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.

3 comments:

  1. Hey Dan, is your bozo'puter not working again? St. Jude's children's hospital thanks you for another donation :)

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  2. Its been over a month now Dan. Not too worried about the donations, but I would really love to read more of your stories!

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  3. ditto! Love the stories and hoping for more (especially since LvL forum on 2+2 has gotten a little slow)

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