when it comes to their gaming. Nothing is more controllable than poker,” states Kathy Raymond, executive director of poker operations at the Venetian and the Palazzo. She also notes that hers was traditionally a room with very little limit play, but now that the economy has changed her customers’ patterns of play, limit comprises approximately 50 percent of the action in her room.

Historically, due to the game’s low margins, casino executives have questioned the allocation of precious square footage on their gaming floor to poker. The Atlantis’ Estes reminiscences, “Years ago, I was card room manager at Harvey’s in Lake Tahoe. One Saturday night, I was gazing into my room with great pride because all 19 tables were jamming. Then, the VP of marketing came up behind me and whispered, ‘I can put a cookie stand in that space and make more money than your room ever will.’”

Estes’ response? “Sure, typical poker players are low-profit, low-margin individuals. However, the upside to those types of customers is that their friends, wives, etc. are also in the casino and are doing what they know how to do—pull handles on slot machines.” Touché.

When the boom hit in the mid-2000s, everyone wanted a poker room. As a result, in larger markets such as Las Vegas, play is split among more rooms, creating gaps in play at certain day-parts such as the wee hours of the early morning.

The Venetian’s Raymond counsels, “There is a large fixed overhead associated with poker. Casinos like the game because it brings players in house to play other games, frequent their hotels and restaurants, etc. However, with smaller poker rooms, there’s just not enough foot traffic to generate the ancillary revenue to offset the fixed costs.”

Promotions and Technology
One of the most powerful levers at a poker room manager’s disposal is promotions, which can help open, adjust and shut the spigot of play, and so must be controlled carefully. Raymond is credited for breathing new life into the Las Vegas poker scene with the creation of Deep Stack tournaments at the Venetian in February 2007.

Just as some were beginning to notice a shaky economy and initial rumbles of what has become an unstable housing market, Raymond was observing the progress of poker in her room, the skill base that had grown on pace with the game’s popularity, and players’ desire for a structure in which their skills would have a chance at trumping their less skilled opponents’ luck. She realized that blind structure was more of a driver than chip stack with respect to allowing players to flex their skills, and so doubled the length of duration a given blind structure would last within tournament play, effectively allowing players to make educated decisions with the cards they were dealt. “Players wanted it, we offered it, and now they are more or less demanding it from all casinos.”

Indeed, over the game’s history, innovation has driven its growth. In addition to the hole cam which purportedly was conceived and tested at the Trump Taj Mahal Casino Resort, the Atlantis’ Estes is credited with inventing multi-deck hand rankings and the “By the Button” rule, and in 1987, being the first outside of the California card rooms to introduce table-side dining to the poker room.

In Atlantic City, the Borgata is offering a “Survivor” tournament on Sundays in which the final 10 percent of “surviving” players receive 10 times their buy-in back in cash. It seems tournaments may be going in this direction with a more flattened payout structure, because giving regular players something back makes it more likely that they’ll buy in again soon.

Increasing the volume in the poker rooms is good for everyone, including those who manage the casino’s marketing database. Leveraging the prevalence of mobile phones and the power of the casino’s Genesis Bravo system, the Venetian’s Raymond has launched a text notification program in her poker room. In exchange for providing a mobile phone number, phone provider, players club card number, what types of poker they like to play and in what day-parts, participating players can now receive a text on their phone when one of their favorite games has five players or more. The text cues the player to call the casino, put his name on the list for that game, exchange his pajamas for some clothes, and when he arrives at the casino, find his seat waiting for him.

For her next big tournament, Raymond is also debuting a computerized check-in kiosk, which will accept the player’s tournament buy-in and generate seat assignments much in the way airlines’ computerized check-in systems generate boarding passes.

The World Series of Poker’s Palansky notes the success of a WSOP Facebook game that has a half a million concurrent users who are playing for free, but have a chance at prizes that are redeemable at various Harrah’s Entertainment properties or events. WSOP also has a similarly functioning iPhone application. 

Palansky says, “So in other words, to survive today, brick-and-mortars need to embrace the technology, social media, etc., and make sure they are reaching the customers at the different touch points at which they consume. Traditional brick-and-mortars are used to mailing out fliers to customers, but if you tell 24-year-olds today that they have mail, they will assume it is e-mail.”

Industry veteran Bee Estes remembers back to the opening of Steve Wynn’s Mirage in 1989. “I remember talking to the poker room manager at Caesars Palace at the time and saying, ‘What are you going to do to retain players? The nicest, newest property in Las Vegas is opening up right next door, and they’ll have poker, too.’ He told me he didn’t need to do anything because the Mirage would simply bring more players down to his end of Strip. Less than six months after the opening of the Mirage, he entered his poker room and found no tables—Caesars had closed the room.”

Palansky acknowledges that online and live play both have their place, but that it’s critical for a casino to be cognizant of the changing demographics and mentality of its players: “The customer of the future is a different customer than the present, and different than the customer of the past,” he says. “They like doing things on their terms. They will always want to come to destinations and enjoy themselves in places like Las Vegas, but to connect with a brand with which they feel affinity requires more than an opulent casino nowadays. You need to keep pushing your brand out there and expanding it to new avenues and new consumers. We have no fear of cannibalization by online poker. In fact, all the data in Europe suggests quite the opposite. Online gaming using offline brands is a logical brand extension that helps keep the customer engaged and has proven to be quite additive to business.”

American Poker Idol
Many speculate as to how the legalization of online gaming in the United States would change the brick-and-mortar dynamics. “I don’t think that the legalization of poker will create new players,” projects the Taj’s Gitto. “The people who are going to play online already are. Sure, they’ll move to a legitimate site if some are banned, but they will continue to play online.”

Horseshoe Hammond’s Newman compares the peak of poker and its small decline to that of NASCAR, noting, “When NASCAR hit mainstream television, it blew up amazingly. That’s gone down, but they still have a much bigger audience than they ever had before the boom. We have regulars in our room 35-plus hours a week, four to five days a week.” These regulars leave the comfort of their homes, unplug from their computers, and fight Chicago-area traffic to get to the casino because live play is important to them.

“Poker is not dying. It’s alive and well,” says the Venetian’s Raymond. “Some poker players out of necessity have tightened the belt and may be back playing around the kitchen table, but when the economy loosens up a bit, the slow growth that poker is taking now will rebound in parallel with the economy. You can’t stifle the poker player.”

“When the economy first turned, poker’s popularity in casinos actually continued to rise. Poker is one of the better value propositions for a gambler. The fact that a better player should win in the long run because they are playing other lesser-skilled players and not directly against the house continues to fascinate the public and stoke the fire of the WSOP,” says Caesars’ Andy Rich. “Winning $1 million in a poker tournament in the new American Dream. The American Idol opportunity.”

Nicole Wolf is a freelance writer based in Las Vegas.

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