In Monaco, citizens are forbidden from the local Monte Carlo casino – and the famous venue rakes in only tourists’ dollars, not locals’. No such regulation exists in Australia, so which casinos bring in a home-town crowd?
1.4 million Australian adults (7.8%) gambled on poker machines or table games at a casino—whether locally, out of town, or overseas—within the last 12 months, the latest Gambling Monitor from Roy Morgan Research shows.
The Gold Coast has the highest proportion of local residents who gambled at the home-town casino Jupiters (12.0%), while Sydney has the lowest (3.1%).
Other casinos attracting local gamblers include Jupiters Townsvillle (with 10.6% of residents gambling there in the past year), Crown Perth (9.1%), Skycity in Adelaide (8.5%) and Wrest Point Casino in Hobart (7.1%).
% of residents gambling at home-town casino
Source: Roy Morgan Single Source (Australia), October 2013 – September 2014, sample = 15,431 Australians aged 18+
In the last 12 months, 6.7% of Melburnians gambled at Crown Melbourne, making it the casino with the greatest number of locals gambling there: 229,000.
In Brisbane, only 66,000 adult residents (3.9%) gambled at the local Treasury Casino—but another 56,000 made the trip down to Jupiters Gold Coast.
Angela Smith, Group Account Director, Roy Morgan Research, says:
“After 2013’s stoush in Sydney, Echo Entertainment and Crown Resorts are again competing for the right to develop a billion-dollar-plus casino complex, this time at Brisbane’s Queens Wharf. Both will be pitching the economic value of their proposals in terms of tourism and tax revenue, but the Queensland State Government will also need to weigh up the impact on locals.
“A large proportion of Brisbane’s casino-goers currently head south to Jupiters Gold Coast rather than go to their local Treasury casino. Both of these are now owned by Echo, so competition between the two has not been a concern—but that could well change if Crown gets the go-ahead for the new Brisbane offering.
“Roy Morgan’s Gambling Currency Report provides an overview of the gambling industry, measuring size of total gambling market and its 3 main components: Gaming, Wagering and Lotteries/ Scratch tickets, and changes over time. The report also looks at participation, cross-category participation and internet usage.”
CAESARS Entertainment’s website describes “the world’s most geographically diversified casino-entertainment company”. But it doesn’t have any casinos in Asia, where gambling revenue has exploded in the past decade.
It has been this failure to get a foothold in markets like Macau and Singapore, alongside the 2008 leveraged buyout that crippled the Caesars’ balance sheet just as the financial crisis hit, that has put the casino company’s largest unit on the verge of bankruptcy. Caesars Entertainment Operating was preparing to file for Chapter 11 protection in Chicago overnight.
Caesars’ Asian woes began in 2001 when the business — then known as Harrah’s Entertainment — failed to bid on a licence in Macau, the only place in China where casino gambling is legal. A few years later, it passed on another opportunity, and no permits have been issued since. Chief executive Gary Loveman has said missing that second chance in Macau — where rivals Las Vegas Sands, Wynn Resorts and MGM Resorts International have flourished — was his biggest mistake.
In 2006, Caesars lost a bid for a casino licence in Singapore to Las Vegas Sands. “We’ve looked a lot at that. We had a fabulous bid, we just didn’t have the bid Singapore wanted,” said Jan Jones Blackhurst, executive vice-president of communications and government relations.
Macau is now the world’s biggest casino hub, with $US44 billion ($36bn) in gambling revenue last year. Singapore and the Las Vegas Strip each generated more than $US6bn in 2013. Those Asian markets could have been the lifeline for Caesars that they were for Las Vegas Sands, which had warned of bankruptcy risks during the financial crisis but has since become the world’s biggest gambling company.
Caesars has had to rely on Las Vegas, where gambling revenue has just started to recover after the financial crisis, and on a smattering of smaller properties across the US, including a hub in Atlantic City, where revenue has fallen 45 per cent from its peak in 2006.
The company’s $US22bn of debt after the 2008 leveraged buyout by Apollo Global Management and TPG quickly became a bigger burden than its buyers had anticipated.
