Monday, September 06, 2004
MSNBC - Poker proves a hot hand for gaming industryPoker proves a hot hand for gaming industry
Online and off, card game draws players with money, competition
Charlie Riedel / AP
The increased popularity of poker has prompted Harrah's and other casinos to open poker rooms at their properties.
By Jonathan Krim
Updated: 2:27 a.m. ET Sept. 6, 2004Jan Edward Helfeld moves along the bar at the Hawk and Dove, a popular after-work watering hole on Capitol Hill, scanning his quarry. He seems almost desperate, although he is not looking for romance.
Instead, he stops several people to ask: "Are you here for the poker meeting?"
Like others who have turned out, Helfeld is hungry to meet people who host or play in regular games he might join. He exchanges business cards with Jason Kim, who hosts a regular game for friends in Washington. They discuss stakes they like to wager and types of poker they like to play.
Poker is on fire, its popularity fanned by a combination of television, technology and, for some, the allure of big money.
• More business coverage
The game Mark Twain once complained was "unpardonably neglected" in the United States is now played by hundreds of thousands of people online 24 hours a day and by celebrities on television. It is one of the most popular subjects of "meet-ups" such as the one Helfeld attended, where people with similar interests find each other on the Internet and then gather to pursue their passion.
Industry estimates are that 50 million to 80 million Americans play the game. Card rooms in states where poker is legal are booming, while online directories list games and tournaments set up in garages and basements around the country. The game is consuming college campuses and has replaced video gaming as the idle-time obsession of many high school boys.
"It's just amazing," said Nancy Robinson of Arlington, whose 16-year-old son, Nick, has been playing nearly every night this summer with 10 to 20 friends who bet about $10. "I've seen a lot less computer games" among her son's circle of friends. "I certainly favor poker; it probably improves the mind more, and it's much more social."
'It reveals the human condition'
Players at all levels say the game appeals to their competitive instincts, challenges their brains and differs from other sports because it does not rely on athletic prowess or the ability to buy the best equipment.
"Other games dictate to you," said Kevin Wills, who like Helfeld is at the meet-up hunting for a regular game to join. "With poker, you can control the game, by either bluffing, being overly aggressive or passive."
Some big Hollywood names are smitten, too, and not all are playing for charity on the Bravo cable channel's Celebrity Poker Showdown. Ben Affleck won $360,000 in a recent tournament in Sacramento. Mimi Rogers plays often, as do Lou Diamond Phillips and James Woods. Even non-players are finding the televised events compelling, with players placing bets that can be worth hundreds of thousands of dollars.
"Poker is like a modern Greek tragedy," said Steve Lipscomb, chief executive of World Poker Tour Enterprises Inc., who pioneered the way poker is watched in the United States. "It reveals the human condition as well or better than anything else you'll find. You get the greatest highs and the lowest lows. That's the juice."
But it is the growth of poker as a business that is breathtaking to people in the gaming industry.
Cable TV viewer ratings for the "World Poker Tour" on the Travel Channel and the World Series of Poker on ESPN have been so strong that four poker-related shows are in development, although there is no guarantee that all will be aired.
Tournament entrants surge
The success of television and online poker has translated into a surge of entrants in tournaments, including the top tier events. First prize in this year's World Series of Poker, which took place in May and is now airing on television, doubled to $5 million from $2.5 million last year because of the increase in participants. The top tournament prize of "World Poker Tour" jumped to $2.7 million from $1 million.
When NBC broadcast a special "World Poker Tour" battle of champions opposite the pre-game show of this year's Super Bowl, an estimated 10 million people watched.
Poker had long been a late-night cable TV offering, but drew few viewers until three years ago when Lipscomb produced a documentary film on poker.
Lipscomb realized that watching on television was unsatisfying because viewers rarely saw the players' cards. In the most popular tournament game, Texas Hold 'em, every player has two cards that are dealt face down and are rarely revealed unless there is a showdown with another player at the end of the betting rounds.
Lipscomb, borrowing from a British TV program, developed the idea of putting cameras in the rim of the table to show the "hole cards" when each player looks at them. Viewers at home could then see what cards the players had and strategize along with them throughout the rounds of betting.
Lipscomb took the camera idea, and the notion of a more heavily edited, faster-paced and stylized program, to various cable TV outlets. The Travel Channel bit, and the "World Poker Tour" series was born.
"All of a sudden, poker became a cross between a game show and a reality show," said Dan Goldman, vice president of marketing for Pokerstars.com, an online poker site. "It revealed strategies. People started saying, 'I could do this, too.' " Although ESPN copied the camera idea and now televises the more well-known World Series of Poker, "World Poker Tour" Enterprises Inc. is growing rapidly, with tournaments in exotic locations and on cruise ships that have million-dollar prize pools. Last month, the company began selling shares of stock to the public, trading on the Nasdaq, and it has filed for a patent for its method of showing hole cards and odds for each hand.
