Saturday, December 20, 2014

My name is Bond. My word, not so much.

Winter 2006

By late 2005, the battle for the online poker market was all but resolved. PartyPoker was the clear leader, although their lead over PokerStars was steadily diminishing. In early 2004, the PartyPoker/PokerStars ratio was about 5:1; by December 2005 it was just under 2.5:1. Full Tilt Poker was a clear threat, but they were well behind the two leaders.

In January 2006, PokerStars held its second WPT event at the Atlantis Resort & Casino (actually our WPT third event; the first one was on a cruise ship). The people at Atlantis, who didn't take us seriously enough to even talk to us about an event in 2004, had become believers - in fact, one of their executives told me in a meeting just before our 2006 event that we were one of Atlantis' five largest customers. We were working closely with Atlantis on several fronts, including their attempts to bring other major poker tournaments to the resort. 

It was in this mindset that this same executive mentioned to me during our 2006 event that Atlantis was working with Eon Productions on the upcoming James Bond movie, Casino Royale. In fact, part of the movie was being shot at The Ocean Club, the upscale neighbor/partner resort to Atlantis (as well as other locations in and around Nassau, Grand Bahamas). Then, as if planned (which it may have been), the senior marketing guy for Eon walked by, and my Atlantis contact pulled him over for an introduction. In the interest of not being sued, I'm going to call this guy Gene Voltshiker.

Gene was one of the savviest marketing guys I'd ever met. He started by telling me that, unlike the original Casino Royale, the new film's climactic gambling scene would be poker, not baccarat. Within just a few minutes, Gene and I were discussing with increasing excitement the possibilities that this presented for a partnership between PokerStars and Eon. We decided that we each needed a little time to think about this further, but agreed we should get together for lunch the following day.

By the next day, I had roughed out an idea in my head for a series of online tournaments, culminating in a final table held at the very same table and location as the climactic Bond-Le Chiffre scene. When Gene and I met at the Atlas Bar & Grill at Atlantis for lunch, I led with this. Unsurprisingly, Gene had a similar idea. Of course, he wanted it to be a $100 million tournament just like in the movie, which wasn't going to happen, but I loved his enthusiasm and was thrilled that we might have a chance to participate with one of the most iconic brands of the past fifty years.

We concluded our lunch by agreeing that we should talk the following week, once the PokerStars Caribbean Adventure was over and we could all dedicate the time to this idea that it deserved. I made a note to myself to formalize the idea and send something to Gene the following week.

Gene beat me to the punch. Two days after I returned to the Isle of Man, he called asking if I had plans for the first week in February. The "Bond Partners" were meeting at Atlantis to craft a unified marketing plan. I asked who the partners were. Gene told me that the list hadn't been finalized, but the confirmed partners were Aston Martin, Sony, Omega, Heineken, Smirnoff, British Airways, Atlantis, Sunseeker Yachts, Brioni and Electronic Arts.

No, I told Gene, I wasn't busy.

I quickly sketched out my ideas for the poker tournament and a variety of other ways we could take advantage of the Bond brand. I set up a meeting with Isai and Mark (CEO and COO of PokerStars) and outlined the ideas I had come up with. For the very first time since I had started with PokerStars, Isai and Mark greeted an idea with unbridled enthusiasm. They understood the value this association could bring us, and were willing to commit to it as long as we were a full marketing partner.

I returned to my office and checked my email, and to my surprise, I found a 51-slide PowerPoint deck from Gene outlining some of his ideas for the tournament and an overall partnership. He had already spoken with Atlantis about the tournament, and they were over-the-moon excited about the prospect. In fact, Atlantis agreed to store the entire final table set, which we would use to produce a truly one-of-a-kind live final table. And he had already booked travel for me to attend the partner meeting.

Over the next three weeks, the project took on even more massive proportions. I asked Gene about product placement in the movie, which was quite rare in Bond films, and without actually committing to it, he indicated that it was a possibility. He suggested that there were many obvious partnerships we could develop, which made the partner meeting even more critical. And while we hadn't signed anything, it was becoming very clear that this deal was not a pipe dream - it was happening.

The partner meeting was perhaps the most energetic and exciting marketing event I've ever been involved with. There were 21 official Bond partners - including PokerStars, which was prominently featured in all of the promotional materials and PowerPoint decks we saw over the course of the three-day meeting. I was stunned at how many of the partners were lining up to associate with PokerStars, including Sony (who wanted to discuss an ongoing TV series), Aston Martin (who wanted us to sponsor a racing team) and Omega (who wanted to produce a limited-edition Omega/PokerStars watch). Meetings with various potential partners stretched way into the nights. By the time I left, I was in the enviable position of having to choose which of the powerhouse brands we really wanted to do business with, since we clearly couldn't do them all.

Side note: The Eon team went far over the top to impress us. We were all put up in massive suites at Atlantis. Each dinner was more spectacular than the one before. On the second day, we were all instructed to meet at the yacht pier, where three yachts (serious yachts - 100+ feet each) ferried us to a location shoot. That same night, they ran a casino night during which they gave away about $20,000 in prizes (I won a one-pound Sony computer worth about $2,500). And just wandering around with the rest of the guests were Daniel Craig, Caterina Murino (who played Solange) and Giancarlo Giannini. I'm not that easily impressed, but I was impressed

When I returned to PokerStars headquarters, I was still having trouble figuring out how we were going to choose who to work with. I expressed this concern to Isai and Mark, who thought I was crazy. "This is an easy problem," Isai said. "We work with all of them."

The marketing department at PokerStars had grown substantially, but we still only had about 20 people, and there was no way we could handle this. But the potential was so great that Isai suggested I recruit a branding guru to run the Bond relationship, and hire as many people as we needed to extract the maximum from the relationship. I was fortunate enough to find Stefan Kovach, a recognized brand expert whose CV included Virgin Atlantic Airways and Beenz (an early Internet affinity marketing company).

Stefan saw Aston Martin as having the greatest potential for us. Within a few weeks of hire, Stefan negotiated deals with Aston Martin that gave us sponsorship of one of their racing teams, as well as the first new DB9 to come off the assembly line (which we gave to one of our players). 



Stefan and I also negotiated deals with several of the Bond partners who wanted PokerStars to run tournaments for them during the year, including Heineken, Sony and Smirnoff. And we moved forward with integrating the Bond name and logo into the site throughout the year.


Perhaps most importantly, we started working on the tournament at Atlantis. Sony got involved in the discussion at this point - they had been looking for a way to get involved in the massive popularity of poker on television, and were willing to pay some significant money for the exclusive right to broadcast this event. We settled on a $10 million guarantee tournament, with $2 million for first place, making it the third largest tournament in the world (behind the World Series of Poker Main Event and the World Poker Tour Championship).

By March 2006, we had spent about $300,000 on this project, not including the salaries of the various people we had hired to work on different aspects of the event. We had signed a 'heads of agreement' letter (the UK equivalent of a letter of intent), and were hammering out the final details of the contract. I traveled to London to meet with the Eon legal people, and all seemed to be well. I was even treated to a short meeting in the coolest office I've ever seen - the 5,000 square foot office of Barbara Broccoli, Eon CEO, producer and daughter of Albert "Cubby" Broccoli, the genius behind the Bond movies. The office, in a 200 year old building with a view of Buckingham Palace, featured a fireplace that could hold 16' logs (which I think should properly be referred to as "trees").

