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Chris Sieroty

Vegas poker rooms hope for boost following online indictments

22 April 2011

LAS VEGAS, Nevada -- The multibillion-dollar online poker business remains in turmoil a week after the U.S. Department of Justice indicted several of the industry's top executives and seized several of the largest poker websites.

But the real winner behind the crackdown could be traditional, land-based casinos in Nevada.

While some online sites have bailed out of the United States pending a resolution to the legal issues, other sites are still operating and accepting American poker players.

But a gaming analyst cautioned on Thursday that any gains in statewide brick-and-mortar casinos could be temporary as players sit on the sidelines waiting for a resolution.

"You could see a little bit of a boost, but it will actually hurt in the long term," said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.

Schwartz said online poker lets people get comfortable with playing the game with money so it isn't a huge jump to playing with money in a casino. Without access to online poker, he said, many people wouldn't make that jump.

Poker has historically been less profitable for Nevada casinos than slot machines or even blackjack.

In February, poker generated $9.94 million from 873 tables statewide, or $11,391 per table, according to a Center for Gaming Research report. That was down 7.28 percent from $10.6 million in January or $12,187 generated from each of the 872 poker tables statewide.

Schwartz, who authored the report, expected monthly figures to rebound from May through July when the World Series of Poker is held in Las Vegas.

In 2010, the poker tournament helped generate more than $39.5 million in revenue during the three months it was held at the Rio All-Suite Hotel & Casino. Since June 2005, the largest monthly win for poker in Nevada was $17.66 million or $18,397 per table, reported in June 2007.

"It has never been a large moneymaker ... they just collect the rake compared to blackjack where you're betting against the house," he said. "I wonder if it even pays for itself."

People who still want to play poker online can still find several sites still accepting players, including Bodog Poker, Carbon Poker, Poker, Players Only Poker, and Card Player Poker.

As of late Thursday, only eight of the 49 sites for which tracks use figures will let players in the U.S. play real-money online poker.

Last week's raid of some of the largest online poker sites has become known within the industry as "Black Friday."

"Essentially, a multibillion-dollar business has been severely impacted," said Scott Long, publisher of the Clearwater, Fla.-based Ante Up magazine. "A lot of cottage industries that were built around online poker are also suffering."

Long said poker magazines, television shows, blogs, and poker training sites were affected by the federal government's decision to seize the Web domain names for PokerStars, Full Tilt Poker and Absolute Poker.

The online poker business is estimated to generate $6 billion annually in the United States.

"The industry hasn't disappeared," he said. "But when you lose two of the biggest, it's going to affect a lot of people besides the companies seized."

Eileen Di Rocco, publisher of Gaming Today in Las Vegas, has kept her distance from accepting advertising from online poker sites.

"I'm not really been affected by the seizure of the domain names," Di Rocco said. "I've never take ads from any online sites. Never pursued them. I never pursued them because I felt it was a gray area."

A quick glance at Poker Player newspaper finds a number of casino and card club advertisements, but not a single ad for an online poker site.

Poker Player Publisher Stanley Sludikoff said he used to have online poker advertisements but that changed with passage of the Unlawful Internet Gambling Enforcement Act in 2006.

The law basically gave banks and financial institutions the task of blocking transactions from U.S. citizens to online poker and online gaming sites.

"It cost me $1 million a year in gross advertising sales," said Sludikoff, whose biweekly newspaper is distributed in casinos throughout Las Vegas.

Ante Up's Long said he has lost three online accounts in the last week.

"We expect to make that back with advertising by traditional brick-and-mortar casinos," he said. "I think what people are missing is the ripple economic effects of this decision to close these poker websites."
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