Real money or play money
Thanks to sophisticated computer software and increasingly prevalent high-speed online connections, some of the biggest poker money is being made by companies hosting tables online.
In a recent 24-hour period, about $124 million was wagered in more than 100 online poker rooms, according to PokerPulse.com, a Canadian company that tracks the industry.
At peak playing times, the largest site, www.partypoker.com, has had more than 50,000 people playing at more than 5,000 tables.
Dennis Boyko, who runs PokerPulse, said that last month online sites were pulling in $3.2 million a day through "rakes," which are small portions of every hand played, depending on how much is being bet.
That number is up from $300,000 per day in January 2003.
All of the sites are based offshore, because of U.S. gambling laws, and nearly all are privately held, making it hard to pin down their profits.
An exception is PokerRoom.com, which operates as a public company in Sweden.
Chief executive Patrick Selin said that last year, the company reported profit of nearly $4 million on income of $16 million.
"This year it will be much, much, much, much more," Selin said. "You have to pinch yourself to make sure you are awake."
The largest site, www.partypoker.com, is estimated to be making $100 million to $200 million in profit a year.
Gibraltar-based Partypoker.com has more than 1 million registered users, said the company's general manager, Vikrant Bhargava. As with all of the larger poker sites, most players are U.S. residents, and can play for either real money or play money.
Shuffle and deal
Online gaming executives say they would welcome legalization of their industry, with regulation and taxation so that they could operate more freely.
Citing the possibility of online poker rooms being used for money laundering, the Justice Department has pressured credit card companies to refuse to let players conduct transactions with the sites using credit cards.
Instead, U.S. players must use services that deduct or add funds to their checking accounts.
The Justice Department has told publications, Web sites and other media outlets that they cannot accept advertising from online gambling firms. One site is challenging the ban in a lawsuit in New Orleans.
So far, nothing has slowed the online poker juggernaut, which is transforming the tournament landscape that had long been the province of a relatively small circuit of professionals.
Last year, the World Series was won by the aptly named Chris Moneymaker, a Tennessee accountant who had honed his skills and qualified for the series by winning an online tournament. Moneymaker, an unknown in poker circles, became an overnight media sensation.
Online poker is minting a whole breed of young, aggressive players who are taking the sport by storm in part because they can gain experience quickly. Poker online moves fast, with time restrictions for considering bets.
With no waiting for a human to shuffle and deal, people often play more than 30 hands in an hour. Some play at multiple tables, using extra-large or dual computer monitors.
"In the 1990s, it would have taken you 20 years to get the amount of experience that it takes in a year now," said Annie Duke, who has been tutoring Affleck and is regarded by many as the top female professional in the game.
And those players can get a chance to do what is impossible in almost any other sport: Start from nowhere and be able to challenge the best in the game.
"How many people wouldn't love to go one-on-one with Michael Jordan?" said Daniel Negreanu, 30, a top professional who moved from Toronto to Las Vegas in his early 20s to pursue a poker career. "Poker offers people of all sizes and ages the chance to be a superstar."
But that kind of talk alarms those who deal with gambling addition.
Responsible gaming
"We think the problem is accelerating," said Keith S. Whyte, executive director of the National Council on Problem Gambling. Whyte said the council had a 15 percent increase in the number of calls to its hotline last year, and is expecting similar numbers this year. "It's the glamorization of this on TV and the easy availability online."
Whyte said online poker is especially worrisome because it can be played by minors, is solitary and available all the time, which can invite addictive behavior and devastating losses.
"Virtual money . . . is easier to spend and easier to get away from you," he said.
Whyte would like to see online gambling sites provide for more responsible gaming, such as imposing loss limits on players and prominently displaying addiction hotline numbers.
Some online sites train their staffs to watch for signs of excessive, addictive betting patterns. ESPN has run some public-service ads warning of problem gambling, and Whyte said he has urged "World Poker Tour" to do the same.
A spokesman for Discovery Communications, which owns the Travel Channel, said such ads will be aired next spring during its next championship broadcasts.
Some professionals worry that poker is in danger of media over-saturation. So far, there is no sign of that.
Shabbir Safdar of Cleveland Park keeps an online blog, or Web diary, of his gambling, posting his profits and losses. For the year, he is down more than $700, but he writes that his interest in continuing remains strong.
"I've set aside $300 as a stake to enter $10 tournaments all [this] month," he writes. "My math suggests that this should be enough to protect me from the swings unless I have a statistically improbable bad run."
