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The State of Poker 2008

10/8/2008

These are strange days for the poker industry. While the dilettantes have gone on to the next fad -- mixed martial arts, perhaps -- the diehards and the newfound converts are settling in for the long haul.

We're past the "fad" stage with poker now. Unlike, say, grunge music or brick-wall comedy clubs, poker isn't going anywhere. Tens of thousands of players still make their way to Vegas every summer for the World Series of Poker. The highest-profile poker TV shows continue to draw solid ratings even as they approach a decade on the air. Online poker traffic shows no signs of slowing.

But by the same token, the boom is over. Poker isn't ubiquitous on television anymore. WSOP numbers, while still strong, are sharply down from 2006 levels. Tournament pots are smaller as a result of reduced entry numbers. The Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006 continues to make online poker a hassle for gamers while keeping needed tax revenue out of government coffers.

So as the bright lights of the mid-00s start to fade in the rearview mirror, where does poker stand right now as an industry? BLUFF Magazine spoke to many of the industry's most influential figures from all corners of the game to get a sense of the major issues confronting poker today and those that will surface in the coming years. And for poker aficionados, it's definitely a rainbow hand. The industry's not holding the nuts, but fortunately, it's not drawing dead yet either.

UIGEA

With the exception of Chris Moneymaker's WSOP main event win in 2003, no event in the last decade has had a greater impact on the poker industry than the passing of the Unlawful Internet Gaming Enforcement Act. Approved in the fall of 2006 as a tuck-in to a major port security bill, the UIGEA was a gut shot right at the moment poker was enjoying its greatest success.

The Poker Players Alliance, the industry's lobbying arm, has tried to meet the UIGEA head-on, pushing for legislation in Congress that would specifically designate poker as a game of skill and, in turn, provide for the taxation of poker to legitimize it. In addition to its lobbying efforts, the PPA has begun a voter registration drive (www.poker2008.org) to get poker players involved in local government action. The PPA has also developed a litigation support network with more than 80 attorneys across the country available to assist poker players in legal trouble.

"We can't sit idly by while our rights are trampled on," said John Pappas, executive director of the PPA. "We won't be able to overturn [UIGEA] in a day. But if poker players become part of the process, we can help shape the direction of legislation."

Thing is, the UIGEA is having little impact on online poker play as it currently stands. Online casinos are as full as they've ever been -- keep an eye on the "players currently online" stat at your favorite online stop -- and traffic continues to increase. Players get online and either win money without paying taxes or lose money to offshore corporations and the U.S. government never sees a penny of it.

Where the UIGEA is having its greatest effect is on the casual player. While it's relatively easy for established players to negotiate the maze of financing options and get money into an online account, newbies have almost no idea where to start. And with the implied threat of Big Brother looking over their shoulder, many may simply choose not to take the plunge -- which, of course, is exactly what Congress intended.

"I would love to see the day when getting online to play a hand of poker is as easy as going to Amazon to buy a book, or to eBay to bid on something," said Lee Jones, poker author and chief operating officer of Cardrunners.com. "But it makes too much sense."

Privately, some connected individuals in the poker industry have complained that the PPA was caught flat-footed by the UIGEA and is still not doing enough to advance the needs of poker players. However, all sides can agree on the importance of the PPA's ultimate aims -- to legitimize online poker and provide a new stream of tax revenue for cash-strapped governments.

"Governments are leaving millions, billions of dollars on the table," Jones said. "Any politician who can figure out how to tap into this revenue source is going to be a hero from all sides."

"It's not a matter of 'if' we'll get rid of the UIGEA; it's a matter of when," Pappas says. "I give our chances in 2009 better than 50 percent. Once we start getting members of Congress comfortable with the idea of online poker, we'll be in much better shape."

Globalism

Imagine a nation where poker players toss around cards and chips in basements or local watering holes, getting their fix one weekend at a time. It's a diversion for many, an obsession for some, and a career for a very few. Suddenly, though, poker breaks large, going national and showing up on TVs, computer screens, and magazine stands. Poker is everywhere, and the clicking of chips is drowned out only by the ka-ching of money in circulation.

So are we talking about the U.S. in 2003? Absolutely. And we're also talking about two dozen other countries in 2008.

Like with "Baywatch" and burgers, the rest of the world is waking up to what we knew a long time ago: Poker has universal appeal, and when delivered in a slick package it's almost irresistible.

Television show producers and tournament directors, frustrated with flatlining or declining ratings and attendance in the United States, have turned their eyes to international realms. The Pacific Rim and Southeast Asia, in particular, are tempting markets, with virtually limitless growth potential. And with fewer online restrictions than in the U.S. and other nations, growing markets are also ripe for online casinos.

"I've laughed for years that 'The poker fad is over'," says Steve Lipscomb, founder and CEO of the World Poker Tour. "The U.S. market is in the early stages of maturing, but the poker phenomenon is booming all over the world." Lipscomb points to locations such as Canada, France, and Scandinavia as hot markets.

"It's like the old game Risk," Lipscomb says. "Remember that? You claim North America, you can go anywhere from there. Poker has claimed North America, and now it's time to spread out from that base."

Last year's main event final table had a decidedly international feel, with six countries represented among the nine seats. Expect that kind of diversity to become the norm in the future.

