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Best of Liz Benston

Gaming Guru

Liz Benston

TV Fans Go All-In On Poker

26 June 2006

LAS VEGAS, Nevada -- When shelves lined with poker chip sets sat untouched in stores last Christmas and television ratings for last year's World Series of Poker dipped slightly, some pundits sniped that the nation's faddish obsession with poker had finally peaked.

But as Las Vegas heads into the thick of poker season, executives with the two major poker franchises scoff at such predictions and say the best years are yet to come for a game growing in viewership and, more significantly, participants.

The World Poker Tour wrapped up its fourth season of traveling poker tournaments at the Bellagio in April and its fifth season kicked off last month with a tournament at the Mirage and another event this month at Mandalay Bay.

Last year's tour paid out close to $100 million in prize money, dwarfing 2004's roughly $70 million. Each of the 17 events attracted an average of 500 participants.

The World Series of Poker, the world's largest poker tournament, begins today at the Rio and runs through Aug. 10 - the day of the final, no-limit hold 'em event and the world's richest first prize of at least $10 million.

The granddaddy of poker tournaments has grown at a staggering rate. Last year's event drew more than 32,000 entries and $106 million in prize money, up from more than 14,000 entries and $46 million in prize money the previous year. Harrah's has capped the number of players in the final event of the tournament at around 8,800 - up from 5,619 last year.

For a town shunned by major sports leagues, Las Vegas has become the de facto home of a game that - by some measures - is already bigger than the National Basketball Association and Major League Baseball.

The World Series of Poker and the World Poker Tour actually have more ambitious goals.

The two entities already have poached from the ranks of the nation's biggest sports franchises - the National Football League and NASCAR - to cultivate their tournaments into globally known brands.

It has been only five years since the World Poker Tour transformed what had been a fairly dull pastime of watching poker into dramatic reality TV when it introduced a special camera that showed players' hole cards.

Those may as well be light years for the poker world.

In 2003, the aptly named Chris Moneymaker parlayed a $39 buy-in on the Internet to a seat at the World Series of Poker, winning the top prize of $2.5 million and showing the world that an Average Joe - with a bit of practice online and just as much luck - could become rich and famous overnight.

Los Angeles-based WPT Enterprises went public in 2004 with backing from casino company Lakes Entertainment and its founder, poker player Lyle Berman.

The company's merchandising efforts entered warp speed, with the WPT logo popping up on everything from bedding to jewelry and barbecue tongs and licensing deals with more than 40 different companies. Newer products include slot machines and poker tables for American casinos.

Last year the company launched an international licensing push and now is churning out WPT products around the world, including video games, cards and chips.

The biggest chunks of money are generated from sponsorship deals. WPT has a deal with Anheuser Busch, and the World Series of Poker has a competing deal with the owner of Miller Brewing Co. Both deals are estimated to be worth seven to eight figures each, ranking them alongside some of the most lucrative contracts in sports.

While the World Series of Poker is newer to merchandising, owner Harrah's Entertainment - which bought the brand in 2003 - has kicked those promotional efforts into high gear in advance of the upcoming tournament.

In the past few months, Harrah's has signed licensing deals with more than a dozen entities, including a company that makes Swiss watches worth thousands of dollars, a deal to broadcast the tournament on satellite radio and a separate agreement to offer poker games on America Online.

Harrah's is tapping the international market through a publishing company that is distributing World Series of Poker-branded video games to cell phones in 150 countries, said Gary Thompson, director of sports and entertainment marketing for Harrah's.

Sales of branded merchandise totaled about $46 million last year and are growing this year, he said.

Competitor WPT Enterprises last year reported $4.4 million in revenue from product licensing and $14.9 million in total revenue - down 6 percent, in part because of a delay in when the shows were aired compared with a year ago.

Television licensing deals represent about 70 percent of the company's revenue - down from about 90 percent the year before - as the company has branched out into other products.

Even with a recent torrent of poker gear on the market, Thompson said, Harrah's is just scratching the surface. He predicts more big-name sponsors and more licensing deals with well-known brands.

"I read things about poker peaking and I laugh," Thompson said. "The reason people want to align themselves with the World Series of Poker is they get great exposure."

The proof, he says, is in the number of people playing poker. Thompson predicts that number - now in the millions - will grow in the low double digits in the United States and in the high double digits in Europe. Players in South America and Asia are expected to grow in the triple digits for several years, he said.

Poker viewers and players are mostly younger to middle-aged men - those most coveted by advertisers for their willingness to spend money.

The World Poker Tour, which began as a global tournament, is seeking more international deals along the lines of a recent agreement to create a separate poker tour in the Philippines.

Nearly 150 countries broadcast the tour, which ends at Bellagio's newly upsized poker room in Las Vegas.

Ratings for major poker tournaments in the United States top other sporting events save for football and NASCAR. But they may even command higher overall ratings in other countries, where fewer big sports and programs compete for attention.

In the United Kingdom, for example, the World Poker Tour attracted some 9 million viewers over the first three seasons, and in Sweden, coverage attracted about 32 percent of viewers across the country.

As popular as the game is in the United States and parts of Europe, poker remains a fairly unknown entity in much of the world. That new frontier includes Asia, where casinos are salivating over the prospects of reaching a relatively untapped population.

While the tournament is rekindling some affinity for the game that many Americans have from their youth, it is building a poker market from scratch in other parts of the world, said Steven Lipscomb, founder and chief executive of WPT Enterprises.

"It seems to be igniting an excitement about poker that didn't exist before," Lipscomb said.

In January, WPT hired Peter Hughes, a former retail licensing manager for the NFL and a sports marketing agent for Clear Channel Entertainment, to expand the brand globally. Similarly, Harrah's last year hired Jeffrey Pollack, a sports marketer who ran marketing efforts for the National Basketball Association and NASCAR, and Ty Stewart, who ran promotional and licensing efforts at the NFL for seven years.

Poker games have become the gambling equivalent of popular reality shows, where people compete head to head for a prize, said David Schwartz, director of UNLV's Gaming Studies Research Center.

"There's a winner and a loser, unlike blackjack where everyone can win if the dealer busts," Schwartz said. "It's much more about a human struggle."

The longer-term prospects are bright as well, Schwartz said. The game has attracted intense interest from young people who are likely to play the game for years. And unlike other sports where careers are limited, poker "is the sort of thing you can do all your life," he said.

For those reasons and others, Lipscomb looks to the future with the smug satisfaction of a poker player who has just drawn an inside straight.

"We have a huge belief that we have begun the climb that will be a long climb and that this will be one of the great competitive sports in this country."

TV Fans Go All-In On Poker is republished from