Ann Marchand of washingtonpost.com contributed to this report.
Online and off, card game draws players with money, competition
Charlie Riedel / AP
The increased popularity of poker has prompted Harrah's and other casinos to open poker rooms at their properties.
By Jonathan Krim
Updated: 2:27 a.m. ET Sept. 6, 2004Jan Edward Helfeld moves along the bar at the Hawk and Dove, a popular after-work watering hole on Capitol Hill, scanning his quarry. He seems almost desperate, although he is not looking for romance.
Instead, he stops several people to ask: "Are you here for the poker meeting?"
Like others who have turned out, Helfeld is hungry to meet people who host or play in regular games he might join. He exchanges business cards with Jason Kim, who hosts a regular game for friends in Washington. They discuss stakes they like to wager and types of poker they like to play.
Poker is on fire, its popularity fanned by a combination of television, technology and, for some, the allure of big money.
• More business coverage
The game Mark Twain once complained was "unpardonably neglected" in the United States is now played by hundreds of thousands of people online 24 hours a day and by celebrities on television. It is one of the most popular subjects of "meet-ups" such as the one Helfeld attended, where people with similar interests find each other on the Internet and then gather to pursue their passion.
Industry estimates are that 50 million to 80 million Americans play the game. Card rooms in states where poker is legal are booming, while online directories list games and tournaments set up in garages and basements around the country. The game is consuming college campuses and has replaced video gaming as the idle-time obsession of many high school boys.
"It's just amazing," said Nancy Robinson of Arlington, whose 16-year-old son, Nick, has been playing nearly every night this summer with 10 to 20 friends who bet about $10. "I've seen a lot less computer games" among her son's circle of friends. "I certainly favor poker; it probably improves the mind more, and it's much more social."
'It reveals the human condition'
Players at all levels say the game appeals to their competitive instincts, challenges their brains and differs from other sports because it does not rely on athletic prowess or the ability to buy the best equipment.
"Other games dictate to you," said Kevin Wills, who like Helfeld is at the meet-up hunting for a regular game to join. "With poker, you can control the game, by either bluffing, being overly aggressive or passive."
Some big Hollywood names are smitten, too, and not all are playing for charity on the Bravo cable channel's Celebrity Poker Showdown. Ben Affleck won $360,000 in a recent tournament in Sacramento. Mimi Rogers plays often, as do Lou Diamond Phillips and James Woods. Even non-players are finding the televised events compelling, with players placing bets that can be worth hundreds of thousands of dollars.
"Poker is like a modern Greek tragedy," said Steve Lipscomb, chief executive of World Poker Tour Enterprises Inc., who pioneered the way poker is watched in the United States. "It reveals the human condition as well or better than anything else you'll find. You get the greatest highs and the lowest lows. That's the juice."
But it is the growth of poker as a business that is breathtaking to people in the gaming industry.
Cable TV viewer ratings for the "World Poker Tour" on the Travel Channel and the World Series of Poker on ESPN have been so strong that four poker-related shows are in development, although there is no guarantee that all will be aired.
Tournament entrants surge
The success of television and online poker has translated into a surge of entrants in tournaments, including the top tier events. First prize in this year's World Series of Poker, which took place in May and is now airing on television, doubled to $5 million from $2.5 million last year because of the increase in participants. The top tournament prize of "World Poker Tour" jumped to $2.7 million from $1 million.
When NBC broadcast a special "World Poker Tour" battle of champions opposite the pre-game show of this year's Super Bowl, an estimated 10 million people watched.
Poker had long been a late-night cable TV offering, but drew few viewers until three years ago when Lipscomb produced a documentary film on poker.
Lipscomb realized that watching on television was unsatisfying because viewers rarely saw the players' cards. In the most popular tournament game, Texas Hold 'em, every player has two cards that are dealt face down and are rarely revealed unless there is a showdown with another player at the end of the betting rounds.
Lipscomb, borrowing from a British TV program, developed the idea of putting cameras in the rim of the table to show the "hole cards" when each player looks at them. Viewers at home could then see what cards the players had and strategize along with them throughout the rounds of betting.
Lipscomb took the camera idea, and the notion of a more heavily edited, faster-paced and stylized program, to various cable TV outlets. The Travel Channel bit, and the "World Poker Tour" series was born.
"All of a sudden, poker became a cross between a game show and a reality show," said Dan Goldman, vice president of marketing for Pokerstars.com, an online poker site. "It revealed strategies. People started saying, 'I could do this, too.' " Although ESPN copied the camera idea and now televises the more well-known World Series of Poker, "World Poker Tour" Enterprises Inc. is growing rapidly, with tournaments in exotic locations and on cruise ships that have million-dollar prize pools. Last month, the company began selling shares of stock to the public, trading on the Nasdaq, and it has filed for a patent for its method of showing hole cards and odds for each hand.