We had a short vacation scheduled in April 2006 - our friends Shaena and Steve were getting married in Hawaii, so we planned to take a week to attend their wedding. Shaena has played a part elsewhere in this saga, including "The girl with the $16 million purse" and "70,000 drunks clinging to a rock." I was a little nervous about leaving - we were very deep into the Bond project, and our WSOP presence was looking to be massive (over 1,000 players had already qualified), but we had committed to attending. 

By early April, the final contract still wasn't done. More troublesome - the Eon lawyers were taking their good-natured time completing it, which was very scary - we intended to launch satellites at the very end of the WSOP, which was less than three months away. And even more ominous: starting the first week in April, I could no longer get Gene on the phone.

Prior to early April, Gene and I had spoken every day, sometimes more than once. We were coordinating the activities of a number of large companies (Sony, Atlantis, Aston Martin and others), and our own companies had their own bureaucracies, so getting all of the moving parts to work in coordination with one another was no simple task. I wasn't particularly alarmed at first; we were all busy, hurtling at high speed down a path that would ultimately lead to huge opportunities for everyone involved.

We were scheduled to leave for Hawaii around April 15, and by the day before we left, Gene had gone dark for 10 days. Isai, Mark, our lawyers and I discussed this regularly - we had been confident that the HOA we had signed would turn into a contract, but the Eon lawyers weren't giving us much, and Gene even less. By this point, we had not only a big investment in money, but in time and marketing efforts. If this event didn't happen, we had a huge hole in our marketing plans for the second half of 2006. And we had already finalized and signed contracts with Aston Martin and others, some of which were dependent on the tournament taking place.

I spent almost the entire week of our vacation (except the wedding itself) emailing and calling Gene and others, attempting to figure out what was going on. By the time the second full week of silence had passed, it was clear that something was terribly wrong. I finally left Gene the message I had been avoiding, which went something like "Look, if you're backing out, at least have the decency to call and tell me so." 

When even this didn't work, we collectively decided that we needed to do something. We went quietly to a few of the partners, each of which also had a substantial investment in the tournament, and asked them to press Gene on our behalf. 

This worked. Gene finally called me on our last day in Hawaii to inform me that Eon's outside counsel believed that Eon was taking a substantial risk in a partnership with us, and as a result, we would not be participating in Casino Royale in any way. As further insult, the day I returned to the Isle of Man, I received a letter from said outside counsel, warning me that our right to use the Bond name, trademarks and logos had been revoked. 

By this point, we had hired five people for the project, and had spent countless hours of other peoples' time building marketing materials and tournament plans. None of it was usable. I even received a veiled threat from Eon that our relationship with Aston Martin might be in violation of Eon's rules for partners (fortunately, the president of Aston Martin intervened on our behalf).

In a way, this ended up being a blessing rather than a curse. When the Unlawful Internet Gaming Enforcement Act (UIGEA) passed in September 2006, Eon would have been forced to terminate our relationship anyway, and by that point we would have spent $5 million or more that we couldn't recoup. But there's a valuable lesson here that we all knew, but ignored: don't spend money until you have it in writing.

By the way, I might have fired me had I been Isai or Mark. But they knew that we had all gotten swept up in the excitement, and everything we did was with their knowledge and approval. Which brings to mind a quote from Die Another Day that sums this up:
Bond:Do you believe in bad luck?
Jinx:Let's just say my relationships don't seem to last.
Bond:I know the feeling.

Sunday, November 16, 2014

What happens when you give marketing guys too much money (Part 3)

The 2006 WSOP was the year of the most conspicuous marketing excess in online poker. Every online site had a huge presence during the Main Event. PokerStars had a monstrously large presence with 1,624 players, but we were far from alone - collectively, PokerStars, PartyPoker, UltimateBet and Full Tilt Poker were responsible for over 40% of the prize pool that year - a staggering $32 million.

And with that came massive spending surrounding the WSOP. PokerStars was the biggest player on an unimaginably big stage, and we weren't going to let any opportunity pass us by if it meant more exposure.

The first example is small in relative terms, but it's a good example. I've talked before about Rich Korbin, my marketing director and overall superhero. When we realized in March 2006 just how big our WSOP presence would be, Rich set out to provide PokerStars players with the most outrageous experience possible. 

One of Rich's responsibilities was the player swag bag, something we started doing in 2003 that became increasingly elaborate in subsequent years. For the 2006 WSOP, Rich went far beyond anything he had come up with before. He had a roller bag designed with the PokerStars logo, and had each bag individually embroidered with the player's name (I still have mine). In the bag was a mind-boggling assortment of PokerStars gear, including baseball jerseys, football jerseys, hockey jerseys, hats, golf shirts, t-shirts, even headphones. And he had one-ounce silver commemorative coins minted for each player as card cappers. 

When Rich came to me with his plan, I did a quick calculation based on our projected number of players (which in March 2006 we thought would be around 1,400). He was talking about spending $700,000 on swag. I got it - he wanted to do two things: (1) ensure that the PokerStars logo was visible any time an ESPN camera was running, and (2) dazzle players so completely that they'd proselytize PokerStars even more than they already did.

The only problem here was budget. While PokerStars grew explosively from 2003-2006, it wasn't until late 2005 that we brought someone in to put financial controls in place. It's not that we didn't do budgets - we did - but budgets were quite fluid in the early days. I had done my 2006 budget in the fall of 2005, and it now looked like I had underestimated our WSOP presence significantly. I needed money.

I went to Isai Scheinberg (PokerStars CEO, my boss) with Rich's proposal. We were talking about spending $500 on each player, and even in these excessive times, Isai thought this was over the top. I had asked Rich to send a sample bag to the Isle of Man offices, and I started our discussion by heaving the 25 pound bag onto his desk.

Isai went through the items one by one. Isai pulled out a commemorative baseball Rich had made, encased in a Lucite box. "Do we really need this?" he asked. I didn't say anything.

He then pulled out one of the hockey jerseys. These were truly works of art - they were made by the same company that makes jerseys for the NHL, with the PokerStars logo on the front and the players' names embroidered on the back, with the number "06." He held it up, then laid it on his desk and examined it more closely.

"These are really nice. How much are we paying?" I told him, fully expecting him to veto it right there - the jerseys were about $60. Rather than trying to get any of the 20-odd items in the bag cheaper, Isai surprised me by asking, "Can we get the total cost down to $450?"

We could, and we did. In the end, we spent over $730,000 on gear for players that year. And it's a source of pride to me when I see players still wearing the hockey jerseys, which happened as recently as a month ago.


By April 2006, I had gotten used to being approached with outrageous marketing opportunities for PokerStars. We came very close to sponsoring a Bon Jovi tour. We talked about (and eventually passed on) being a name sponsor of the Bonnaroo Festival. We spent millions producing amazing TV spots and much more getting them on the air. But the proposal that came to me that April surpassed anything we had even considered in the past.

I got a call from a representative of the William Morris Agency - I'll call him Bill, as I don't recall his name and don't have it in any of my notes. He had been hired by Harrah's to sell what is arguably the single best marketing property in all of poker: the WSOP table felt. 

There is considerable value in the table felt just as a marketing tool for players - every player in the WSOP sees the felt for many hours each day, and I would guess that there were about 75,000 unique players in WSOP events that year. But the real value of the table felt was ESPN's TV coverage - every shot on every table would display the logo.

I pumped Bill for as much information as I could get, and he was surprisingly forthcoming. The other major sites, PartyPoker, Full Tilt Poker and UltimateBet, were all being approached. They were all interested. And two other non-poker properties were planning to make offers. Harrah's was accepting a single, sealed bid from each interested party.

