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Rod Smith

Harrah's Wins Big with World Series of Poker

3 June 2004

LAS VEGAS -- The record-shattering 2004 World Series of Poker, which drew 34,000 players at satellite, Internet and championship events, proved pivotal in defining the event's emerging image and attracting new customers to its new owners, Harrah's Entertainment.

However, even as the dust settles and planning starts for the 2005 tournament, one analyst doubted the series will have much financial effect on the company.

Harrah's executives and analysts said the popularity of the 2004 series served the company well in attracting added customers and it has the potential for doing even more next year.

The success of Harrah's marketing strategy was reflected in that paid entries in the World Series championship event tripled to 2,576 this year, up from 839 a year ago.

Ginny Shanks, who heads acquisition marketing for Harrah's, said the company's satellite games at 16 regional casinos were so successful this year, it is kicking off the first satellite tournament for 2005 in July in Atlantic City.

She said the success of the satellite tournament in Council Bluffs, Iowa, where the Bluffs Run Casino had its highest table drop since Harrah's bought it in 2001, illustrated the effect of regional competitions.

Company executives stressed that fan and spectator interest also gave the company a boost, and that it will get another dose of exposure with similar results when 24 hours of the tournament start airing July 6 in two-hour prime time segments on ESPN.

Deutsche Bank analyst Marc Falcone said the visibility of managing the national poker tournament helped the company increase brand equity in the Harrah's name.

Still, he said while Harrah's has tied the brand into its individual properties, Falcone doubts managing the series gives the company any significant financial gain in the short run.

Howard Greenbaum, who oversaw the World Series of Poker for Harrah's, said the company is still compiling data on the effect of the tournament.

However, Harrah's executives are quick to point out that they expect participation and spectator interest to at least triple again next year, and that ESPN will again increase its air time for the series, as it did this year.

Harrah's executives and analysts also said the company's management of the tournament did a great deal to build the strength of the World Series of Poker brand, which should reinforce interest next year.

As a result of Harrah's running the series and poker Web sites offering contests that awarded players their entry fees, for example, many of the players in the 33 events that made up the 2004 World Series had never previously visited Binion's Horseshoe.

World Series officials said "most" of the nine finalists qualified for the championship by virtue of their success on the Internet or at satellite tournaments where they earned their $10,000 buy-in for a fraction of that figure.

With the number of paid entrants expected to triple in 2005, Shanks said, the final prize pool should exceed $40 million, and while the top prize will probably be capped at about $6 million, the number of players winning major prize money will increase.

A World Series official said, "Harrah's has the national marketing muscle to make those numbers reachable."

This year, Greg "Fossilman" Raymer, a patent attorney from Stonington, Conn., won $5 million when he won the championship event, out of a final prize pool of more than $24 million.

It's clear why Harrah's was so interested in acquiring the World Series of Poker brand after Binion's Horseshoe was closed in January.

Players spent $105 million on organized poker in 2003, up from $90 million the year before, according to data compiled by the American Gaming Association.

Harrah's will move most of the tournament activity to the Rio next year, except for the last round of the final event, which will take place at the Horseshoe.

That should further reinforce the branding boost for Harrah's, but it may also be necessary.

Greenbaum said the number of poker tables needed to host all the expected players in the initial events is expected to increase from 120 to 200, and Binion's Horseshoe generally was mobbed this year as it never has been before.

Harrah's spokesman Gary Thompson called this year's series a learning experience for Harrah's, but said players were pleased with the operation, based on comments the company has heard.

Harrah's Wins Big with World Series of Poker is republished from