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

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.

Six ways Caesars screwed up the World Series of Poker

Every June, the biggest event in the poker world kicks off at the Rio in Las Vegas. In fact, not only is the World Series of Poker the largest poker tournament in the world, it's the largest tournament of any kind in the world. It's bigger than anything on the PGA circuit, the professional tennis circuit, any circuit. In 2013, the WSOP edged very close to $200 million in total prize money. This number is even more staggering when compared to the paltry $22 million in total prize money in 2003, the last year the WSOP was owned and operated by Binion's Horseshoe.

With total prize money up by almost 900%, how outrageous is my claim that Caesars (then Harrah's) has screwed up the WSOP?

Looking at the WSOP purely from a numbers perspective, the WSOP has been a massive success for Caesars. But don't let those numbers fool you into thinking that Caesars stewardship of the WSOP since 2004 has been all, or even mostly, good for players. A substantial part of the massive growth of the WSOP would have happened regardless of management of the event - you only need to look back to 2005's Celebrity Poker Showdown to realize that anything containing the word "poker" succeeded during the heart of the poker boom. Caesars didn't create the poker boom. They were, I admit, smart enough to recognize its potential, and did use their considerable market heft to bring it more into the mainstream. 

[Note: for a counterpoint to this article, see my later two-part post, starting here: How Caesars saved the World Series of Poker.]

So what exactly did they do wrong?

Following is a far-from-exhaustive list of the mistakes that Caesars has made in managing the WSOP. There are many more; I chose these because they are the easiest to see if you're a first-time visitor to the event, and they're the major irritants that I hear about most from players. These are listed in no particular order.

[Note: in the first draft of this article, I listed eight mistakes, but in re-reading them, I decided that two of them were petty and removed them. I'm only mentioning this because the permalink for this page says "8 ways...," which is how I saved the first draft - the permalink can't be edited.]

1. Prices. The Rio has made it very clear to poker players that they are there to squeeze every possible dollar out of the player. You'll see this the first time you buy a $1.50 banana [SteveB notes that several venues charge $2.50] or a $2.50 bag of M&Ms. 

I don't begrudge the Rio for charging exorbitant prices for swag - that's what swag is for. Be prepared to pay $30 for a t-shirt and $25 for a hat. If you go to the Bellagio gift shop, you'll pay $25 for a hat, too. But many poker players are at the Rio for extended periods during the summer, and at $10+ for a hot dog, their outrageous prices add up.

I'm a little surprised that there hasn't been a player revolt over this. The first year the WSOP was held at the Rio (2005, except for the final table), they tried to charge players for drinks, but that was short-lived as a result of massive backlash from players.

2. Rake. This could be combined with #1. The Rio charges 10% rake up to $5 (vs. the $4 max in their regular poker room), but that's not the bad part. If there is money put in the pot voluntarily, they rake the pot for the full rake, including uncalled bets. For example, let's say you're playing $2-5. One person limps, then you make it $30. Everyone folds. From the Rio's point of view, there is $42 in the pot, and they rake $4, even though $30 of it is your uncalled bet. So the part of the pot that represents money won by you is $12 (the blinds plus the limper), and the Rio takes 1/3 of it.

(Related note: I played $1-3 a few days ago while waiting for another game, and it was in this game that I became aware of this problem. Players in the $1-3 game, for whatever reason, tend to raise a larger multiple of the big blind than in most games, and in this case, a player made it $42 to go. Everyone folded. The dealer took $5 from the player and put it on the drop slot. I stopped him and said, "Is this really the rule here? This player is going to lose $1 because you're raking a bet that no one called." He said yes, and I asked him to call the floor, who happened to be someone I know. The floor confirmed that this was the rule, but in this case chose to return the $5 to the player.)