World Series of Poker

Everyone in the poker world knows about the WSOP's rise in popularity, with the main event ballooning from 830 players in 2003 to 8,773 in 2006. Everyone's also painfully aware of how the UIGEA and other factors combined to knock 2,300 off the tournament total in 2007. Any time an event suffers a 33 percent drop in a single year, there's reason to be concerned.

Understanding that they were at a crisis point, WSOP's planners came up with a novel solution: delay final-table play for several extra months. Such a move would seem to be counterintuitive -- why let the momentum of all the previous six weeks dissipate?

But viewed from another perspective, it's an intriguing idea indeed. "You get an extra hundred days to promote each one of these nine guys," says James Sullivan, executive vice president of the poker agency Poker Royalty. "In the past, the eight guys who lost, they were gone after the tournament. And even the winner, if he came from out of nowhere, people couldn't get a handle on him. Now, though, we've got all this time to learn the stories behind each of these nine guys. Who knows what we'll find out about them? Maybe the most interesting story won't even be from the winner, it'll be from one of the other guys."

Television Ratings

Quick, what do these shows have in common: "The Sopranos," "The Wire," "The West Wing." Give up? All three were legendary, and yet none of them made it past their seventh season. Even the best TV show has a shelf life. Even the most popular ones start shedding viewers once they pass five or so seasons on the air.

This makes what the World Poker Tour has done so impressive. The WPT's televised chronicle, now in its seventh season, continues on strong in the face of competition from every stop on the television dial.

"World Poker Tour is still something people want to watch," Lipscomb said. "Think about how hard it is to get a show on the air, and how few shows that are on the air are actually renewed. And we're heading into our seventh season in 2008-09. We continue to be on to something here."

The problem, of course, is poker overload. There are only so many ways you can show a table of players fidgeting with their cards and tossing their chips. Television producers have tried everything short of prison-rodeo poker -- where four prisoners sit on chairs playing poker with a rampaging bull running around and the last one knocked out of his chair is the winner … but don't think that hasn't been pitched at some point.

Combine that with the fact that many "poker shows" are basically infomercials for online gaming sites, and you can see why many casual viewers simply move on to something else. Without a compelling reason to keep viewing, you don't really care whether Player X's pair of queens holds up against Player Y's big slick.

"There's product wear-out," said poker author and agent Oliver Tse. "Every TV show goes through this -- "Dancing with the Stars," "American Idol." If the producers don't change anything, the ratings are going to slide. A lot of people's careers are on the line here; if these television shows don't get aligned with their viewers, everybody is in trouble."

While acknowledging that the World Poker Tour is taking steps to improve the product, Lipscomb takes a more optimistic view.

"These things roll in cycles," he said. "Look at golf. Nobody outside of golf fans was watching golf until Tiger Woods came along. Then everybody had to watch golf. The NBA, same thing until Magic and Bird and Michael Jordan came along. We need to find our next MJ, our next Tiger to take us to that next level."

Public Perception

It wasn't that long ago that Doyle Brunson and others wouldn't even admit to folks that they were professional poker players, so seedy was the profession. Even though poker's gone mainstream, it still hasn't been completely legitimized in the eyes of Mr. and Mrs. Middle America. And the UIGEA may have done more damage to poker's public perception than to its operations. If the only time the words "poker" or "online poker" came on to your radar is in connection with legislation restricting their access, what's your perception of the game going to be?

As a result, advertisers -- the true barometers of mass-market acceptance -- continue to largely steer clear of poker players as product pitchmen. Certainly, there's no de facto ban on poker players in commercials -- Daniel Negreanu and Diet Pepsi have had a good thing going on, and Phil Hellmuth and Milwaukee's Best have an ongoing ad campaign. But we're not yet at the point where a poker player is hawking the kind of big-ticket accounts -- McDonald's, Coke, Chevrolet, Budweiser -- that give poker and its players an implicit mainstream legitimacy.

"It's the FUD factor -- Fear, Uncertainty, Doubt," Jones says. "People fear what they don't understand, and there are still quite a few people who don't understand poker. They still think that it's some seedy back-alley game, and until we can change that perception, we're going to have an uphill battle."

New Players

How is poker like a cell phone? Like this: Do you know anybody that doesn't have a cell phone (your grandmother and your little niece not included)? Exactly. Phones are so cheap, so pervasive, that pretty much anybody who wants one can get one. Likewise, poker has blown up so big, so wide that anybody who's wanted to play poker in the last five years has had the chance to do so, either online, in a casino, or in a local neighborhood game.

So when you've completely saturated your audience, that's a big problem, right? Not exactly. The poker audience is always growing. Jones calls this the "September Effect," a term borrowed from computer science. It refers to the time when a whole horde of new users come online every September when college starts up. Every year, a new crop of millions of potential players gets introduced to the game in dorm rooms and frat houses across the country. And while some will play, get fleeced, and move on, many will stick with the game for a lifetime.

The year 2008 is a good indicator of the challenges that face the poker industry. As long as there's a deck of cards and money to be made, poker as a game will never die. But poker as an industry? That's a lot more tenuous. Poker's best bet is to shoot for legitimacy in the eyes of the everyday public. Going for the level of public acceptance that, say, golf has achieved may be a bit much to ask, but perhaps poker should aspire to reach a level comparable to video games. Once derided as a children's medium, video games are now a completely legitimate -- indeed, essential -- part of the mass media mix. If poker can reach the same kind of public acceptance, and if Congress can listen to the polls that support poker, then the industry's dip from 2006 to 2008 will only be a minor valley in a very long ascent.

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