Why Are So Many Casinos Taking out Poker Rooms?

Why are so many casinos taking out poker rooms? The remaining -- South Point, Orleans, Red Rock -- are packed all the time.

Ever since poker came to Nevada, poker rooms have battled for casino floor space. Even Benny Binion’s wife, Teddy Jane, hated to move her beloved slots off the casino floor to make room for the World Series of Poker.

Taken in a vacuum, poker rooms earn significantly less per square foot than other casino offerings. The house has no interest in who wins or loses, earning its revenue by raking a set percentage from each pot or charging the players in the bigger games by the half-hour to play. Add in other expenses, such as labor, management, cocktail service, etc., and it’s easy to see why poker isn’t a major money maker for casinos.

So why offer poker at all? Because it brings people who like to play in the door, rather than losing their business to the poker competition, and while there, many patrons cross over to other areas of the resort, such as staying in the hotel, playing other games and machines, and patronizing restaurants, clubs (when they're open), and other amenities.

While casinos recognize the value poker players offer, many poker players feel they aren't fully appreciated by the casinos. Poker rooms are sometimes placed in undesirable locations within the casino and comps are meager compared to those doled out to players of other casino games. For example, since the house doesn’t have an interest, a poker player could lose $20,000 in a game to another player and instead of being lavished with food, beverage, and room comps, he might be lucky to get a free breakfast.

Prior to the poker explosion of 2003 ignited by the trifecta of the hole-card cam, Internet poker, and Chris Moneymaker’s improbable and highly publicized run to the world title at the WSOP, poker was a dying game in Las Vegas, with sparsely populated poker rooms and casinos cutting back on tables or closing their rooms altogether.

During the poker-mania years between 2003 and poker’s Black Friday of April 15, 2011 (when the government essentially shut down Internet poker to Americans), the majority of Las Vegas casinos opened or reopen poker rooms, as they recognized that the game was in demand and failing to have a poker room would lose potential casino and hotel customers. Poker had a good run in Las Vegas and elsewhere.

However, post Black Friday, the general public lost interest, the poker craze died out, and demand for poker in Las Vegas contracted. Poker rooms were once again shrunk or eliminated. Long-time poker regulars who were finally recognized during the boom years were again relegated to their previous status.

Enter COVID-19. As casinos started to reopen after the painful shutdown, casino executives were desperate to get bodies in the door and on the floor. With the social-distancing limits placed on customer volume and the downturn after the initial strong response on first reopening, casinos were looking for ways to attract business and poker fit one of the bills, especially since California card rooms were closed and Golden State players were looking for a place to play. Many casinos opened rooms with protective measures in place and players, both from California and Vegas locals, showed up.

But that anomaly is ending. Poker is again being relegated to the ranks of passé casino games and until there's a new resurgence for some reason, we suspect that it will stay that way.

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Hoppy Sep-10-2022

Not so fast!

The emergence of casino games, and entertainment, for that matter, are few and far between. They would be considered successful, with half the representation of poker. With casino floor space at such a premium, the consolidation of rooms has as much to do with economic dynamics as with participation.

gaattc2001 Sep-10-2022

A great analysis of a timely topic...

We switched to poker when blackjack became unplayable. For years we alternated between sports-bar poker at home; "off-strip" Las Vegas resorts; and Laughlin. There was still enough playable video poker to get comped, and other attractions made the whole package viable.
Then came the decline. Our favorite room in Laughlin closed, leaving only one good one--and that one's declining, too. Our Las Vegas comp points disappeared in the pandemic, so we haven't been back in over two years now. Our two favorite places are still there, but it isn't worth going several times and paying all those fees to rebuild the comps; especially with all the other negative things I'm reading about Las Vegas these days.
OTOH, here at home poker is very big; they're actually planning more local casinos; and one thing holding it back is a shortage of dealers.
I used to say that when gaming went completely down the tubes, I might go back into politics; but two weeks ago, I signed up for dealer school.
Cheers.

Jackie Sep-10-2022

Are you kidding me?

Poker existed centuries before any other form of gambling.
Poker will exist for centuries past the death of casinos.
And yes, casinos are currently committing slow suicide the same way all greed does.

California card rooms made more profit from card rooms than any casino ever did from any casino game.
Nevada and other casino States rigged the rules so that poker in casinos could not profit as well as California card rooms.

Point in fact is that casinos had to provide dealers.
Card rooms allowed the players to take turns dealing, each big blind dealt the hand.
Casinos regulators feared cheating by card sharks.
Card room supervisors and pro card room players learned how to spot cheaters.

Card room chips were allowed to pay for food and drinks plus tipping wait persons.
Casinos take comps only or you paid out of your pocket (chips not allowed).

The pot rake or time collected was lower in casinos than in card rooms.
Casinos had game buy in minimums, card rooms didn't.

Roy Furukawa Sep-10-2022

I’m Doubtful of the Value

I wonder if most poker players actually provide that much value to the casinos. I think most of the high end ones just like the name brand players to frequent their casinos and the lower end ones probably have a tough time to realize any value for the real estate used for a poker room.

dblund Sep-10-2022

The corporate mindset

I believe the start of the answer is spot on to the realities, but I would go a step further.  I think the corporate decision makers these days don't go beyond what the data says is the answer - slot machines are making more per square foot than the poker room, so yank the room.  It's easy to put those numbers in a report and show the executives and shareholders how you're making changes that will improve profits. This must look a quick and easy step, even if it is incomplete and flawed logic.

I travel to LV 4 to 5 times a year to primarily play poker, but generally play a number of different games in whichever casino I am in, with a similar bankroll for 'all other'.  But I travel around town for good poker games and tournaments, but I seldom go  to a casino for those other games if no poker.  So when the Mirage closed their room, they lost more than my rake.  I no longer stay, eat, or play there, nor does my wife who often plays slots where and while I play poker.  (2 B continued)

dblund Sep-10-2022

The corporate mindset (cont.)

Is the Mirage making up for all this lost revenue? (I assume if it is true for me, others have left as well; I'm not that unique.)  Their old poker room is housing maybe a couple of dozen  slot machines, but are they bringing in the new people to maintain the same rate of return per square foot as they were getting before?  Doubtful, as the slots were never that full to start with.  

The unfortunate thing of late is that the travel whiplash effect from the COVID shutdown could be making these look like wise decisions if you only look at the data - 'just look at how much more play we're getting since we closed the poker room!'.  This is the unfortunate type of thinking I have seen way too much of from executives looking for quick and easy answers to complex questions.

I see where some properties are making well run rooms work for them, and hope there is enough competent management to see the value they bring.

Question of the Day - 10 September 2022

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