Caesars could not keep pace with rivals’ capital spend, said Fitch Ratings’ Alex Bumazhny. He believes the trend will continue even after a restructuring.
Caesars is forecast to outlay $US350 million on capital expenditures annually to 2017, compared with about $US2.5bn it expects Sands and MGM to spend.
Caesars kept trying to find ways into the Chinese territory. In 2007, it spent $US578m on a golf course in Macau with hopes of some day building a casino. The strategy was to “win the ‘hearts and minds’ of the government,” according to a report by regulators in Massachusetts, where Caesars had bid for a casino licence. But it never did secure the partnerships and in 2013 sold the land for $US438m.
At one point, it proposed a line of credit with Macau operators Galaxy Entertainment to facilitate customer play at each other’s properties in Las Vegas and Macau. They also discussed linking customer loyalty programs and offering special privileges at the Caesars golf course in Macau. Another option was forming an alliance program with one of Galaxy’s VIP clubs in Macau. Caesars even spoke with Las Vegas Sands’ top Macau executive about co-operating on some of its projects. “People who were in Macau, they really didn’t need any partners,” Ms Jones Blackhurst said.
Meanwhile, the $US568m purchase of British casino operator London Clubs International in 2006 didn’t amount to much, either. An anticipated change in regulations didn’t go as planned. And at home in the US it failed to get licenses to build casinos in Massachusetts and New York, and it has had to shutter some operations in Atlantic City.
One piece of good news has been a recent casino deal in South Korea. Caesars will have a 40 per cent stake in a $US800m project it is building with a consortium including Indonesian conglomerate Lippo Group.
The resort, due to open in 2018, would not be like the multibillion-dollar projects in Macau or Singapore, but it was the first step in a plan to open a series of branded casinos across the continent, said Steve Tight, Caesars’ president of international development.
Online poker cannot be said to have failed in Nevada, but things are definitely not going well for the Silver State’s online poker industry. The revenue report for November, released recently by the Nevada Gaming Control Board, clearly shows that online poker revenue has continued to decline.
The report says that November’s online gambling win, which includes online poker alone, was $641,000 all over the state. This indicates a decline of 42% when compared to the corresponding period last financial year and a decline of 3.6% from the previous month, which had an online gambling win of $665,000.
Optimistically speaking, the 3.6% decline is the lowest when compared to the revenue drops of the previous months. Online poker revenue has been declining in Nevada for the past five months, but the decline of this month was the smallest. While October’s revenue showed a 4% decline from that of September, September’s revenue showed as 6.6% decline from that of August. The revenue of August was the lowest, indicating a 22.5% fall from the revenue of July, and July’s revenue was 7.6% lower than June’s revenue. June actually witnessed a 20.3% rise in revenue, when compared to that of May.
Another point worth noting is that revenue decline was just 3.6% in spite of the fact that Ultimate Poker pulled down its shutters halfway through November.
With Ultimate Poker gone, Nevada is now home to only two online poker sites. WSOP.com has grabbed the major share of the market. Data on PokerScout.com shows that WSOP.com gets weekly average traffic of 150 players to its cash games. Real Gaming, which belongs to South Point, is not at all doing well. The online poker site had only one player last week, peaking eight players in a 24-hour period.
Nevada is expecting many more operators to launch online poker sites in 2015, but no company has made any specific announcements. 888, the software provider for WSOP.com, has announced plans to launch an online poker network called All American Poker Network (AAPN) in Nevada. The network is expected to comprise WSOP.com, an online version of Treasure Island Casino, and a new gambling site from 888. All these sites would operate on software developed by 888.
Nevada has also signed an interstate online poker compact with Delaware, enabling the merging of player pools. The AAPN may include all the sites that are currently operating in Delaware as they are powered by 888 software.
The Skillfulness of Online Poker Is Leading to its Downfall
UIGEA and Black Friday are the most often cited reasons for poker's decline since it reached its apex in 2006. But these are just the most oft-cited among a myriad of potential culprits.
But what if the major reason poker's popularity has waned has nothing to do with the availability of the game or its legality, and everything to do with the game itself?
Since the rise of Internet poker allowed players to put in a lifetime's worth of practice in the space of a year or two, the game has become a very skillful pursuit, and like chess it's possible that this skillfulness is what is keeping new and casual players from participating.
