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Sexton vs. Stewart Debate Underscores Poker’s Need For Growth

by Various Authors |  Published: Mar 13, '15

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Splash The Pot is an ongoing series of op-eds from various members of the poker community. For more information or to submit your own writing, send an email to editor@cardplayer.com.

By: Brian Pempus

Two of poker’s most prominent public figures recently took to the Internet to talk about some key components of the annual World Series of Poker in Las Vegas. Bracelet winner and World Poker Tour commentator Mike Sexton went to his blog to “call out” the richest poker tournament series in the world, and WSOP Executive Director Ty Stewart found it necessary to respond at length to Sexton’s concerns.

But how significant was this exchange and what does it really mean for the game of poker?

Those questions are not to diminish the specific points made by Sexton or Stewart, or anyone who has ever expressed concern with the details of how the WSOP is run every summer. It is rather an attempt to step further back and contextualize the debate within poker’s current economic period. Public confrontations such as the one between Sexton and Stewart, which, in Stewart’s words, “struck an emotional chord,” are significant in that they underscore the problem of a stagnating poker economy. Friction will continue between the core group of grinders, mostly professionals and semi-professionals, and the likes of the WSOP if growth in the industry at large is not eventually realized.

Just to highlight a few indicators of poker’s recent economic struggles: Nevada’s live poker offerings continue to shrink; just three U.S. states have online poker and revenues have been lower than originally projected; California, projected to be the most lucrative online poker state, could be years away from legalizing it; and despite regulated U.S. online poker’s infancy, two once existing regulated poker sites already have closed.

Also: According to the most recent research from the American Gaming Association, the number of stand-alone poker rooms in the United States fell from 713 in 2006 to 493 by 2013. There is no doubt that there is less poker available these days than there once was.

Meanwhile, the WSOP itself continues to break its own attendance and prize pool records, surely thanks in large part to the skill and creativity of its planners. It’s the predominant tournament series on the planet, and it has been successful in keeping its position. The WSOP is still growing—with a record 68 bracelet events this upcoming summer—but in a period when poker overall is struggling. It’s a strange situation, and probably is the underlying reason why poker players often want the WSOP modified.

It remains to be proven that it’s possible to come to some sort of multi-faceted compromise—on how exactly the WSOP should be run—that doesn’t vanish quickly unless there’s another period of real growth in the poker industry.

The WSOP says it also cares about long-term benefits, which of course is true, but this logic hits its limits when you factor in the needs of the players who have to worry about their individual bankrolls and finances in a more concrete time frame, while simultaneously promoting the game itself to ensure its more abstract long-term health. Players who care about growing their bankrolls matter from a marketing perspective because players who win prove the game is skill-based, which is vital in distinguishing a poker tournament from a lottery. Both the WSOP and the poker playing community as a whole need to have their bankrolls grow over time. If either contract, there’s crisis in the game of poker and eruptions of discontent emerge, like we have seen over and over again, whether on social media, forums or blogs. This is not to suggest the WSOP sucks so much out of the poker economy that players can’t remain in the game. Sexton’s WPT has been dealing with some of these issues too, as many reconsider how often the re-entry format should be used and what kind of long-term impact it will have. Like the WSOP, the WPT has been expanding into other countries, trying to get more millage out of the word “world.” It’s not quite an arms race between the two tours, but there is competition.

Poker, especially online, is hugely affected by the regulatory policies of States around the world, which have been dealing with the aftermath of the global economic crisis that reached its fullest expression in or around 2008. It’s not a coincidence that poker began declining around this time. Though it goes beyond the scope of this article, it’s worth saying that no country is anti-online poker intrinsically. We could be in an era of deglobalization, sparked by the economic crisis, in which countries take steps to isolate themselves in some ways; and no one wants citizens in their country to be spending money that can’t be taxed and used as a source of domestic economic growth. In this light, something even remotely close to a global regulated online poker network seems impossible in the current political economic climate we live in. Another poker boom seems unlikely right now, but that doesn’t mean there can’t be steady growth in the meantime, especially in the United States, which could have an online gaming industry worth $5.2 billion by 2020, if more states jump on board with the industry.

The key issue that seems to remain is how the U.S.-centered poker industry can be fine-tuned in the meantime in ways that make growth more likely. Can this be accomplished in public online debates? The WSOP is at poker’s galactic center, but how much gravity does it really exert? Sexton and Stewart going back and forth is valuable, but no matter what changes are made to the WSOP—even to something as significant as how, when and where the main event final table is played—we’re probably not looking at a game changer. The implication here is the argument that no matter how successful the WSOP is, it will likely have a negligible impact on state governments legalizing online poker. As mentioned, the WSOP is as successful as ever, but regulated online poker still may get banned nationwide.

Assuming American discretionary spending would permit it, the United States needs a robust online poker industry, with many states involved and sharing liquidity, in order for something resembling a boom to occur again. If that happens, everyone in poker wins—the players, the WSOP, and many other businesses involved in the industry. Arguably most important for poker players is sponsorship—getting paid to wear a patch while playing. After poker became more popular around a decade ago, the skill level of the average poker player eventually skyrocketed, making sponsorship an invaluable supplemental, or even primary, income. But that money went away as the game’s TV presence was scaled back. In North America, roughly 75 percent of poker shows that aired in the past decade are no longer on the air, simultaneously both a consequence and cause of poker’s economic woes.