3. Marginal staff. I'm going to admit up front that this is a tough one. The WSOP drains every poker resource within 400 miles of Las Vegas, and regardless of any criticisms I may make, pulling off 65 bracelet events, hundreds of side tournaments, satellites, cash games and everything else is a Herculean task. I know, because I've done it on a smaller (but still substantial) scale during five years of the PokerStars Caribbean Adventure.

That having been said, Caesars owes it to the poker community, which contributes millions to Caesars during the WSOP, to get this right. For the most part, dealers this year are average, which is a huge leap from prior years. I still saw dozens of dealers who barely understood poker, much less dealing. In a particularly egregious example, I played 5-5 Pot Limit Omaha a few weeks ago with a dealer who came into the box, looked at the game plaque and said, "What's pot limit mean?" We patiently explained, finally telling her that we would just tell her what to do. At the end of her down, she pushed to the top section 10-25-50 PLO game. I suspect she was never heard from again.

Floor staff is a much bigger problem. While I have seen a number of floor people that I know this year, the sheer numbers that the WSOP requires creates situations in which inexperienced floor staff make offhand, incorrect decisions that can cost players thousands.

One example: a coworker of mine played in Event #1, the Casino Employees Event, and had gone quite deep - when this hand happened, there were about 50 players remaining of the starting field of about 850. He was pretty short-stacked, with about 20 big blinds, and was waiting to pick up a hand. It was folded to him in the hijack, he raised with AKs, everyone folded and the dealer pushed him the pot and took his cards (in that order). The dealer then realized that there was, in fact, an early position limper who hadn't acted and still had cards.

The dealer called the floor. The floor's ruling: since the limper was the only player who still had cards, the pot was his. This notwithstanding the fact that (1) my coworker didn't release his hand until the pot was pushed to him, and (2) about half the pot was already in his stack. The floor had the dealer recreate the action from my coworker's chips and then awarded the pot to the limper.

Aside from this ruling being completely wrong, the floor should have enough common sense to know that this was wrong even if it complied with the rules (which it didn't). At the very least, he should have consulted with another floorman. We're dealing with large amounts of money here, and we deserve way better than this. I spoke with Jack Effel after this happened and he confirmed that the floor made a mistake here.

Related note: I talked to a floorman about a different egregious decision and received a response I can only describe as "tepid." I commented on the fact that floorpeople really should care about these issues, since these are their customers. The floorman's response: "We don't get paid enough to care."

4. Pervasive lack of understanding of poker. Many of the problems at the Rio during the WSOP track back to a simple fact: Caesars doesn't understand poker. Say what you will about Binion's, even in its death throes in 2003-4, but poker was in their DNA. They understood the game and the players, and made decisions accordingly. 

I have dozens of examples, but this is one that goes right to the heart of the problem. Caesars has, for 10 years, chosen to use the table felt to promote various stuff (The Rio, Caesars Entertainment, Jack Link Beef Jerky, etc.). In principle I have no problem with this - it's valuable real estate on display on hundreds of tables, for tens of thousands to see during the six weeks of the WSOP. But if they're going to do this, they need to remember that this is the playing surface on which decisions worth thousands, hundreds of thousands, even millions will be made. I don't think it's too much to ask that marketing on the felt not interfere with the game.

It's been worse in prior years, but this year the Rio decided to add a multi-color, red-white-black "10 Year Anniversary" logo on one end of the table. At some point, someone at Caesars must have realized that they have black chips in play, but decided this was OK anyway. I have seen no less than 20 situations over the past month in which a player at the opposite end of the table was unable to see one or more black chips that were obscured by the logo. This is bad in tournaments, but at least in that case the problem goes away once the $100 chips are out of play. But in cash games, not seeing a $100 cash chip can be a very expensive oversight.

(Amusing historical note: the first year the WSOP was held at the Rio, one of the companies Caesars sold marketing rights to was PartyPoker. They embroidered a four-color logo on one end of the felt. The first time I sat at a table, on Day 1 of the WSOP, I saw this and offered a prop bet to another player - I set the line at 15 minutes before the dealer pitched a card that hit the embroidery and turned over. I got no action. The dealer shuffled and began dealing, and the very first card to pass over the embroidery flipped over. By Day 2 that year, the embroidery had started to unravel on most tables. On Day 3, the Rio replaced them all.)