Correlation does not equal causation
UIGEA is often cited as the jumping off point for poker's decline. The logistical issues the law brought about pushed casual players away from the online poker tables in many people's minds.
For instance, the protagonists of the book Ship It Holla Ballas (some of the best poker players in the world) gripe about the increasing difficulty of the game beginning around this time, and the authors (Storms Reback and Jonathan Grotenstein) rightly point to UIGEA's impact, as the law caused general confusion over the legality of online poker, eroded online poker marketing on TV which made poker shows less appealing to the networks, and made moving money on and off the remaining sites increasingly difficult.
However, I would argue that UIGEA was just one facet of poker's decline in late 2006. The other facet, which may have been even more impactful, was already in motion when UIGEA was signed into law: The constantly increasing skill gap between brand new players and the best of the best.
UIGEA may have been picked out of the lineup as the culprit, but data is starting to suggest poker has a bigger, structural problem lying under the surface.
Data backs it up
A recent report by GamblingCompliance indicates the increasing skill of top players is leading to high attrition rates amongst casual players. And the revenue data suggesting attrition is holding U.S. online poker back is apparently backed up by evidence from operators:
Operators have told GamblingCompliance Research Services that retaining casual players — many of which were quickly beaten by skillful players and have yet to return — has proven to be difficult, or costly, or both."
This is an extremely troubling finding for poker's long-term sustainability.
The ceiling rises
Poker pros have always enjoyed a massive edge over the fish, but prior to the Poker Boom pros were few and far between, and the game's strategies were still being ironed out and far less nuanced than they are today.
To put this in some perspective: On a scale of 1-10, with 1 being a total fish and 10 being perfect play, the pros of 2003 had a ceiling of around 7, and most were probably in the 5-6 range. The fish at the time were swimming around in the 1-3 range.
Also figure that my extremely unscientific scale operates in much the same way as the Richter scale, with each number stronger than the previous by a factor of 10.
By 2007 the ceiling for the best players had pushed well past 8 and most pros were now playing at a level of at least a 7.
Think about that for a moment: The average winning player in 2007 was playing at a higher level than the best players of 2003. And most of the winning players from 2003 would now be losing players unless they improved.
In 2014 the top players are likely above a 9 on my hypothetical scale, and to win a player must be close to an 8.
The floor remains the same
The bigger problem is the casual players didn't improve at the same rate, so the gap between the floor and ceiling of poker skill has widened significantly. New players and very casual players are still somewhere between a 1-3 on the scale - although there are probably fewer 1's at this point thanks to the basic instruction players received from televised poker.
The situation you had in 2003 was one of fish squaring off against players that were significantly better than they were, but these were still players with plenty of flaws in their own game. Like a magnitude 6 earthquake, the pros would certainly cause some damage, but the players they came into contact with would by and large survive and live to fight another day.
Continuing on with my earthquake metaphor, a decade later the pros are an incredible force of nature that leaves a trail of utter destruction in its wake. The skill gap is now at a point where casual players feel hopeless, as the GamblingCompliance report suggests.
Software and training sites add to the destructive power
On top of having more advanced strategies, and the capability of playing more hands, the Poker Boom also brought about software and training sites that allowed players to increase their skills at an almost alarming rate, and further widen the skill gap between the players who were unaware such tools existed.
Casual players and new players basically stood no chance against this ever growing army of skilled players, many of whom, despite their skill are unable to beat the game themselves. Where once they would worry about having two or three skilled players (5's and 6's on my scale) mixed in at their table, by 2007 the online tables were almost exclusively populated by players who would have been winners in 2003, and in 2015 even the penny limit games online are tough to beat.
What can be done?
This is the question the poker industry will have to sort out in the coming years.
Low-limit heads-up and short-handed games (where mistakes are magnified) might have to go.
Structural changes to the games may be needed to decrease the skillfulness of the game - obviously mindful to make sure the game is still skillful and beatable.
Sites may have to adopt policies that protect losing players from the sharks, whether it be segregated tables, cracking down on third-party software, or limiting multi-tabling to force players to move up to higher stakes games to maintain their win rate.