This is not to suggest that people and organizations in poker aren’t already working tremendously hard to advocate for poker in government settings, even if efforts sometimes seem futile. It is worthwhile to try to put eruptions of tension between players and the WSOP in a more elucidated context, especially as we move forward.

Brian Pempus is Card Player’s Online Content Manager and has been covering the WSOP since 2009. His database of articles can be found here.

Splash The Pot is an ongoing series of op-eds from various members of the poker community. For more information or to submit your own writing, send an email to editor@cardplayer.com.

 
Any views or opinions expressed in this blog are solely those of the author and do not necessarily represent those of the ownership or management of CardPlayer.com.
 

Comments

BobMatherPoker
over 5 years ago

One of the great debates circulating the poker tables, blogs and executive offices across the nation is the discussion regarding poker profitability for corporations and increasing the number of players in the game (and their bankrolls).

In March cardplayer magazine wrote several articles (http://www.cardplayer.com/poker-blogs/92-splash-the-pot-op-eds-on-the-poker-industry/entries/562022-sexton-vs-stewart-debate-underscores-poker-s-need-for-growth) regarding this issue with comments from Mike Sexton and Ty Stewart. In the article they discussed the almost 50% reduction in poker rooms in United States since 2006 as well as the demise of several online gaming platforms in Nevada.

As an amateur poker player and a professional CEO and consultant it is easy to see all sides of the situation. To put it in simple problem/solution terms:

Problem: Reduction in customer & revenue from poker for stakeholders/investors
Solution: Modify a few aspects of tournament poker

Currently poker tournaments result in approximately 90% of the entrants losing money. Many tournaments do not allow re-entry ( a chance to leave the event a winner perhaps) For many this loss equates to a substantial part of their bankroll. For others it is just an emotional or ego debilitating activity that frequently repeats itself.

Regardless of the skill level or what industry you are in, when 90% of the customers you have leave a loser ( at least financially) you have a recipe for a reduction in participation and profitability.

On the Casino/business side 90% loss rate in a tournament can perhaps be seen as a good thing as inferred by Matt Savage in a recent article.
Savage explained his opinion on the reduction of re-entries in tournaments. Simply put less money spent in tournaments equals more money spent in cash games which equals and higher profitability for the host casino. No surprises there.

In my honest opinion I believe that compromise on both the player and the casinos side can result in higher participation in both tournaments as well as cash games.

increase the number of winners to 80% to gain the following benefits:
More people will share their win with friends and players elevating awareness of the event and poker
Potential cash game winners players with a new tournament bankroll increases by 10%
Augment the top tier awards with prizes/packages from sponsors.
Trips, casino stays, tourney entries, diamond/platinum cards, front page articles and a ton of other sponsor opportunities. In golf you may win a car, its not too far fetched to think the same in our million dollar guarantee events or higher.
Give away future tournament packages.
every tournament should have 10-15 players in it that were awarded seats as either a sponsor exemption or an award for top tier placement in a event.
Every player should be aware that these are given as promotional seat to build sponsorship and awareness. So if a tourney has 450 paid entries, perhaps 460 players will participate.

In closing, I believe that minor modifications to the poker industry “norms” will increase player enrollment, prize pool amounts as well as stakeholder profitability.

Hope you found this useful. Yell at me or give me kudos @bobmatherpoker on twitter or at the next tourney we play together in.

 
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BobMatherPoker
over 5 years ago

I meant 20% field paid.

 
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dare2
over 5 years ago

Online poker was, is and always will be too shady to succeed in the U.S.. No matter how good the poker technology becomes some hacker somewhere will figure out how to beat it. If they can hack the Department of Defense computers they can certainly hack a poker site. Black Friday was actually a good thing for non pro poker players. They were being fleeced in record numbers and never even knew it. Despite all the wailing & hand wringing about government interference the fears about cheating and Ponzi schemes turned out to be true.Pro's were far ahead of the internet game and with HUD's had an even greater advantage.They now dream of returning to the halcyon days of Fish in every game but the government will never let that happen.Nor should they.

 
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Becki
over 5 years ago

Hmm. I'm a social player. I like live games because they're social. I was a losing player on the internet. In three years, I lost somewhere in the neighborhood of $400 to $600. Total. While enjoying myself in my pajamas on a Tuesday night at home, playing half a dozen different tournament games. Sometimes I would play a fifty dollar, no-rake tournament with friends of approximately equal skill, where I was break even. I literally had never set foot in a casino my entire life.

Now, thanks to the government "saving me," I go to live casinos to play tournaments, and lose thousands of dollars a year to Assholes who berate me at the table. One tournament costs more than I lost in a year on line. Not to mention the cost of airfare, and hotel rooms, and vacation time. And generally, I'm stuck with hold'em, there's little variety except during the WSOP. Yes, I can see how Black Friday was "actually a good thing for the non pro"......

 
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