PokerTek Poker Pro tables: The inside scoop WHY

[*TT*]

i just spoke with a trusted adviser in the industry, who explained to me the fiscal realities of the PokerTek Poker Pro ePoker tables.

First off I'd like to remind everyone that I firmly believe there is a place for these new machines in select casino applications.

<ul type="square">[*]Municipalities where live card games are illegal, but video Blackjack and similar games are legal.[*]Casino boats, and other remote locations where staff will always be hard to find[*]Casinos that do not have the resources available to build a poker room[*]existing Vegas casinos with small poker rooms and low traffic, looking to crossgrade (this may be accurate in the future, at this point as you will see below its probably not the wisest choice for this application)[*]Temprary tables for satelites during a large tournament where staffing would be lost at the expense of cash game revenue (this includes the WSOP IMHO, they have had a problem staffing cash games until tournament tables start breaking down)[/list]
PokerTek's Poker Pro tables lease for $160/day, $58,400/year. At this point Poker Pro tables cannot be bought. This is similar to Shufflemaster's policy a few years ago (casinos no longer have to lease their Shufflemaster machines). Lets assume the dealer costs $10/hour for an average 10 hours/day - $100/day in dealer costs + taxes and insurance package - lets assume its $115/day. So yes at face value it appears that Poker Tek's Poker Pro tables are more expensive to operate per day than a live table using the equivalent space.

HOWEVER eTables don't have the inherent slowdown of dealers or (we assume) the potential mistakes. Calls to the floor will also be greatly minimized, therefore we can estimate 45 hands per hour rather than the standard 35 hands/hour commonly found with live dealers. Thats a theoretical $40/hour in revenue per table added per 10 hour session (assuming its a raked game), or $400/day - $146,000/year of found money that is left on the table when using a dealer. This equates to $340/day in ROI, or $124,100/year.

There are of course downsides. For example it will be harder to maintain the game at an eTable, and unused tables result in fixed expenses where as unused live tables are essentially just underperforming assets.

In short, from this basic analysis we can conclude its in the best interest of some casinos to consider using PokerPro ePoker tables from PokerTek provided it doesn't alienate it's existing base of customers. In my opinion they should only be used as temporary rentals for satellites where the vig is large enough to pay for it's rental in one game, or in casinos that do not have a viable poker room operation already in place.

Lets face it - this is the future whether we like it or not, many casinos to make the switch within the next few years once the price drops or a sale of the unit is lowered to 100,00 or so rather than the current leasing strategy.

[steamboatin]

I bet Harrah's in Cherokee NC will or already has them. No live card games in NC unless it has recently changed.

[Bulbarainey]

I played on these things at HP and i liked the speed of the action, the problem was no HP regulars were playing in the games, it was all 2+2'er types. I think these things will do much better in situations like you mentioned, where no alternative live dealers are available. I also don't think it would be a bad idea to throw one of these things in the middle of a casino floor, where other pit/slot games are going, i think it would attract attention

[allbad]

I think it would be in PokerTek's best interest to give these things away in some venues. Let's look at the numbers:

The lifespan on computer equipment like this can be expected to be at least 2 years with *some* maintenance involved. Lets say it costs $30,000 to build one ($5K for a nice table, $15K for screens and processing unit, $10K 2 years maintenance fixing screens &amp; cosmetics).

Lets also say a poker table in the corner of a bar gets patrons playing an average of 7 hours/day. If we see 45 hand/hour with an average rake of $1/hand at low limit, that's about an average of $315/day which is around $100K/year (after subtracting the cost of hardware + maintenance).

Every one of these machines is an ATM for PokerTek and the bar (who should be negotiating another $1-2/hand + all the extra patrons)

The obvious question of "what about the development and marketing costs involved?" With each new unit sold the per unit cost of this goes down. If they get one of these machines in every little corner of the country, that's a lot of machines.

You know... up until I wrote this post I hated these tables with a passion. Now, I might look into selling these things.

