Monday, October 14, 2013

Why the World Poker Tour failed (Part 1 of 3)

[Author's note 1: after a flurry of activity, I slacked off writing this blog for far too long. Beginning today, I'll be posting something at least once a week for the foreseeable future.]

[Author's note 2: I'm sure I'm going to hear from some of my old friends at the World Poker Tour about this - well, not about today's post but about Part 3. I'm just relating things as I remember and view them. If I've gotten anything factually wrong, feel free to take me to the woodshed.]

[Author's note 3: This was intended to be a two part story but needs to be three. I'll do my best to get Part 3 done in the next few days.]

I've been around casino poker for about 25 years now, the first half as a player and the past 12 years as both a player and an operator/marketing guy. Poker has always been popular, but it had never been a big draw for casinos in Las Vegas, Atlantic City and elsewhere because the upside wasn't big enough - casinos could make far more per square foot with a slot machine. Many casinos had poker rooms, but for the most part they were small (3-6 tables) and well off the casino floor. The theory was that poker players would also gamble (true) and their spouses might play slot machines (also true), so it was worth at least a hand-wave.

When I first started playing poker outside of home games (the topic of a future post), it was in California cardrooms. California has a long history of tolerance of cardrooms - I'm aware of one, Artichoke Joe's in San Bruno (about 5 miles from SFO) that has been in continuous operation since 1909. California left the decision about whether to allow cardrooms to local governments, and a few, like Gardena, Bell Gardens and San Jose, flourished as a result. (I heard years ago that 25% of the operating revenues of the city of Bell Gardens comes from the Bicycle Club, one of the world's largest standalone cardrooms.)

I first started playing in 1988 at a club in Gardena called the Normandie. The Normandie had about 50 poker tables and was hopping most of the time. I played low stakes limit hold 'em (mostly $3-6), and back in those days, at the hours I played (early evening) there was always a wait for a game. Poker was a pretty stable business back then - it seemed to be growing at a slow but steady rate, and most of the poker rooms in Southern California were expanding.

In 1994, Southern California cardrooms felt a mini-boom as a result of the first major new cardroom in many years - Hollywood Park Casino. Hollywood Park was located adjacent to the famed Hollywood Park Racetrack, and just down the block from the then-home of the Los Angeles Lakers, The Forum. From its opening day, Hollywood Park was packed. It wasn't unusual to wait two hours for a table at lower limit games, despite the club's having over 150 poker tables. 

In 2000, another boomlet resulted from the opening of the Hustler Casino, owned and operated by Larry Flynt of Hustler Magazine fame. Most of us expected a sleazy operation, with topless dealers dealing from porn decks. We were all stunned to discover that Flynt had built a real first-class joint, with padded walls to absorb sound, decorated with full-size, impressively realistic reproductions of Gustav Klimt paintings, and boasting unquestionably the best food in any poker room in the world (including a surprisingly high quality sushi bar).

If you've gotten this far, you may be wondering what all of this has to do with the World Poker Tour. Your patience is about to pay off.

Over the years, I've been interviewed in print, on radio and TV about the poker boom of the early 2000s. My answer has always been some variant on the following: 


There were three things that set off poker's bombastic growth:
First, online poker brought casino poker into people's homes. You can infer the rules of most casino games just by watching, but poker has its own mystique, protocol and even its own lingo that is intimidating to the average player. Online poker allowed players to learn the protocol and the lingo safely, without fear of embarrassment.
Second was poker on TV. Sure, there were broadcasts of the World Series of Poker back in the 90s and even 80s, but without hole cards, it couldn't have been more boring. But once hole cards were exposed, and ESPN and the World Poker Tour added quality commentary, poker looked much more like a game show than a documentary.
And last was Chris Moneymaker winning the World Series of Poker in 2003. All over the country, 27 year old accountants were saying to themselves, 'Hey, I could do that, too.' And they turned out in droves, packing poker rooms and online poker sites all over the US.
In July 2002, the World Series of Poker broadcast selectively showed players' hole cards for the first time. It used an extremely cumbersome system that had an under-the-table camera mounted just to the right of the dealer's box. Upon being instructed by the show's director via an earpiece, the dealer took specific hands and showed them to the camera. This was clunky and undependable, and players hated it. But it gave viewers a preview of what poker would become in the very near future.


The World Poker Tour was founded in 2002 by Steve Lipscomb, an attorney (he was with Gibson Dunn, one of the US' oldest law firms) turned director-producer (Turn Ben Stein On, Beyond Future Shock). Lipscomb produced the well-received documentary, On the Inside of the World Series of Poker, for The Discovery Channel and got his first real sense of the huge audience for poker on television and how underserved it was. A few years later, he produced and directed the 2001 Tournament of Champions of Poker (a tournament conceived and executed by his future host, Mike Sexton), and realized that the market was even bigger than he thought. And thus, the concept of the World Poker Tour was born.

Lipscomb knew that the 900 pound gorilla of poker was the World Series of Poker (WSOP), run each year at the legendary Binion's Horseshoe Hotel and Casino in downtown Las Vegas. He also knew that the WSOP broadcasts were poorly done, had no real production values and were shot and broadcast with little real regard for the audience. Lipscomb had access to all the right elements; the only thing missing were the tournament venues.

Until the advent of the World Poker Tour, there was a handful of large buy-in poker tournaments in the US. Most tournaments cost $100 to $1,000; Lipscomb was looking to reproduce the excitement of the $10,000 buy-in WSOP Main Event once a week on national television. He started by producing a demo reel of how he envisioned WPT events to be broadcast: part poker, mostly game show, lots of glitz, plenty of information so seasoned players and novices alike could enjoy the game. He brought his friend Mike Sexton into the picture as host, as well as a Hawaiian Tropic model, Shana Hiatt, for the true game show touch.

Lipscomb then took the demo reel on tour, presenting it to the largest poker rooms in the US. It resonated; within a few months, Lipscomb had signed nearly all of the US' largest poker rooms, with the elegant Bellagio poker room as the home of two annual events - the Five Diamond event and the WPT Championship. Each participating poker room paid the WPT a nominal fee (rumored to be $25,000 to $50,000, depending on the venue), and agreed to give the WPT exclusive rights to broadcasting poker events from their venues. The fees weren't where the WPT expected to make their money - that was just to ensure that the venues had skin in the game. Lipscomb believed that the WPT would reap their biggest profits from sale of broadcast rights to network television, and from marketing rights that they would extract from players in return for national exposure.

Next up: The WPT launches a boom

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