In a similar case of a lack of understanding of poker, in 2007 the Rio introduced the "WSOP Poker Peek" deck. The first time I saw them, I had two reactions: (1) I like that they're using a large index card (I'm getting older) and (2) these cards are ugly and busy. 




The idea behind these cards is that players like to peel up a corner of the card to look at it, which makes it harder for other players to see. Good concept. But take a look at the sixes and nines:



Someone apparently didn't realize that, in this context, with the numbers tilted, players have no way to distinguish a 6 from a 9. Had Caesars put these decks in the hands of just a few poker players, they would have caught this before they produced over 100,000 decks. The final result: they dumped all of these decks and had an emergency shipment of decks shipped from Kem.

One last fun fact, which really shows carelessness rather than lack of understanding of poker. Here's a larger version of the card back:



In 2006, the WSOP created the position of "Commissioner of the WSOP" and appointed Jeffrey Pollack as its first (and last) commissioner. Jeffrey's name and signature are on these cards, but if you look closely, you'll note that his name is spelled "Jeffery." I don't think there was much chance that these cards would have survived because of the 6/9 issue in any case, but with the Commish's name spelled wrong, they were doomed.

5. Break time clusterf***. I may be hypercritical here, but when you have 5,000+ people in a confined space, there are logistical issues that really need care. I don't know that there's a good way to handle tournament breaks during the huge events at the WSOP - if you have an event with 4,000 players, and there's a break after two hours, 3,500 of those players will still be in, and at least half of them will need to pee (more in the Seniors event). But with breaks of only 20 minutes, there is no chance that players can make it to the bathroom and back. And to make the problem worse, no one has coordinated the breaks of the side events (multi-table satellites, deep stack tourneys) with the breaks of the main events, so it's entirely possible that you'll be lined up with far more players than if there were some planning. In every event I played, we had at least one and sometimes as many as four empty seats when we restarted after the break.

One possible solution: in large events, have two breaks. Table numbers 100-250 go on break now, 251-400 go on break 20 minutes into the level.

6. Hallway gauntlet. This problem got slightly better towards the end of this year's WSOP, due in part, I suspect, to my friend Nolan Dalla's intervention. Caesars has rented out space in the WSOP hallway to a variety of vendors over the years, and I'm not opposed to the idea; many of them have interesting stuff to sell. But most of the time when I'm walking down that hallway, it's either to get to the bathroom or to get back to an event. The last thing I want is to run a gauntlet that looks more like the Spice Market in Marrakech than a hallway at the WSOP. The first few days of the WSOP this year, vendors at several of the booths employed identical tactics to those that solicitors at airports use: "Excuse me, sir, is this your phone?" You look up, the guy catches your eye and now you're stuck. The other one that I heard no less than ten times during the first few days of the WSOP: "Excuse me, is that a Mophie case?" (It's an extended battery for my phone.) When I said yes the first time, I got the beginning of a pitch about how his extended battery was better. I excused myself. A few hours later, same guy, same pitch. Around the 10th time, I said, "Yes, it's still a Mophie case, just like it was when you asked me at the last break, and the previous one, and yesterday."


So given my acknowledgement of the horrifyingly complex logistics of the WSOP, is it fair or reasonable for me to level these kinds of criticism at Caesars? I think the answer is a resounding yes. From tournaments alone this year, the Rio will gross about $12 million in fees. I would guess they snare more than that in rake, although I've never estimated it. Add in food, swag, fees from vendors, ESPN broadcast rights fees and all of the other associated revenue streams, and you have a business that grosses $50 million or more over a six week period, almost all of which comes directly from the pockets of the players. We have a right to demand a high level of service, and Caesars has had more than enough time to get this right.

Are you listening, Caesars?