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Hold or Fold?

Newsdesk by Newsdesk
Tue 14 Apr 2009 at 16:00
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Poker at the crossroads

One size may not fit all when it comes to marketing the game in Greater China

To understand how poker in Macau has come to a marketing crossroads, it’s worth examining how the land-based casino game has typically been marketed internationally since the advent of the commercially available Internet around 15 years ago.

The business model adopted by the service providers in Macau is essentially the one imported from North American and European poker markets. Under this system, online poker rooms are used to feed players to land-based casino games, and the land-based games (through affiliation or other business links with the online providers) provide the high profile prizes and glamour that help to nurture and further develop the market.

Partnerships

In Macau some operators have both opted to go with third party partners allied to online poker rooms (PokerStars.net and the Asia Pacific Poker Tour, in the case of SJM’s Grand Lisboa, and AsianLogic and its Asian Poker Tour, in the case of Galaxy StarWorld). The APT has a stable of online partners including iPoker, TITANPOKER, Dafapoker and Everest Poker to provide players for APT events.

The APT recently announced it has been given approval by Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau, to expand the Macau leg of its tournament from six days to 12. The APT Macau Festival will run from 12th to 23rd August at the Galaxy StarWorld Hotel and Casino. The buy-in is set at US$4,300 (US$4000+300).The organisers add they will also offer high-limit games and ‘sit-n-go tables’ during the festival, hinting they will up the ante on last year’s HK$1 million (US$129,000) high rollers game.

The APPT, meanwhile, in concert with its online partner PokerStars.net, is offering a guaranteed prize pool for its main event on the Macau leg of the 2009 tour of US$1.62 million. The APPT Macau, held at the Grand Waldo Casino from 1st to 9th September, will have a buy in for the main event of HK$25,000 (around US$3,000). The top prize for the High Rollers event will be just under US$500,000.

Wynn Macau has gone for a different poker room business model from SJM and Galaxy. It has built on its wide experience of the game at Wynn Las Vegas to produce an in-house poker room, rather than using third party promoters. While this means Wynn can benefit directly from poker’s favourable margins in Macau rather than going for the safety route of guaranteed monthly income, it puts a great onus on Wynn’s marketing operation to fill the tables seven days a week. Marketing information displayed on Wynn Macau’s website about its Macau poker room is limited, but if it follows the Las Vegas model, players can expect daily no limit Texas Hold’em prize games and regular tournaments along the lines of the popular Wynn Classic events.

Under attack

A potential weakness of a poker-marketing model that relies on the online sector supplying players for the bricks and mortar sector is that online gambling businesses can be vulnerable to hostile regulatory action. By contrast, this sort of thing rarely happens to land-based gaming establishments. If a jurisdiction has gone to the time and trouble of licensing a bricks and mortar casino then (Cambodia and one or two other rackety markets aside) it’s a pretty safe bet that the authorities consider the establishment is here to stay and that there’s a worthwhile trade-off in terms of tax dollars. Governments get grumpy with online betting businesses because they’re a lot harder to control in terms of regulation and taxation. This happens regardless as to whether the government concerned labels itself as socialist or free market in its thinking. That’s why the online gaming sector has to face not only the Great Firewall of China, which blocks direct marketing or advertising of online cash gambling in the PRC, but has also ended up lumbered with the Unlawful Internet Gambling Enforcement Act imposed by the United States Congress, an institution not noted for its left of centre views but one with quite strong protectionist instincts when it comes to supporting the local taxation system, local trade and American jobs.

Texas Hold’em can withstand this challenge to its marketing model in North America because it’s a relatively mature product and already has a wide following. It’s worth remembering that until ten or even five years ago poker was not an especially popular game even in continental Europe. What has made a huge difference it seems in the West is television coverage. Poker can now be seen on subscription sports channels and in Europe in some cases (albeit late at night) even on free-to-air television.
Tuned in

“I guess a crucial aspect that really fuelled the growth of poker in North America and Europe was television,” said Jake Kalpakian, President of the online gaming company Las Vegas From Home, during the recent discussion forum at AiG.

“It’s just a matter of time that once it becomes more mainstream on TV, you’re going to see that exponential growth, beyond recognition,” added Mr Kalpakian.

Given the sensitivities of the Chinese authorities around gambling, it’s likely, however, to be some time before poker receives such on-air coverage (even for play-for-fun games) in the PRC.

For live table poker to become a truly sustainable seven days a week, 24-hours per day business in Macau, in the manner of VIP baccarat, it will need to develop a major following beyond the buzz factor created by the various visiting poker tours with their headline grabbing big money prize pools. The prospect of too many tables chasing too few players in a still maturing casino poker market could actually set the game back.

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The IAG Newsdesk team comprises some of the most experienced journalists in the Asian gaming industry. Offering a broad range of expertise, their decades of combined know-how spans multiple countries across a variety of topics.

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