let's get the facts straight: poker makes money

[Al_Capone_Junior]

Excellent counterpoint. There is no doubt poker is a lot more work + haasle for less money. But it still aint going away. Good post.

[rbnn]

Great hotels have great swimming pools too, that cost huge amounts of money to build, staff and maintain. Yet those are free to use, at least for guests. Why don't they shut down the pool and use the space for slot machines?

What about the fountains at the Bellagio, or the waterwheel in the conservatory? I am sure the Bellagio could make more money on a balance sheet by shutting those down and putting in slot machines. Yet they don't, and, surprisingly, the Bellagio is very successful.

[AWLurch]

Years before the Moneymaker era poker was the loss-leader of the casino. Just as the local grocery store sells their milk at a loss to draw people in the doors the casinos would maintain the games and the poker rooms to draw players into the room in hopes that these players will gamble in the other more profitable areas. At the time the rake was required to get the casino closer to the break even point not to necessarily provide a profit.

This is where all of these "myths" were created, I believe they were also perpetuated in some books that I recall reading that were published before the Moneymaker era. Obviously people read this and without looking at the math or using common sense they still believe that poker is not <u>profitable.</u>

On the other hand, casino suits are required to maximize the profit of their casino for the long term. In doing so, the finite amount of space available on the casino floor must be properly used to gain the full expected value of each customer. Sure there is a ton of available space for poker rooms in the desert, but the question is, if the casino can make more in the more lucrative space, on the strip properties for example, the casino will do what it needs to do as far as removing poker rooms and replacing with slots. If the casino thought it would be profitable to build a poker room in the desert off the lucrative area of the strip I am sure some would have by now.

After Chris Moneymaker made poker popular poker became such a huge draw to the common espn watching poker fan, that may not have otherwise come to the casino. It is with this craze that we saw poker rooms being expanded to hopefully lure these potentially lucrative gamblers. Also with this craze brought more action, which allowed for more open games which generates more rake, allowing rooms to finally be profitable.

Now that the poker craze is seemingly slowing down, we are seeing rooms on and off the strip, that may not have been as popular, close or downsize. Some rooms are taking away tables that rarely are filled and replacing them with machines that may rarely be used, but stand alone on their own and do not require constant labor and supervision.

Also, as poker seems to slow down, the casinos are now viewing the poker players themselves as preventing the casino from fully maximizing on their expected value from its customers. Considering most winning poker pros tend to keep their money away from table games and slots, this money from other gamblers who lost it, that the casino originally attracted in in hopes to be wagered at other games, is no longer making it to the pits. If Player A, who was planning to play Blackjack, but wants to play poker first, loses all of his money at poker, the expected value that was possible to achieve, was not maximized. Granted the poker room was able to make money off of the rake generated by Player A, they were not able to maximize the full value of the action that Player A would normally give the casino.

For this reason, some smaller casinos, that may not make a ton of money off of poker, would be likely to remove it to make the space more profitable and to eliminate who they see as a competitor for the customers money.

Without a doubt, poker is now profitable, but the bottom line is that it is not the most profitable for the casino if the trend starts to taper off.

[John Kilduff]

[ QUOTE ]
Years before the Moneymaker era poker was the loss-leader of the casino. Just as the local grocery store sells their milk at a loss to draw people in the doors the casinos would maintain the games and the poker rooms to draw players into the room in hopes that these players will gamble in the other more profitable areas. At the time the rake was required to get the casino closer to the break even point not to necessarily provide a profit.



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Believe it or not, poker made money for the house back in those "ancient days" before the Chris Moneymaker era, too.

[Eder]

[ QUOTE ]
Great hotels have great swimming pools too, that cost huge amounts of money to build, staff and maintain. Yet those are free to use, at least for guests. Why don't they shut down the pool and use the space for slot machines?



[/ QUOTE ]

Becoz they charge like $7 for a 59 cent beer + tip to hostess and most allow no coolers at pool...cabana they charge $300+ for patch of concrete...burger at pool...dont even go there....

[nineinchal]

No one's saying poker rooms don't make money.

Its just that the casinos have the mentality that slots make the big money, so let's direct our efforts there.

I believe if gambling enterprises treat the poker players better they would have much higher revenues overall. I figure more players would bring their wives and girlfriends, and they would be exposed to gambling, just maybe would drop a few on slots, if only they would do better on room rates and comps for poker players.

[Moneyline]

I've played a few sessions of poker with the former manager of a small poker room that was in a more-or-less locals casino in Vegas. He claimed the room netted a little less than 500K a year in profit, and that was with less than 10 tables and a $3 max. rake.

There's no way that particular casino would have made more money if they replaced the poker room with slots and video poker, as there are at any time already dozens of unoccupied machines in the casino. Poker is clearly profitable and good for the financial health of casinos.

[RR]

There was a time not long ago that I worked in a poker room that was making a small profit. The casino decided to give up that small profit to replace it with empty space to get poker players out of their casino. The demographics have changed enough that casinos suits (for the most part anyway) aren't concerned about poker players scaring away their other guests.

Sometimes a poker room will lose money on paper. Not because having poker costs the casino money, but they choose to move the profit to some other department. That same poker room that closed to get poker players out of the casino had put up a lot of red ink before getting to the black. The red ink came from food and beverage charging full retail price for drinks. The hotel greatly over charging for hotel rooms. Even stuff like having signs made for in the cost more (out of the poker budget) to have done internally rather than going to an outside vendor. The poker room generated revenue for the casino, but still had plenty of red ink in the budget.

[Rick Nebiolo]

[ QUOTE ]
There was a time not long ago that I worked in a poker room that was making a small profit. The casino decided to give up that small profit to replace it with empty space to get poker players out of their casino. The demographics have changed enough that casinos suits (for the most part anyway) aren't concerned about poker players scaring away their other guests.

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Randy - I wonder if you knew a northern Nevada based card room manager named Dan Sullivan who used to post on RGP several years back.

I believe he's retired now put he had great posts on the realities of card room surveillance and other good stuff. But to me his most memorable comment was that he considered it his job to make his cardroom invisible to upper casino management. In essence it was because he knew how awful the grinder/nit/poker players treated the high rolling casino guests when they choose to sit in a poker game.

Just before posting found this classic thread which relates in part to the topic of poker room profitability along with other items of interest. Highly recommended read especially if you include my links to Dan's three part series on surveillance.

~ Rick

[RR]

[ QUOTE ]
[ QUOTE ]
There was a time not long ago that I worked in a poker room that was making a small profit. The casino decided to give up that small profit to replace it with empty space to get poker players out of their casino. The demographics have changed enough that casinos suits (for the most part anyway) aren't concerned about poker players scaring away their other guests.

[/ QUOTE ]

Randy - I wonder if you knew a northern Nevada based card room manager named Dan Sullivan who used to post on RGP several years back.

I believe he's retired now put he had great posts on the realities of card room surveillance and other good stuff. But to me his most memorable comment was that he considered it his job to make his cardroom invisible to upper casino management. In essence it was because he knew how awful the grinder/nit/poker players treated the high rolling casino guests when they choose to sit in a poker game.

Just before posting found this classic thread which relates in part to the topic of poker room profitability along with other items of interest. Highly recommended read especially if you include my links to Dan's three part series on surveillance.

~ Rick

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I don't know him, but I remember reading those threads years ago. It was also fun to see the names of regular RGPers that I haven't seen anything from in years.