Oh, and the floor was $3 million.

My first reaction to this number wasn't shock. In fact, I thought $3 million was a bargain. I then started thinking about how we could weave this into our marketing, and perhaps how we could use it to extend our WSOP presence. I called Bill back and asked if we could include other WSOP properties in our bid, particularly the WSOP scoreboard. Bill told me that Harrah's was open to whatever we proposed as part of our bid.

I gave this considerable thought before I took it to Isai and his son Mark, who ran and essentially owned PokerStars. I knew that $3 million was far from the final number, but I was having trouble working out just how far. I tried applying typical marketing principles to this calculation, but it was just too hard to quantify. Whatever we did was going to be a guess.

I decided that this was going to require a different approach. I was used to going to Isai and Mark with some hare-brained idea more or less ad hoc. But this was a lot of money, and had far-reaching implications for us. So I did something I only did once at PokerStars - I put a PowerPoint deck together to pitch them.

The deck consisted of only four slides. On the last slide, I revealed what I thought would be the winning bid: $8 million. I brought my laptop into Isai's office, made my presentation and watched for a reaction.

Neither of them were shocked, although they were as surprised as I that Harrah's, who clearly didn't like us much, was interested in our name on their felt. We talked logistics. We talked about how many actual impressions we'd get. We bounced around the many things a huge check might buy us (cosponsoring the WSOP? allowing players to register on-site with PokerStars money?). Isai and Mark then decided that they wanted to talk about it, so I went back to my office.

My phone rang about ten minutes later - they were ready to talk again. I returned to Isai's office.

"Put in a bid for $10 million." As he had so many times in the past, Isai wanted to come in proactively high, attempting to cut off any chance of being outbid.

We had tossed around large sums in the past, but I can honestly say that this staggered me. It was a gigantic risk, and we had little, if any, way to measure its success. But I thought the upside was potentially huge. I was in.

I submitted our bid via DHL the following day. Things went quiet for quite a while - I didn't hear anything more from Bill for almost two weeks. Finally, the first week in May 2006, he called. 

"Is this your absolutely top number?" he asked. We had discussed this possibility, and had decided that $10 million was probably more than the felt was worth. We weren't going any higher.

"Yes," I said, "You asked for a single bid, and told us there wouldn't be an auction."

"There's no auction," Bill replied. "But I can tell you that one of your competitors has put in a bid that we are inclined to take."

"Is it more than $10 million?" I asked. I assumed that Full Tilt or PartyPoker might have come up with some sort of package deal that included other exposure (like wrapping the outside of the Rio, for example, something Harrah's had pitched us before for $1 million).

"I can't say, but I can tell you that their proposal nets Harrah's more money." 

I went back to Isai and Mark. I was concerned that we were already too exposed, and couldn't see offering any more. They agreed. Isai suggested that we could consider going back to them with a multi-year offer, but that it should either be for less money, or give us some option to get out, since no one had any clue about the impact.

The following week, PartyPoker got the felt deal. I spoke with Bill several times after this, and finally cajoled him into telling me what they paid. It was $19 million, but for a two-year guaranteed deal. Isai had been on the right track.

As it turns out, I'm vastly relieved that we didn't get this one. First, I'm not convinced of the value, although that's more in hindsight. Second, since the UIGEA passed a few months later, I don't know what would have happened with the second year payment - since PartyPoker withdrew from the US, they were able to continue as a sponsor in 2007. And lastly, Harrah's and ESPN ended up in a lawsuit with Everest Poker a few years later when they took over the felt sponsorship, in which Everest complained that Harrah's replaced the Everest logo with Full Tilt's in international markets. I could easily have seen us in their place given the contentious relationship between Harrah's and PokerStars.

There was a valuable lesson in this for me. While I was initially hesitant about this, I got swept up in the massive potential of the deal, and I think I paid a price in perspective. Almost any time I brought some huge proposal to Isai, he asked the same question: "What if we just gave that money to our players?" For some reason, he didn't ask it this time, and I wish he had. While the deal would have gotten us great exposure on ESPN, giving $10 million to players would have, too.


Sunday, November 9, 2014

What happens when you give marketing guys too much money (Part 2)

The first part of this story was pretty easy to write. There were two stories that I thought were a good representation of how money started to flow freely once PokerStars took off. This second part - not so much. And it's not because of a lack of subject matter - it's exactly the opposite.


I am a pack rat, something that drives my wife Sharon out of her mind. As an example, I have every ticket for every significant event I've been to in my adult life. I'm talking sporting events, concerts, plays, trade shows - everything. This extends to my computers - I have every email I've ever sent or received, and historical files from most of the places I've worked. I have every document and every proposal I ever reviewed at PokerStars, and the number is mind-boggling - a quick count put just the number of rejected proposals at 1,200. That's a lot of material to choose from. And the selection ranges from the absurd (a poker-based reality show featuring homeless people) to the outrageous (a $1 million buy-in tournament with two years of qualifiers).

Having said that, I'll warn you - a few of these were obvious inclusions, but the rest were a random draw. The best part of this, of course, is that I have a rich source of material for the future. The following story deserves some detail, so it's the sole subject of this post.

From 2005 to 2011, NBC produced and broadcast my very favorite poker show: the National Heads-Up Poker Championship. I admit to some bias, because I had a hand in this project. But when some of the smartest and most creative minds in the business got involved, this show/event became what poker television should be: fun, understandable and dramatic.

In early 2004, I got a call from Jamie Horowitz, an associate producer for NBC Sports. He had a germ of an idea for a poker show, and wanted to know if there was any interest at PokerStars in a sponsorship role. The poker boom had firmly taken hold, the World Poker Tour was getting very respectable ratings, even in reruns, in its first season and NBC had taken notice. 

This was the first of about a dozen calls between Jamie and me, talking through not just PokerStars' role but the structure of the show itself. I was a huge fan of the concept. Poker television was chock-full of shows that featured only a handful of key hands, which jaded the audience's view of what tournament poker is really like. This seemed like a chance to show what top-shelf poker really looks like - smart and creative poker players making magic with ordinary cards.

I didn't discuss the concept with Isai (the CEO of PokerStars, and my boss) just yet. He liked to get involved in the details of projects like this, and I had no objection to this in general, but I wanted his first look at the NHUC to have some substance. I did tell him that I was in discussions with NBC about a new concept for poker programming, and he was satisfied to wait until there was something substantive to look at.

Jamie wanted to bring in someone with poker production expertise, and chose Mori Eskandani, who had just produced the surprisingly successful Poker SuperStars broadcast on NBC. Mori proved to be an invaluable asset in the creation of this event - he was both an experienced television producer and a respected high-limit poker player. Mori would go on to produce some of the best and most successful poker shows during the boom, including Poker After Dark and High Stakes Poker.

By the fall of 2004, the show was taking shape, and I liked it much more than I had when Jamie first called me (which is saying a lot). There was one more component that I wanted in place before I presented it to Isai - I wanted to figure out some means of limiting the exposure our competitors could gain in the show. All of the major sites had at least a few pros in their stables at that point, and I knew NBC would be inviting them all. And I knew that I couldn't keep PartyPoker, Full Tilt and UltimateBet from advertising on the show.

I also knew something I shouldn't have - a source close to some senior people at NBC leaked to me that their management was concerned about production costs, which were looking like they might exceed $2 million. So I took a leap and called Jamie with a proposition: what if PokerStars guaranteed NBC a profit by underwriting the production costs?

