Neil Channing
Wednesday, 3 September 2014
Gambling season, UKIPTs & the cash vortex.
Gambling Season
I know from my many years running Black Belt Poker that, whether live or online, the seasons have a massive effect on card rooms. In six years of running our small online card room, we never had a better time than when the country was covered in snow, the roads were desperate, and people couldn't get to work. Unless it's an emergency, stay at home and play online poker, the government urged people. And that is what they did.
On the other hand, being stuck in playing a few tournaments and some Sit and Gos just cannot seem to compete with BBQs, trips abroad, the kids being on holiday and the beach looking appealing. Most of the sites drop their guarantees during summer, and the live card rooms just accept that it won't be so busy. You can try running promotions to encourage extra business, but they just don't seem to work. If you throw in the World Cup and the fact that for two months half the poker players in the UK seem to be in Vegas, then it's easy to see that you just can't fight it.
Poker players always do things upside-down – going to bed when others are waking up, having their leisure time when everyone else is off to work, and spending their weekends staring at a computer screen while others are having their two days off. This topsy-turviness is especially true for September; when the rest of the world is trudging back to school and the office, poker players come out of hibernation.
Having talked last month of the clash between the Sky Poker UKPC at Dusk Till Dawn and the Grosvenor Goliath at Coventry (both of which managed to pull in enormous numbers, by the way, perhaps attracting a slightly different group of players), I am shocked and surprised that I can't see a £1,000 event in the UK or Ireland in this most pivotal of months.
The GUKPT is still a tour with one event a month but, as well as counting the Goliath as one of their events, the tour has just four venues where the buy-in is £1,000 and the guarantee £200,000. They know that outside of Luton, Blackpool, Manchester and London they will struggle to get the numbers, so they focus on those four venues with London also getting the £2,000 buy-in Main Event. I don't really blame them, and the fact that those bigger events are split between a couple at the start of the year and a few at the end shows they do understand their business. Even with a £500 entry and the chance to re-enter, Grosvenor have had to fork out with overlays when the provincial venues have not hit the £100,000 guarantees.
My prediction for the smaller Leeds leg this month is that it will struggle to beat its guarantee, that it will be a tournament mostly contested by locals, and that not too many pros will travel. Maybe the two venues that look like they might have a chance with a £1,000 entry could have had a go, and the tour could have gone to Reading or Brighton this month.
While the GUKPT are having a nice quiet month, you might spot an opportunity for the UKIPT to step up and fill the gap. They haven't had a tournament since June, though, and that was held in Spain.
I can understand why they want to hold an event on the Isle of Man. That is where the PokerStars HQ is, and it must be great to be able to hold all their meetings with the sponsored pros and talk to them about how they are not renewing their contract, without having to pay to fly them to London for a half-hour chat. They also get to involve all their staff who are based on the island, and they have less of the problems with the licensing of venues than they get in the UK. Personally I think the whole idea of a UKIPT being on the Isle of Man, a place that most people could not point to on the map and a place that is expensive and hard to get to, is totally self-indulgent, but it's their tour and their money and if that is what they want to do, then good luck to them.
I can only imagine that the need to get the foreign members of team PokerStars to their meetings is the only reason why the UKIPT Isle of Man, the UKIPT London and the EPT London all run together in an orgy of poker which will leave most of the UK's recreational players disinterested in the first event, and skint by the third one.
The tour this year had just seven legs, two were in Ireland, and only three were in England with two of them at Dusk Till Dawn. It doesn't really feel like it's a chance to tour round the UK playing poker. I appreciate that getting the venues is very tricky, but I do find some of the decisions puzzling.
The Cash VortexYou might wonder why I seem to be banging on so much about these tours and the way they schedule their events. I haven't really played too much poker this year, and the main reason is that there hasn't been too much to attract me. You might say that that is no real loss to the industry, and that poker can manage just fine without me, but there must be a lot of people out there who would like to play £1,000 events who just can't see them on the schedule. Look at the two Sky Poker UKPC events at Dusk Till Dawn. With a lot of qualifiers from both Sky Poker and the Dusk Till Dawn online satellites, as well as those held live, these two events got a decent number of players in before the weekends arrived. They then did a great job of beating the very ambitious looking guarantees that Rob Yong at Dusk Till Dawn went for. Both events were brilliantly run, had a massive prize pool, and have immediately established themselves in the calendar.
One reason that I personally believe lies behind this success will likely not be noticed by many people.
Poker, as we know, is not a nil sum game. That is to say, although some win and some lose, the total won by the winners is not the same as the total lost by the losers. The difference is the money that leaks from the system every year. Those leakages come in the form of rake, tips and expenses. Lots of stuff is written about the first two items when discussing how hard it is to be a professional poker player, but very little time is given up to thinking about the third item and over a year it's almost always the one that makes or breaks a year.
Think about it...Say you play 50 live tournaments a year with an average buy in of £1,000. If you cash in 12 of these for a return of £100,000, you'll have had a pretty decent year. The "juice" to the house for playing those events might be around £5,000 – a fair old chunk of your profit, but not too bad considering how much these events cost to put on. Tips might take another £3,000 if they have a small-print thing saying they've taken £3,000, or it could even be more if they come at you with the disgraceful practice of asking for more when they've taken 3% already.
Have a think about how your bottom-line is going to look if to play those 50 events you had to take eight return flights and stay for 30 nights in hotels. Now think about whether you stayed in £50 hotels or £100 ones. Then have a think about all the bottles of water at eight euros and burgers at twenty five euros, and tell me how anyone playing these tours is making money.
In the UK, we have seen a general drop in the average buy-in: players have flocked to the very popular 25/25 events for £200 with re-entries at Grosvenor casinos, and the Genting Poker Series with its £400 main events. I think that one of the main reasons that these have been so popular is not just the reduced buy-ins (compared to the £1,000 that used to be the norm) during tougher economic conditions, but the chance to play an event without clocking up the expenses.
These smaller events attract people that jump in the car and drive for an hour. If they make Day 2, they drive home. Those players that do fork out on hotels sensibly choose the later start day, and have just one night of forking out unless they are lucky and make Day 3.
It seems that the players have worked out where all the money is going, but even at these lower levels the events are not really viable for pros. Look at what happens when you min-cash one of these events and receive around £1,000. The money that you have spent on expenses will really eat into that. You need the proportion of a min-cash that is taken up by all the costs of playing to be negligible. The only way to get that is to lower the cost per event by having a festival of a few events at once, to raise the buy-in so the fixed-cost relative to the buy-in is lower, or to make sure all events are attractive just to locals (like the 25/25 Series).
It really seems like some of the companies get it, but some just don't. I can see the reason why the UKPC events have been so popular this year, but I think the gap is there for more of them.