The online poker industry fuels the live poker industry

100billion-hand_orig_full_sidebarIn this column I’ll explain why the editorial boards railing against online poker and poker’s recent legislative gains have it all wrong.

One of the key complaints that everyone not named Sheldon Adelson is making is the likelihood of online poker cannibalizing the live poker industry, which as the data shows –and as any poker player knows– is utter hogwash. Apparently their earlier message of “won’t anyone think about the children?” has fallen on deaf ears so now we’ve moved on from the morality of it all to its detrimental effects on other forms a gambling.

But this argument makes zero sense.

What they are failing to realize is that the biggest boom in live poker (cash games and tournaments) occurred when more US players were participating in online poker games than in any time in history. And since the US government’s systematic crackdown on online poker, limiting US players’ access to online sites, the live poker industry has taken just as much of a hit as the online industry. It doesn’t take much reasoning to see that the two industries are linked, but not in the way opponents of online poker would have you think.

So while it would seem logical that an increase in online poker would pull customers away from live poker tables this is not, and has never been the case.

And keep in mind that normally I’m very cautious when applying correlation to causation, but this one seems like a no-brainer: The more robust the online poker industry is, the more robust the live poker industry is.

The Evidence

Before online poker came into being, casinos were very busy dismantling their poker rooms in favor of added slot machine and table game space. Poker was on the way out –at least in terms of a moneymaker for casinos—and casino goers were simply strolling by the poker rooms.

But that was all about to change. The resurgence and renewed love affair with poker started even before Moneymaker’s 2003 WSOP victory, and pretty much coinciding with the onset of online poker in 1998 and the release of Rounders that same year, but it wasn’t until the 2003 WSOP and the hole-card camera that poker really took off.

During the heyday of the Poker Boom from 2003 through 2006 –spurred on by new players getting into the game via online poker rooms—US players were flocking to live poker rooms in record numbers. If the current argument –that online poker will take away from live poker—is true, then casino poker rooms should have been ghost towns during this period, and the exact opposite was the case.

Not to mention that during the prime years of US online poker suddenly every casino was busy reopening or updating their poker rooms, hosting live tournaments, and using poker as a main attractant for customers.

Evidence in Europe

The same holds true in European markets where online poker has been systematically legalized and regulated over the past decade.

Take France for example. Since the Euro poker boom, and the country’s subsequent legalizing and regulating of online poker the country has seen the number of major tournaments that stop within its borders grow from a single stop on the WPT – the WPT Grand Prix de Paris– to multiple WPT and EPT tournaments, not to mention the hosting of the World Series of Poker Europe for the past three years and the now-disbanded Partouche Poker Tour. And this was the case across Europe.

At the same time France, Spain, Italy, Portugal, and Germany saw their live poker offerings grow from virtually non-existent to a thriving player pool. And this expansion occurred at the same time that online poker’s popularity increased.

I witnessed this firsthand when I visited and lived in Berlin off and on from 2003-2006. Upon my first arrival there was a single poker table at the Spielbank Casino, and that game was a high-stakes POT-LIMIT Seven-Card-Stud game! Now this same casino has a dedicated poker room, and is just one of many German casinos offering poker to their patrons.

Where is this argument coming from?

First, this could very well be little more than a coordinated effort by gambling’s opponents. The editorials are being penned by nameless editorial boards with little in the way of attribution or stone-cold data, and there is little reason to believe that Adelson money or even gambling’s more venerable foes like Focus on the Family are not behind them.

Furthermore, anecdotal evidence and perceptions are very powerful factors in the formation of opinions, and can often have more of an impact on people’s beliefs than scientific data and numbers.

Logically, it just seems like an increase in online poker use should cannibalize live poker games, after all there are only so many players right? So when someone anecdotally announces this, or makes a generalized statement people will tend to believe it, since it sounds right.

What WILL actually happen as online poker spreads across the US

What you will actually see as online poker proliferates across the US is an increase (yes an increase) in the number of people heading to live poker rooms. Notice I didn’t say “what you can expect to see” or “what I expect to happen,” I’m very, very confident that online poker will lead to an increase in live poker.

People do not go to live poker rooms to learn the game (they do this online and in home games); the people frequenting casinos are already versed in the game and looking for a new outlet to play poker.

Most casual and semi-serious poker practitioners consider live poker to be the “Big Leagues”, with online poker being the minor leagues. Online poker is played because the stakes are much smaller and also for convenience, but what these players really want to do is head to the casino and “play for real.”

*Online poker pros do not feel this way about live poker’s superiority to online poker, nor should they, but the average person participating in $25 and $50 online games views the chance to play live poker like a reward; akin to going to an expensive restaurant on your birthday or anniversary.*

The people in a live poker room are for the most part online players, so the more online players there are the more players you will see heading to live poker rooms. As online poker continues to become more readily available you can bet your bottom dollar that attendance at live poker rooms will increase as well.

 

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