Jamie was all over the idea. We quickly hammered out deal points to make PokerStars the presenting sponsor of NHUC. Our name would appear on the opening credits, at all of the breaks and on the felt. We would buy a substantial chunk of the 18 minutes of network spots each hour. We even agreed to be a contributing sponsor for Arena Football, a pet project of NBC's Senior VP of Sports Programming, Jon Miller.

After some wrangling, we established a price: $2.7 million. And to my utter shock, NBC agreed to a term that I had included with no hope of survival: exclusivity. PartyPoker, Full Tilt and UltimateBet were out. They would have players in logo gear playing in the event, but we owned the breaks.

Now I was ready to present it to Isai.

I expected there to be some selling involved. To my surprise, Isai was much more interested in how we could use this as a keystone project, anchoring our marketing around the WPT and NHUC. There were a few things he wanted to add (like some ratings guarantees, which we had gotten from the WPT and The Travel Channel), but for the most part he was in. There was no discussion of price - Isai knew that I had gotten everything I could before bringing this to him and had negotiated the best deal I could.

NBC quickly agreed to the few additional terms Isai asked for, and just before Christmas 2004, we exchanged deal point drafts. And then, in two disastrous strokes during the first week of January, everything fell apart.

The first of these was a call from my old friend/nemesis at the World Poker Tour, Steve Lipscomb. He had heard rumblings of what was happening with NHUC, which alarmed him - this was the first poker broadcast that had a chance to challenge the WPT and WSOP. He pointed me to an obscure clause in our 30+ page contract with the WPT that he believed precluded us from top-line sponsorship of a competing show.

24 hours later, while I was still reeling from this development, I got even worse news. NBC's Standards & Practices group had gotten their hands on one of the deal memo drafts, and determined that any production credit for PokerStars put them in danger, based on their continuing fear of the Department of Justice. I discussed various scenarios with Jamie and Jon so we could salvage the show, but it looked like NHUC was never going to air.

I still wasn't sure where we stood with NBC when I spoke with the WPT next, but I wasn't going to tell them that. There were a few conference calls that included lawyers on both sides, and while I usually like being involved in this sort of thing, I just didn't have time. We were a few days away from our first event at the Atlantis Resort (see "In which we learn what expensive really means") and I was swamped. But PokerStars had some really smart lawyers, and I knew they had this well in hand.

Later that day, Jamie called me with some relatively good news. While Standards & Practices wouldn't allow PokerStars to be the presenting sponsor of NHUC, they were still willing to take at least some of our money. Jamie asked if we would be interested in a 'cooperative arrangement' rather than sponsorship - we would guarantee NBC a certain amount of revenue in return for both spots on the show and other promotional consideration. I used this as an opportunity to squeeze one more PokerStars player onto the show (Greg Raymer and Chris Moneymaker had already been invited; we added Tom McEvoy). We went back and forth on a few other issues, but in the end we signed a $1.4 million deal that gave NBC sufficient guarantees to move forward with the show.

And the rest, as they say, is poker history. The National Heads-Up Poker Championship was a modest success for NBC and a huge success for poker overall. The show aired from 2005 to 2011, then returned for one more season in 2013. I hear rumors that it's coming back in 2015, and I truly hope this is true - it's the best poker show on TV.

Three endnotes to this story:

- We ended up with not three, but four players in the 64 player field for this event. The night before the first match, NBC held a huge cocktail party/match-up draw at the Golden Nugget, where the first event was filmed. Rich Korbin (my Director of Marketing and overall right-hand guy) called me that morning, telling me that Evelyn Ng was playing in the event and wasn't affiliated with a site. I was in LA, planning to go to Las Vegas the following day, but I printed a contract, jumped on a plane and tracked Evelyn down at the cocktail party. She signed the contract and was wearing PokerStars gear the next day.

- Team PokerStars didn't fare particularly well in this first year of the NHUC. Evelyn beat Bobby Baldwin pretty handily in the first round, only to be crushed by Carlos Mortensen. Greg Raymer beat Kathy Leibert in round one, but lost an excellent match to Huck Seed (1996 WSOP champion) in round two. Chris Moneymaker, who would go on to the finals of this event in 2011, also won his first round match (vs. Eli Elezra) and also fell in round two, to Mimi Tran, who had taken out our fourth player, Tom McEvoy, in round one.

- I haven't stayed in touch with Jamie Horowitz since I left PokerStars in 2007, so I thought I'd look him up for some background for this story. He's come a long way since his associate producer days at NBC - he left for ESPN, where he launched and produced Keith Olbermann's show, but returned to NBC in May 2014, where he has taken over as Senior VP/General Manager of The Today Show briefly took over as Senior VP/General Manager, only to be fired weeks later. I hope he's off enjoying the $3.3 million that NBC was required to pay him as a contract buyout.

Update: As I should have expected, Jamie landed on his feet. In May, 2016, Fox Sports hired him as their new President.

Wednesday, November 5, 2014

What happens when you give marketing guys too much money (Part 1)

First, I owe everyone who's a regular reader of this blog a profound apology. I made a commitment a while back that I would post at least once a week, which may not seem like a daunting task. However, each of these posts takes some considerable time to assemble, particularly fact-checking and date-checking. And I try to make each of these a short story in itself, so having read the other forty-odd posts here isn't a prerequisite. This means that each 1,500 words I write ends up taking 4-6 hours of writing (not to mention thinking).

We have been working on a major software upgrade for my consulting client, Barona Freeplay Online Poker, for most of this year. We entered final testing in August, which frankly was problematic and consumed about 50% more of my time (and Sharon's) than expected. Then we launched, and that 50% became - well, a lot more than 50%. It's been a very difficult period, consuming 12, then 14 and eventually 18 hours a day until things finally settled down. We're still not truly settled - we have a lot more work to do - but things have stabilized to the point where I feel like I can take a few hours here and there to do things I enjoy, like writing this blog.

For the foreseeable future, my guarantee of one post a week will be a gentleman's/ladies' agreement. I'll reinstate the $100 punishment for non-compliance once I'm more certain of my schedule.

*****************

When I interviewed with PokerStars (more on this here and here), one of my concerns was that the company was attempting to go up against the well-established 900 pound gorilla (which was Paradise Poker back then in 2002). The big issue with attempting to fight a 900 pound gorilla is that you need to be able to act like a roughly 900 pound gorilla yourself. Popping a few ads into Card Player wasn't going to be sufficient - we were going to need to be very creative, and in this context, there's a pretty simple equation:

creativity = lots of money

One of the tasks I performed for Isai before he hired me was to create a marketing plan - not a full-fledged plan, but he wanted me to sketch out details about how I would go about launching the company. As part of this exercise, I created a marketing budget, which involved spending about $600,000 on marketing in year one. I had no idea what PokerStars' financial backing looked like, nor did I know at the time who the owners/investors were other than Isai. I wasn't thrilled with where I was working, but leaving a reasonably well-paid position with an up-and-coming Internet company for a startup was already going to be a challenge - I needed to know that they had deep enough pockets to have a chance in the market.

At some point in the interview process, Isai asked me if I had any questions. I asked, "You've read my marketing plan. Do you have $600,000 to spend on marketing in year one?" Without skipping a beat, Isai said, "We have the money we need to properly launch this company."

