Poker's Popularity: Raising the Stakes

Associated Press/Las Vegas Gaming Wire

LAS VEGAS -- Harrah's Entertainment and ESPN say they'll capitalize on poker's best-known event by beginning a series of high-profile tournaments across the country next year.

The Las Vegas-based gambling company hopes name recognition shuffles rival tournaments to the back of the pack, while enriching shareholders and players as it tries to carve out a huge swath of the lucrative and fast-growing poker market.

Harrah's Entertainment executives said the World Series of Poker Circuit will include a point system and seven televised tournaments at its casinos in Las Vegas, Lake Tahoe, Atlantic City, New Orleans and San Diego. The circuit concludes with the Tournament of Champions in Las Vegas, with top point earners gaining entry.

While Harrah's wouldn't project revenues, the company is betting the individual events will attract hundreds, with each participant spending $10,000 for a seat at one of the tournament tables.

Dan Goldman, vice president of marketing for PokerStars.com., said research shows that from 50 million to 60 million people play poker at least once a month.

Harrah's thinks the World Series of Poker brand will help it tap that market.

"It's so far head of everybody else you can't match up," said Howard Greenbaum, Harrah's vice president of specialty gambling and golf operations. "Everybody wants to play in the World Series of Poker. It's dying and going to heaven for the poker player."

John Mulkey, a Bear Stearns gambling analyst in New York, said Harrah's should generate a solid return on its investment.

"It was a natural for a company like Harrah's with its distribution points across the country to own such a popular event," he said.

Harrah's signed an agreement in July to buy Caesars Entertainment in a deal that, if approved by regulators, would make it the largest gambling company in the world with more than $8 billion in revenues.

Others already capitalizing on the poker craze include Bravo's "Celebrity Poker Showdown" and the Travel Channel's "World Poker Tour."

Steve Lipscomb, chief executive of the World Poker Tour, began airing tournaments to impressive ratings about 18 months ago.

Lipscomb's company, which has since gone public, puts on a series of 15 poker tournaments with about $70 million in prize money. The finals are played at the Bellagio.

"When you play in the World Poker Tour championship at the Bellagio, there is no better poker event in the world, including the World Series of Poker," he said. "We've established the sport. The WPT is the NBA. If they try to go up against our event, they are going to have to try to take on an established event."

While the Harrah's tournaments will carry the World Series of Poker name, the crown jewel will remain the legendary poker game that has been held at the smoky Binion's Horseshoe hotel-casino since 1971.

Harrah's believes that when it begins next summer at the Rio and Binion's, the 36th annual World Series of Poker could draw more than 5,000 people seeking what ESPN calls "poker immortality."

The 2004 world series attracted a field of 2,576 players, far surpassing the 839 in 2003. Next year, the total prize pool in the no-limit Texas hold'em main event could exceed $50 million, with the $5 million first place being increased by several million.

"We had expected to see a substantial increase in the number of players, but didn't anticipate anything of the magnitude of what actually occurred," said Ginny Shanks, Harrah's senior vice president for acquisition marketing.

Harrah's bought the World Series of Poker and the Horseshoe name in Nevada for about $50 million earlier this year.

"We knew it (was) the oldest, richest, most prestigious and most media-hyped gaming competition in the world, so we certainly knew it had the potential to generate strong revenues from the event itself, broadcast contracts and licensing and sponsorship deals," Shanks said.

Harrah's also has a licensing agreement with a company to sell World Series of Poker chips and playing cards, among other items.

ESPN purchased the rights to televise the World Series of Poker from the former owners of Binion's for $55,000 a year, Shanks said. But those low-budget days are over. ESPN's is filming the circuit in 2005 and its contract expires next year.

"We need to see what the ... market will bear," Shanks said.

Terms between Harrah's and ESPN weren't disclosed for the 2005 broadcasts.

Last week's broadcast of the final table of the 2004 World Series of Poker taped in May gave the sports network its highest-rated and most-watched poker telecast ever, ESPN said.

"The World Series of Poker is it," said Bob Chesterman, coordinating producer for ESPN original entertainment. "It's the pinnacle of poker. The players knows that and the viewers know it."

ESPN said the last hour of the finals posted a hefty 2.8 rating, representing more than 2.5 million households. ESPN hopes to draw similar numbers when it airs its first Tournament of Champions in Las Vegas.

The three-hour poker slugfest that airs today at 5:10 p.m. on ESPN was played earlier this month and included 10 of the best players in the world, including patent attorney Greg Raymer, who won the world series at Binion's in June. The winner takes home $2 million.

Copyright GamingWire. All rights reserved.