08 August 2005

Post-Cash Tourney II

Have been practicing on my Wilson Turbo software with 45 players, low starting chips, quickly escalating blinds. Key learning is there is more luck, you can't play early hands indifferently, you have to bet bigger to maximize chips and/or to cause lay-downs. Last Tuesday, started with roughly 55 players I think, I got down to last 15 or so (hard to tell as there were other tables starting back up). I have $5,500 in chips, blinds are $100/200. I'm UTG+1, look down at AA. I raise it $750 to go, sb calls, bb raises all-in (another $3,500 or so). I stall and call, then sb calls (I was trying to suck the sb into calling, and they have the same goofy rule of no side pots). sb has KK, bb has QQ and immediately starts whining and complaining. Flop comes JTx, turn comes Q, river comes x. I get knocked down to $600 or so. I check the bb a few hands later with Q6o, flop comes Q54 with two clubs, sb bets $200, I go all-in with $350 (raise of $150). She calls with her 7c2c and catches the club on river.

My brother raised a good question over the weekend regarding the fad of poker. Let me put it another way:

  • What is the growth curve of poker?
  • Where will the total players peak at/when will this be?
  • Where will the total players settle at/when will this be?
  • Where is the secondary money to be made; i.e., stocks, revenue generation, etc.
Poker has had several negative stories in popular press after the ghost-like acquisition attempt of World Poker Tour Enterprises by a group supposedly led by Doyle Brunson. On a broad scale, supplies seems to be too fractured to make much money, television is still a struggle (we'll have to see how ESPN does with WSOP this year, but WPT is flat in viewership), PPT has yet to land a television contract, and there has been a flood of programming that offers low prize pools and less flashy play. Poker fantasy camps are major small potatoes. Casinos are rushing to build poker rooms, creating a glut of supply. Casinos know the profitability of each slot, so I doubt under-utilized poker rooms will last very long. I would assume online poker has little growth left, and this will be a real challenge for those companies going public. There is huge customer acquisition cost, even among the biggest sites (see 20% reload for party as an example of this). I haven't seen an analysis of the economics of online poker, but once the fixed costs of programming are built in, I would assume the next significant cost is player acquisition/player loyalty. So a big question is what is the break even number of players with what level of player turnover/churn needed to make a nice profit? There is potential that the number is fairly low after the initial investments are made, which may limit industry consolidation.

I received my August reload code for party, and I have to decide if I'm diving back in. It is 20% up to $100, but do I want to get involved again. My brother is right in that it is a very time consuming venture, with some similarities to golf. I may wait for bricks and mortar. I have a trip to Jersey and Maine, so I could hit Borgata/AC as well as Foxwoods. Have to figure out a plan for getting to Bellagio, but no luck yet.


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