Had this been anyone else, I would have had a lot more questions. But there was something about Isai that I simply trusted implicitly. This may seem naive from a nearly-fifty-year-old (at the time), but I've come to rely on my business sense, and there was no doubt in my mind that PokerStars had the resources to carry out an audacious plan.

I'll start with a modest example. After Chris Moneymaker won the 2003 World Series of Poker, I was constantly looking for ways to capitalize on his extraordinary accomplishment, and to leverage his name (which was, frankly, a dream for a marketing guy). After the first few broadcasts of Chris' final table, he was instantly recognizable, so one thought was to experiment with some pure branding around his name. I had this idea for a billboard that would directly tie Chris' success to his experience on PokerStars. I took one of our standard layouts, played with it a little and came up with this:



I thought the tagline was one of my best - it directly linked Chris with PokerStars, broadly implying that he won the WSOP because of us. I sent the design off to our staff artist and started shopping around for billboard locations around LA, thinking that we would use one of the world's largest poker markets as a test.

Around this same time, we got into some very contentious discussions with the owner of the Bicycle Casino, Haig Kelegian. Kelegian owned the Bike, Oceans' Eleven near San Diego and part (later most) of the Commerce Casino, and was an insufferable jerk of almost unimaginable proportions. The last meeting we had started off with Kelegian, in front of five of his own staff, saying, "Companies like yours are illegal, and I can put you out of business with a few phone calls." This pronouncement, I kid you not, was immediately followed by his request (through Kelley O'Hara, his marketing director) that PokerStars run satellites for the Bike's upcoming tournament series.

If that's not outrageous enough, what followed literally made my jaw drop. I told Kelegian, O'Hara and the rest of his team that we might be willing to run satellites for them, but that we needed to work out how we could mesh the brands together so we could each gain some benefit. Kelegian then told me that we couldn't use the Bicycle Casino's name or logo to advertise satellites. When I asked him why we would send a few hundred thousand dollars of our liquidity to the Bike for essentially no return, he said the following: "Your players will know, and our players will know. You should be happy just to be associated with us."

No shit, he actually said this.

In the car on the way home from this complete waste of time, I got a call from Marc Chessen, who owned a media company we had done some business with. I had asked him to look into the cost of a small number of billboards that we could use as a test. He was calling to give me the estimate, and to tell me that there were two particular billboards we might like - they were on the 710 Freeway, on the approaches to the Bike from both north and south. 

"How far are they from the Bike?" I asked.

"You could throw a rock from either one and hit the Bike," Marc answered.

Life isn't always perfect, but then there are moments like this. 

"I'll take both of them," I said. Marc pointed out to me that he hadn't told me the price. It didn't matter. Three weeks later, Haig Kelegian got to look at this on his way to the office.



This escapade cost PokerStars $30,000 a month, plus the cost of the boards (we did a total of six, including one at the exit from the Commerce). Isai wasn't convinced about doing a branding campaign - he believed that our money was better spent in direct response until we were better-known. But I believed that Moneymaker's brand would help us rise to the top, and was willing to take a chance.

There's a nice epilogue to this story. We regularly surveyed our players to find out how they had heard about us and what made them sign up. Within a few days of putting up the billboards, we started to see measurable numbers of players saying that they first learned of PokerStars from the billboards. By the end of the first full month, over 200 players claimed that the billboards brought them to PokerStars. My branding campaign had, inexplicably, become a direct response campaign.

And there's one final, satisfying note. It was a few years before we tried to do anything with the Bike again, and this time it was them approaching us. By 2005, we had three WSOP champions in our stable, were one of the three dominant brands (along with PartyPoker and Full Tilt) and were, in real dollars, larger than the Bike by a substantial margin. Kelley O'Hara asked us to work with them on satellites and other promotional opportunities surrounding their World Poker Tour event, which we did (and used their name). In the last meeting before we launched, we hammered out the final details and I thought we were done. As I was packing up, Rick Cloward (who, I think, was VP Operations) asked if he could speak with me privately. When we reached his office, he closed the door and said just one thing: "Would you please take down those fucking billboards?"


I have written before about the horrific series of events leading up to our first World Poker Tour event, conducted on a cruise ship in January 2004 (see "How I almost went to jail as a terrorist," "Revenge of the Girlfriend" and other related stories). Without rehashing those stories much, I'll mention that I had to fire our travel agent a few weeks before the event, which meant taking on far more work than our microscopic staff was able to handle. We were all working 18 hours a day with no respite in sight until after the cruise.

In the middle of all of this panic, I got an MSN Messenger message from Isai (this was our preferred means of communication for most things). He had heard that Sharon had played quite a bit of poker with Ben Affleck, and asked me if I thought she could get him to come on the cruise. I told Isai that I doubted that Sharon knew him well enough, but I'd ask her opinion.

The next time we went to the Hustler to play, there was Ben. Sharon approached him with the idea, and much to our surprise, he was not only interested, but seemed excited at the prospect. He gave Sharon his agent's contact information and told us to work out the details with him.

I called the agent the following day, and he took my call immediately - Ben had already told him to expect my call. I gave him my pitch, he asked a lot of questions and then said he'd talk to Ben and get back to me.

The next morning, he called. Ben would love to go on the cruise, and he had just enough time in his schedule to do it. And then he dropped a bomb - he wanted a $1 million appearance fee. 

There was no way this was going to happen. $1 million was a very measurable chunk of my marketing budget, and I honestly didn't think there was anywhere near that much value in having him along. But I told the agent we'd talk about it. I hung up and called Isai.

"OK, I talked to Ben Affleck's agent. He wants a $1 million appearance fee." Without missing more than a half-beat, Isai said, "OK, work out the details," and hung up.

So now, in addition to personally making travel plans for the roughly 600 people going on the cruise with us, I now got to negotiate and execute a seven-figure deal with arguably the biggest star in the world. I got to work on the contract with our lawyers, and started working out the logistics. I called the agent after we sent the contract along, and he dropped the next few bombs.

"Ben doesn't travel commercial. You need to fly him from LA on a private jet. I'll send you the specs," he said. They arrived while we were talking - Gulfstream IV or comparable, two wait staff, no one else other than the pilots and whoever Ben brought along.

"OK," I said, having no idea whether or not this was OK. "What else?"

"Ben doesn't want to board with the rest of the passengers on the cruise." I told him that wasn't a problem - we'd board him first, or last, whatever he preferred.

"No, he doesn't want to board at the pier. You need to arrange to fly him to the ship."

By this time, I was in so far over my head that a little more wasn't going to change things much. "OK, what else?"

He sent me a list of relatively minor things - his cabin requirements, getting him from the hotel to the ship, stuff that seemed downright trivial in the face of hiring a helicopter to fly to a moving cruise ship. I told him I'd call him back later in the day.

My first call was to Royal Caribbean. I had no idea if landing a helicopter on a cruise ship was even conceivable. As it turned out, they had done it before, more than once, and yes, it could be done. However, there were two other things that we needed to consider:

(1) They don't allow helicopters to land while the ship is moving except in dire emergencies. So, they would stop the ship for the landing, but it takes an hour to come to a full stop and an hour to get moving again. Cost to us: $200,000.

(2) We needed a permit from Homeland Security, which normally took a minimum of two months. However, my RCCL rep knew someone at DHS and thought she could get it through.

I called Isai again with some revised numbers. Including Ben's appearance fee and all of his demands, the cost of bringing him on the cruise was now just over $1.4 million. 

"OK, do it," he said. Just like that. And my first thought was what's it like to spend $1.4 million by just saying "Do it?"