Real money or play money
Thanks to sophisticated computer software and increasingly prevalent high-speed online connections, some of the biggest poker money is being made by companies hosting tables online.
In a recent 24-hour period, about $124 million was wagered in more than 100 online poker rooms, according to PokerPulse.com, a Canadian company that tracks the industry.
At peak playing times, the largest site, www.partypoker.com, has had more than 50,000 people playing at more than 5,000 tables.
Dennis Boyko, who runs PokerPulse, said that last month online sites were pulling in $3.2 million a day through "rakes," which are small portions of every hand played, depending on how much is being bet.
That number is up from $300,000 per day in January 2003.
All of the sites are based offshore, because of U.S. gambling laws, and nearly all are privately held, making it hard to pin down their profits.
An exception is PokerRoom.com, which operates as a public company in Sweden.
Chief executive Patrick Selin said that last year, the company reported profit of nearly $4 million on income of $16 million.
"This year it will be much, much, much, much more," Selin said. "You have to pinch yourself to make sure you are awake."
The largest site, www.partypoker.com, is estimated to be making $100 million to $200 million in profit a year.
Gibraltar-based Partypoker.com has more than 1 million registered users, said the company's general manager, Vikrant Bhargava. As with all of the larger poker sites, most players are U.S. residents, and can play for either real money or play money.
Shuffle and deal
Online gaming executives say they would welcome legalization of their industry, with regulation and taxation so that they could operate more freely.
Citing the possibility of online poker rooms being used for money laundering, the Justice Department has pressured credit card companies to refuse to let players conduct transactions with the sites using credit cards.
Instead, U.S. players must use services that deduct or add funds to their checking accounts.
The Justice Department has told publications, Web sites and other media outlets that they cannot accept advertising from online gambling firms. One site is challenging the ban in a lawsuit in New Orleans.
So far, nothing has slowed the online poker juggernaut, which is transforming the tournament landscape that had long been the province of a relatively small circuit of professionals.
Last year, the World Series was won by the aptly named Chris Moneymaker, a Tennessee accountant who had honed his skills and qualified for the series by winning an online tournament. Moneymaker, an unknown in poker circles, became an overnight media sensation.
Online poker is minting a whole breed of young, aggressive players who are taking the sport by storm in part because they can gain experience quickly. Poker online moves fast, with time restrictions for considering bets.
With no waiting for a human to shuffle and deal, people often play more than 30 hands in an hour. Some play at multiple tables, using extra-large or dual computer monitors.
"In the 1990s, it would have taken you 20 years to get the amount of experience that it takes in a year now," said Annie Duke, who has been tutoring Affleck and is regarded by many as the top female professional in the game.
And those players can get a chance to do what is impossible in almost any other sport: Start from nowhere and be able to challenge the best in the game.
"How many people wouldn't love to go one-on-one with Michael Jordan?" said Daniel Negreanu, 30, a top professional who moved from Toronto to Las Vegas in his early 20s to pursue a poker career. "Poker offers people of all sizes and ages the chance to be a superstar."
But that kind of talk alarms those who deal with gambling addition.
Responsible gaming
"We think the problem is accelerating," said Keith S. Whyte, executive director of the National Council on Problem Gambling. Whyte said the council had a 15 percent increase in the number of calls to its hotline last year, and is expecting similar numbers this year. "It's the glamorization of this on TV and the easy availability online."
Whyte said online poker is especially worrisome because it can be played by minors, is solitary and available all the time, which can invite addictive behavior and devastating losses.
"Virtual money . . . is easier to spend and easier to get away from you," he said.
Whyte would like to see online gambling sites provide for more responsible gaming, such as imposing loss limits on players and prominently displaying addiction hotline numbers.
Some online sites train their staffs to watch for signs of excessive, addictive betting patterns. ESPN has run some public-service ads warning of problem gambling, and Whyte said he has urged "World Poker Tour" to do the same.
A spokesman for Discovery Communications, which owns the Travel Channel, said such ads will be aired next spring during its next championship broadcasts.
Some professionals worry that poker is in danger of media over-saturation. So far, there is no sign of that.
Shabbir Safdar of Cleveland Park keeps an online blog, or Web diary, of his gambling, posting his profits and losses. For the year, he is down more than $700, but he writes that his interest in continuing remains strong.
"I've set aside $300 as a stake to enter $10 tournaments all [this] month," he writes. "My math suggests that this should be enough to protect me from the swings unless I have a statistically improbable bad run."
Ann Marchand of washingtonpost.com contributed to this report.