[TommyTutone]

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I bet Harrah's in Cherokee NC will or already has them. No live card games in NC unless it has recently changed.

[/ QUOTE ]

I was there for my first time last weekend. No poker yet, although they have the aforementioned video blackjack as well as video Let it Ride and video 3-card poker.

[DRRPoker]

Poker, specifically, is illegal in NC, not just gaming. An exception was granted for Cherokee. Harrah's at Cherokee has applied to the state to permit them to us PokerTek, but so far its been denied. PokerTek is based in Charlotte, however, and I think at some point it gets approved.

[Dennisa]

My argument for these machines is to just run them for SNG. I spoke to Jay at HP and gave him this suggestion.

2 100+9's per day hit break even according to your info TT. The avg sng is about 45 minutes. In reality you could run 24+6s and 51+9's all day without any breaks. When action is heads up, move them to the heads up table and start a new one.

[allbad]

[ QUOTE ]
When action is heads up, move them to the heads up table and start a new one.

[/ QUOTE ]

Which makes me wonder why they make them 10-person "tables" to begin with. why not just put up a bunch of kiosks and you go to a lobby screen where you select your table. When your tourney is up, or you get sick of 3/6 limit and want to move to NL you just push a button instead of getting out of the seat. The real estate footprint and action then becomes equivalent to the rest of the slot machines and no more "we have to take slots out for poker tables? oh noes!!!1" This opens the door to linking your kiosks with your other B&amp;M locations so you can find a table even if you're alone in the casino. Hey... did I just invent online gambling?

[jafeather]

[ QUOTE ]
[ QUOTE ]
When action is heads up, move them to the heads up table and start a new one.

[/ QUOTE ]

Which makes me wonder why they make them 10-person "tables" to begin with. why not just put up a bunch of kiosks and you go to a lobby screen where you select your table. When your tourney is up, or you get sick of 3/6 limit and want to move to NL you just push a button instead of getting out of the seat. The real estate footprint and action then becomes equivalent to the rest of the slot machines and no more "we have to take slots out for poker tables? oh noes!!!1" This opens the door to linking your kiosks with your other B&amp;M locations so you can find a table even if you're alone in the casino. Hey... did I just invent online gambling?

[/ QUOTE ]

If this path was taken, would it then be possible for the software to allow multi-tabling with other players within the casino? If so, of course, the EV for casinos using these machines goes through the roof.

[Rick Nebiolo]

[ QUOTE ]
My argument for these machines is to just run them for SNG. I spoke to Jay at HP and gave him this suggestion.

2 100+9's per day hit break even according to your info TT. The avg sng is about 45 minutes. In reality you could run 24+6s and 51+9's all day without any breaks. When action is heads up, move them to the heads up table and start a new one.

[/ QUOTE ]

SNGs are a hard sell in a casino. Hawaiian Gardens is the top SNG card room in LA yet they really have to press to get about a dozen from 2:00pm to 10:00pm four times a week. As a player you tend to have to much sit (ie. wait for enough players to sign up) and not enough go (i.e., continuous play as you would online).

I also think they are among the worse possible utilization for these tables. Per TT's OP:

"PokerTek's Poker Pro tables lease for $160/day, $58,400/year. At this point Poker Pro tables cannot be bought."

In a typical casino or card room SNG setup you will have very little utilization of the eTables, exactly the opposite of what you would want if you were trying to establish a mix of both types of games. It seems the eTables are the ones you want utilized the most since the cost doesn't increase much with usage over a given day (except for wear and tear).

That said, a good spot for eTables (as mentioned by TT elsewhere in either this or the other thread) might be at the WSOP single table satellite area were you have huge demand for satellites and more knowledgeable players (who will spread the word if they have a positive experience).

In any event the ePoker people (and their casino partners) need to understand their product will fail unless they get both the electronic element and the cardroom element running smoothly.

~ Rick