In the end, we didn't do it. The DHS security certificate was most of the reason - despite my RCCL guy's assurance, there was no guarantee we'd get the permit in time, and we might easily be committed to over a million dollars in expenses and no way to get Ben onto the ship. I breathed a huge sigh of relief - I was never really sold on the idea in the first place, and honestly didn't know if I'd get through the whole experience without having a stroke.

Click here for Part 2.


Saturday, August 30, 2014

How Caesars saved the World Series of Poker (Part 2 of 2)

[Note: regular readers of my blog know that I made a commitment a while back about posting at least once a week, with the penalty being a $100 contribution to charity. I backed off on this during the WSOP, as that is my busiest time of year, and continued to slack through BARGE (my favorite week of the year - more about BARGE here). But I'm back now, and the charity penalty is back in effect. If more than a week passes between posts, email me or post a message here; the first one to catch me can designate the charity to which I'll contribute $100. Oh, and don't get a stick up your butt about "a week" - if I post something on September 2 at 3p, don't start emailing me at 3:05 on September 9. 12:01 on September 10 is acceptable.]

There is no generally accepted date on which the poker boom started. If you asked me, I'd say the the seed of the boom was planted the day the first hand of online poker was dealt, it took root the day of the first World Poker Tour (WPT) broadcast (March 30, 2003) and sprouted the day Chris Moneymaker's World Series of Poker win was first broadcast (August 2003, although I'm unable to find the exact date). But in fairness, the World Series of Poker (WSOP) has always been at the heart of the poker boom. Had it not been for Harrah's, that heart would have stopped beating on January 9, 2004, when Binion's was raided by the IRS, the Nevada Gaming Commission and Federal marshals.

[Kudos to Keith F. for a clever edit of the above paragraph.]

I described some of this in Part 1 of this article. The timing of the Binion's raid was bad for all involved - it was less than four months before the 2004 WSOP (which always ended the Friday before Memorial Day back then) and just a few weeks before the first regular episode airing of WPT Season 2. And if you think this is a spurious detail, remember that booms and busts turn on small matters - and these weren't exactly tiny.

From my perspective, this was bad for different reasons. PokerStars had just achieved a monumental success at the 2003 WSOP, had just been invited to join the WPT and were just days away from our first WPT event on a cruise ship, some of which you'll find chronicled here and here. We had massive promotions planned for the 2004 WSOP, which were scheduled to launch in early February. As far as I knew, we might be running satellites to a tournament that wouldn't happen.

Lee Jones and I sat down to discuss this possibility during the PokerStars Caribbean Adventure cruise. We came to the conclusion that someone would rescue Binion's and the WSOP. We briefly speculated on who might come forward, if anyone. Our plan was to launch satellites for the 2004 WSOP as soon as the cruise was over, which would include $10,000 Main Event entries plus cash. We decided that, in the worst case (no WSOP), we would just give players $10,000 in cash.

To our great relief, Binion's reopened under the temporary management of Harrah's on April Fool's Day 2004. It really wasn't clear in those first few days what Harrah's plans were - they weren't exactly a power in the Las Vegas poker scene. We really weren't even sure if they understood the value of the WSOP property they had bought along with the casino. 

Fortunately, it immediately became obvious to all of us that both Harrah's and ESPN were taking the WSOP very, very seriously. The first hint we had of this: Lee and I were invited to a meeting at Binion's in mid-April to help Harrah's and ESPN figure out (1) which WSOP events made sense to broadcast, and (2) how to show non-hold'em events on television.

ESPN brought their heavy hitters to the meeting, including Matt Maranz, the self-effacing head of the WSOP production company (441 Productions). Harrah's sent a team of executives, most likely the engineers of the acquisition. And Harrah's did something that I found extraordinary, especially given the scope of the investment they were making: they just shut up and listened to the experts.

Harrah's was in a very interesting spot. By April 2004, all the symptoms of a boom were popping up. 7-11 and Wal-Mart were selling cards and chips. Poker books became best-sellers on Amazon. Hastily produced poker television had already popped up in the form of poorly produced and not very interesting (US Poker Championships), decent concept with poor execution (Poker Royale) and downright silly (Celebrity Poker Showdown). And celebrities were emerging, complete with nicknames. Suddenly, normal human beings knew names like Howard "The Professor" Lederer, Chris "Jesus" Ferguson, Barry "Robin Hood" Greenstein, Phil "Poker Brat" Hellmuth and Men "The Master" Nguyen. Harrah's knew that there was, at least in the short term, a nearly insatiable appetite for poker on TV.

The executives at Harrah's patiently watched us audition more than a dozen different poker variants beyond no limit hold 'em, all of which were regular WSOP events (limit and pot limit hold 'em, Omaha, Deuce to Seven No Limit Draw, Seven Card Stud, Razz and more). No one was sure that events like these, particularly the lowball variants, could even be shown on TV in a manner that made sense. Perhaps the biggest problem was that each broadcast of a non-hold 'em game would need to teach the game to the audience, a daunting task for some of the more esoteric games.

But to Harrah's credit, they took the plunge, as did ESPN. The 2004 WSOP broadcasts were esoteric but instructional (which, as ESPN found, is good if you have a poker audience, but not this early in the boom), and included an extraordinary range of games. In addition to 'specialty' events like the $1,000 buy-in No Limit Hold 'em Ladies' Event, ESPN and Harrah's produced and broadcast events featuring Pot Limit Omaha, Seven Card Stud High, Limit Hold 'em, Razz and even Kansas City Lowball (Deuce to Seven Lowball, single draw, played no-limit).

I have to admit that I was very skeptical about these shows. And I was proven wrong - they were surprisingly popular, possibly as a result of final tables like the $5,000 rebuy Kansas City Lowball event. This table of seven included Howard Lederer (2 WSOP bracelets at that point), Chris Ferguson (five, including the 2000 Main Event), Barry Greenstein (who would win the first of his four in this event), Steve Zolotow (not as well known as the others, but should be, with two WSOP bracelets), Chau Giang (three) and Lyle Berman, founder of the World Poker Tour (three). The game itself might have been obscure and confusing, but the players were smart and entertaining, and it made for good television.

[Note: despite respectable ratings for the non-hold 'em events, this was the only year in which ESPN broadcast this many of them. As it was explained to me, the combination of more expensive production and some confusion on the part of viewers convinced them to focus on hold 'em and Omaha (although they did broadcast some Stud events moving forward).]

Harrah's made the decision before the 2004 WSOP to seek high-end sponsors for the event, something Binion's never had the marketing savvy to consider. This was the first ambitious step towards making the WSOP a top-tier sporting event. Many of us laughed at their first sponsor - the prescription erectile disfunction drug Levitra. The range of Levitra jokes seemed limitless - "please hold up, please hold up," "I've got a big one!" - but the truth is that with Levitra, Harrah's reeled in a deep-pocketed sponsor in GlaxoSmithKline and set the stage for even bigger sponsorships as the WSOP grew.

One of the most common criticisms of Harrah's and the WSOP in the years since 2004 has been that, while they have landed high-end sponsors willing to spend millions (GlaxoSmithKline, Milwaukee's Best, Jack Link's Beef Jerky and others), they haven't shared this largesse with players, who put up their own money to play in the WSOP. This is an oddly misplaced criticism. The WSOP grew astronomically from 2004 (2,576) to 2006 (8,773), and even at 2014's lower numbers (6,683) it's still the largest prize event of any kind anywhere in the world. This didn't happen by accident. Harrah's poured tens of millions of dollars and the effort and time of thousands of people to make the WSOP the monumental event it is today. And this, in turn, created massive opportunities for poker players, both in WSOP events and in the thousands of other tournaments and cash games that now happen in conjunction with the "WSOP season."

Here's an example of a savvy decision Harrah's made back in 2005, the first year that the WSOP was played at the Rio (other than the final table, which was at Binion's one last time). They gave the Rio Convention Center to the WSOP, knowing that they were likely to see 5,000 or more players in the Main Event. But in addition, they dedicated 60,000 square feet of convention space to the (somewhat unfortunately named) WSOP Lifestyle Expo. The Expo was a trade show for the poker business - online sites, clothing companies, chip and card makers and dozens of other companies showing off their wares during the first few days of the Main Event. And they did participating companies a huge favor by routing all WSOP traffic through the Expo area before reaching the gaming floor, ensuring that every player and spectator at the WSOP was exposed to the Expo floor.

And the floor was, in fact, pretty compelling. Almost every online site was represented in a big way. Bodog, for example, had a two-floor booth featuring Calvin Ayre's Harley-Davidson on the first floor and a gigantic bed, complete with models in nighties, on the second floor (I understand there were pillow fights involved, but I have no personal knowledge of this). The Expo became a gigantic, excessive party celebrating the peak of the poker boom.

Everyone benefited from this smart marketing by Harrah's. While floor space was quite expensive, the sheer volume of traffic (estimated at 30,000 people per day) made it a winner for vendors. Spectators and players alike loved it, since they were able to find WSOP souvenirs, chips, cards, books, table covers, poker tables and pretty much anything poker related all under one roof. And it raised awareness of poker even higher than it already was. It was the Ringling Brothers of Poker, a true circus atmosphere for a game that richly deserved a giant, gaudy party.

Viewed from the outside, it's easy to second-guess Harrah's decision to buy the WSOP and market it - they cherry-picked the best poker property in the world and commercialized it. But the massive investment they made in this property is only a slam-dunk when viewed from the present. Harrah's took a huge risk, both financially and in reputation, by taking on the WSOP. The World Poker Tour had momentum, attention and money, and the WPT Championship (a $25,000 buy-in event) was growing at a similar rate to the WSOP Main Event. But Harrah's made the WSOP a global property, and a global brand, through smart marketing.

If you read this blog regularly, you know that I am not Harrah's (eventually Caesar's) biggest fan. If you want an example of the sort of torture we endured from Harrah's back in the boom days, read The Girl with the $16,000,000 purse. But the truth is that Harrah's saved the world's foremost poker tournament from obscurity, and then turned it into every poker player's dream. And for that, all poker players, even me, should take our hats off.

Friday, July 18, 2014

How Caesars saved the World Series of Poker (Part 1 of 2)

[Author's note: I have received many emails, tweets and texts about my last post, which excoriated Caesars for its management of the World Series of Poker. One thing that I need to make crystal clear: I no longer work for PokerStars, and have no dog in this hunt. My reactions to Caesars' WSOP issues is partly personal (as a player) and partly professional (as a marketer). As I left PokerStars many years ago - in 2007 - none of my comments are biased by my position as a competitor. In fact, since I would have had no credibility, I would never have written any of this during my tenure at PokerStars.]

A few weeks ago, I posted a story entitled "Six ways Caesars screwed up the World Series of Poker," which has become the second most popular post on this blog (after "Armadillo Tim and the Threat of Death," which has now had almost 50,000 60,000 page views). I've gotten more emails about this story than any other. The story came mostly out of my frustration with Caesars' lack of understanding of their players. I have no problem with the blatant commercialism of the WSOP, as some have suggested; it's not a religion, it's a game. Commercialize it all you want, Caesars - just remember who brung you to the dance.

There are two sides to most stories, and there are two sides to this one, as well. This time around, I want to give Caesars (then Harrah's) credit for rescuing a storied franchise from what might have been obscurity.

The WSOP has been around since 1970, although arguably it really started in 1971 - the 1970 WSOP consisted of seven players, who played cash games and then voted Johnny Moss as the champion. It was the brainchild of Benny Binion, legendary gambler, entrepreneur and convicted murderer, who never lacked clever and creative ways to draw attention to Binion's Horseshoe. Prior to the WSOP, Binion's primary claims to fame were its display of $1 million in cash (a hundred $10,000 bills, at the time the largest private collection of the rare bills) and Benny's willingness to take a bet of almost any size.

[Historical note: before you email me to suggest that the famous heads-up match between Johnny Moss and Nick "The Greek" Dandalos was the third notable event at Binion's - most historical accounts agree that the match probably took place in 1949, two years prior to the opening of Binion's Horseshoe. It was most likely played at the Las Vegas Club, in which Benny Binion had a significant interest.]

The WSOP began as an event for the world's elite poker players. The $10,000 buy-in Main Event grew very gradually from its inception in 1971 through 1983, when Eric Drache, cardroom manager at Binion's and tournament director for the WSOP, came up with the ground-breaking concept of satellite tournaments, in which players could play for much smaller amounts, as low as $200, and win entries into the Main Event. This boosted WSOP Main Event entries in a big way - from 1983 to 2002, entries in this prestigious event grew from 108 to 631.

2003 saw a huge jump in registrations, owing almost entirely to online poker sites like PokerStars and PartyPoker contributing substantial numbers of entrants. When cards went in the air for the 2003 Main Event, 839 players had registered, nearly eight times the total number of players in 1983.

The 2003 World Series of Poker kicked off the poker boom in earnest. I won't retell that story here; if you've been under a rock for the last eleven years, you can Google "2003 WSOP" for more information. You can also find a number of my stories from that year in these prior posts:

Dancing with Moneymaker
How Olof Thorson broke my heart, and made history
2003 WSOP: The last lap to the final table
Poker's tipping point: the 2003 WSOP final table
How the Moneymaker Effect almost didn't happen

By January 2004, poker rooms all over the world were operating beyond capacity. Casinos in Las Vegas that had shuttered their (largely unprofitable) rooms years ago reopened. The World Poker Tour and the World Series of Poker TV broadcasts were returning astounding numbers. It was a unique time to be in the poker business...unless you were Binion's Horseshoe.

For years, Binion's had been in trouble with the IRS and the Nevada Gaming Commission for a wide variety of offenses, including non-payment of taxes, non-payment of pension and insurance benefits, allowing barred individuals on property (including Nick Behnen, the husband of Becky Binion Behnen) and failure to maintain regulatory minimum cash balances. So it was disturbing but not shocking when, on January 9, 2004, a joint task force composed of IRS agents, federal marshals and representatives of the NGC stormed Binion's and shut down the casino and hotel.

Everyone wondered if this was the end of the storied World Series of Poker, but we only had to wait two days to learn that the legendary tournament would, in fact, survive. On January 12, Harrah's Entertainment, Inc. (the predecessor of what is now known as Caesars Entertainment) announced that it had acquired Binion's, would take full responsibility for its debts, would reopen the casino and would conduct the 2004 WSOP. 

Uneasy weeks passed with Binion's remaining shuttered. Harrah's made reassuring statements, but it was unclear what the impact would be on the WSOP and the Binion's property. As Harrah's delved more deeply into the assets of the troubled property, they made a shocking discovery: not only did Binion's not own the land on which the Horseshoe resided, portions of it were owned by nearly 100 separate entities, some individuals and some corporations. These entities has all signed 100-year leases which were now called into question as a result of the raid and subsequent acquisition.

Harrah's never intended to maintain ownership of Binion's. Within days of the January 12 deal, rumors circulated that Harrah's intended to sell the casino to MTR Gaming Group, owners of the Speedway Casino in North Las Vegas as well as two out-of-state racetracks. On February 20, details of the mess with land leases emerged, as did more information about Harrah's plans - they had agreed to operate the casino for MTR for one year, with two one-year extensions, and would keep the WSOP downtown until 2005, the year of Las Vegas' Centennial. 

Some light peeked through the end of the tunnel on March 4, when the Nevada Gaming Control Board and the Nevada Gaming Commission, who had worked with unprecedented haste, approved the sale of Binion's to Harrah's and MTR. The land issues still hadn't been worked out, though, and Binion's remained closed. The land problem appeared to be getting worse, though, with rumors (later found to be true) circulating that a single landowner holdout was demanding a massive payout.

And just as suddenly as Binion's closure, the logjam broke. Details are hard to come by, but on March 28, just weeks before the 2004 WSOP, the sale closed, and three days later (yes, on April 1), Binion's reopened for business. The 2004 WSOP would, in fact, happen, and its growth from 2003 would stun the industry, and perhaps Harrah's most of all.

Next: Harrah's turns the WSOP into a franchise

Sunday, July 6, 2014

The most fun you'll have playing poker this year

I've been playing poker for more years than I really want to think about. I've played in home games, casinos, poker rooms, parties, even hospital rooms. I've played in tournaments and cash games, live and online. So when my friend and fellow poker player Lou Krieger started pushing me to go to a poker convention called BARGE, I couldn't imagine that there was anything I'd experience there that was substantially different.

I was so, so wrong.

Lou started cajoling me about going to BARGE back in 1997, when we were both playing regularly in limit hold 'em games at Hollywood Park. I had several friends that went every year. I finally got a little taste of what I might be missing when I attended ESCARGOT, a smaller version of BARGE held at Crystal Park in 1999. It consisted of about 60 people, all rabid poker players, who were there for one reason: to have fun playing poker.

From 1997 to 1999, I made a substantial part of my living playing poker. One of the unfortunate side effects of playing poker for a living is that the game loses most of its fun aspects - it's a living, not a game. ESCARGOT reminded me that poker can, in fact, be a lot of fun. But it was three more years before I attended BARGE and finally got what all the fuss was about.

[Historical note: BARGE stands for Big August Rec Gambling Excursion. BARGE originated with a handful of members of a Usenet newsgroup, rec.gambling.poker, or RGP, in the early 90s. RGP still exists, although the signal-to-noise ratio is so low that it's no longer a good source of information about poker. But BARGE, thankfully, survived.]

I had started working for PokerStars in early 2002, and during the summer a friend mentioned that there was an opportunity to sponsor BARGE. BARGE consisted of about 200 poker players, a small audience, but clearly an influential one. I seized the opportunity. I didn't attend the entire event, but the organizers gave me a chance to speak a few times (I was giving away nice PokerStars swag). What I saw during the BARGE Main Event convinced me that I had to attend the next year.

There was a surprising number of well-known poker players who were part of this group. I recall seeing Andy Bloch, Chris "Jesus" Ferguson, Russ Rosenblum (fresh from his WSOP Main Event final table appearance that year), a few members of a group of crazy gamblers called the TiltBoys and other recognizable faces. As I watched these guys and the rest of the community play, I realized that I was watching world-class players playing a $100 event with just as much intensity as they played in the WSOP.

Shortly after the Main Event started, I heard some applause start, and eventually it became cheers and loud applause. I asked someone what that was about, and he told me that someone had just busted out. A BARGE tradition is to applaud players as they bust out, and it's done in an almost entirely sincere and respectful way. The first bustout seems to get substantially more applause, ostensibly because the rest of the group is relieved not to be out first.

As I walked around the tables, I noticed that many players had one or more trinkets on the table, and I'm not talking about card cappers. There were stuffed animals, CDs, DVDs, pieces of jewelry, shot glasses, goofy Las Vegas tourist items - and no common thread. I couldn't figure out what this was all about, so I asked, and learned about another BARGE tradition.

"Those are bustout gifts," another BARGEr patiently explained to me. "When a player busts out of the Main Event, he or she gives the bustout gift they've brought to the person who busted them." I found this charming, and oddly moving. It showed respect for the game and the other players, something sorely lacking in the games I was used to.

BARGE is held at Binion's in downtown Las Vegas. It's been moved around a few times, mostly because of the problems Binion's had in the mid-2000s, but it's been at Binion's consistently since 2007.

2003 was my first year as a real member of the BARGE community. The 'formal' part of BARGE consisted of a handful of tournaments, mostly games I knew - there was a Tournament of Champions format event (limit stud, limit hold 'em, limit Omaha High/Low), a California Lowball event, a video poker tournament, a few others that I don't recall and a No Limit Hold 'em "Main Event." None of the tournaments had buy-ins higher than $100; if I recall correctly, my total outlay for all of the tournaments I played was about $300.

When tournaments weren't going on, there were non-stop cash games, some the usual limit hold 'em, some pretty unusual. That first year, I learned one new game, a bizarre variant on Hold 'em called Chowaha. Chowaha is usually played with two cards, just like Hold 'em, but you have to use both of your hole cards. The dealer then deals three flops, after which there's a round of betting. Then there are two turns and one river, each followed by a betting round. At the end, the board looks like this:


You can play any of the three flops. If you play the top flop, you can play the top turn card; if you play the bottom flop, you can play the bottom turn card. If you play the middle flop, you can choose from either turn card, and in any case you use the single river card.

Over the years, many additional strange games have been added to the mix, some with obvious names (Second Best Hold 'em), some with entirely inscrutable names (Scrotum, which is played either N or N-2, Oklahoma). I was even involved in the creation of one of these games - Binglaha, which is Pot Limit Omaha, but whether you're playing high-only or high-low is determined by a die roll after the flop betting is complete.

In addition to the scheduled events, there is a wide range of unofficial, sometimes ad hoc events. There's a midnight $1 craps crawl. There's a breakfast at a classic Las Vegas place called The Egg and I. There's a sushi dinner, and an Ethiopian dinner. There's a Fun Run (although what's fun about running in 100 degree Las Vegas heat is beyond me). There's a cigar smoking/bourbon tasting event. And new things spring up all the time, shaped by the varying personalities of the group. 

And there's a notable appearance of anarchy that I have always found particularly charming. There's no registration desk - you pick up your badge from the desk at the poker room. There are no opening or closing ceremonies. BARGE starts when people arrive, and ends when they leave. It's very well-organized, but the machinery is so well hidden from attendees that it appears to run itself.

Since 2003, while Sharon and I have been inconsistent about taking vacations, the one week we always take off is the first week in August. It is, without a doubt, the most fun I have playing poker all year.  I can't recommend BARGE highly enough - many of my closest friends have come from this group, and while we may only see one another once a year, it's during a week of a game we love, playing for bragging rights and pure enjoyment.

If this post has developed as an obvious ploy to promote BARGE, I offer no apologies. Come join us. You'll thank me. You can register for BARGE by clicking here. [NOTE: this link was changed to reflect the correct 2015 registration page.]

And make sure to come find me. I'll be the bald guy playing Binglaha.