Sites might also switch to a regressive rewards system with loss-back programs.
It's no secret that player traffic at online poker sites has been struggling. The latest traffic numbers provided by PokerScout reveal that cash game traffic is 19% off of last year's pace.
As 2014 prepares to make its exit in a few days and 2015 will arrive, it's time to make resolutions and perhaps express desires of what we'd like to see happen in the online poker industry in the year ahead. Since I am but one lone player and can only improve traffic by increasing my playing time and/or the number of tables on which I play, I have put aside resolutions of my own and instead propose some ideas for others to consider -- those who have more influence on the online poker industry than I.
Here then, in no particular order, are 8 wishes for online poker in 2015.
#1 - DDoS attacks come to an end - The recent Distributed Denial of Service attack that caused cancellation of the Winning Millions $1 million guaranteed tournament on the Winning Poker Network, as well as other sporadic DDoS attacks that hit a number of other sites, are extremely harmful to online poker. Such incidents can cause players to turn away from the game.
In this era of the Internet, where identity theft and stealing passwords has become a lucrative illicit industry, it is not surprising that poker sites are also targeted. Hopefully, safeguards can eventually be put in place to thwart the computer miscreants who seem intent on creating chaos while players wish to simply compete in a game of online poker.
#2 - California passes online poker legislation - iPoker proposals have been introduced for half a decade in the Golden State without so much as a vote on a bill coming into play. While the drama continues and certainly keeps us poker writers employed, the issue really has gotten old.
The approval of online poker regulations in the nation's largest state would do wonders for the industry, both in prompting other states to follow suit and putting the kibosh on the efforts of Sheldon Adelson to wipe out regulated online poker and gambling. This wish for 2015 has perhaps a fair chance of passing, according to some, despite the first 2015 proposal introduced by Assemblyman Mike Gatto that brought out the critics en masse.
#3 - Sheldon Adelson continues losing momentum - The billionaire casino mogul who has waged war on online poker and gambling legislation through his Coalition to Stop Internet Gambling (CSIG) lost considerable momentum in his efforts recently when the Restoration of America's Wire Act failed to make it on the agenda of Congress' lame duck session.
The CSIG has been at it for one year and has certainly had an impact on the industry, putting up quite a fight against pro-online gaming organizations such as the Poker Players Alliance (PPA) and the Coalition for Consumer and Online Protection. But a major victory was won by the pro side this month, deflating some of the air in Adelson's sails.
Although many hope that the 81-year-old will come to his senses and abandon his pursuit, Adelson stated that he is in it for the long haul. To see his momentum and influence continue to deteriorate in 2015 seems a more reasonable wish than to outright hope that he simply goes away. The man has a right to his opinion, however wrong and hypocritical it may be.
#4 - PokerStars gets approved in New Jersey - This wish was supposed to happen in 2014 after Amaya took the reins of PokerStars. But it did not and now is a key for the industry's success in 2015. Rumors circulated that Adelson's efforts played a part in PokerStars remaining on the sidelines until now.
Whatever the reasons behind the New Jersey Division of Gaming Enforcement's lack of a decision thus far, that approved stamp for PokerStars would be a boost to online poker in 2015 and beyond. The top site in the world, no matter how they got there, would bring legitimacy to a market that could use a shot in the arm at this point in time.
#5 - Interstate launch of Nevada and Delaware - This wish, too, was previously seen as a shoo-in for 2014, but has seemingly jumped on the same iceberg that is carrying state-by-state regulated online poker expansion. The Multi State Internet Gaming Agreement was brokered between the two states in February, yet remains tucked away in a file drawer of Nevada Governor Brian Sandoval.
While both states are small in terms of population, and player numbers certainly won't jump through the roof once this historic launch is put into play, the fact that states will combine players pools is a big deal that may work wonders in prompting other state legislatures into action. Of all the wishes on my list, dare I say that this one is the most likely to come true?
#6 - Lock Poker players get paid - OK, I admit I'm stretching a bit here. Lock Poker has shown no inclination toward righting course and paying its players who have been waiting eons for their cashout requests to be honored.
Sites like Lock Poker give online poker a bad name and probably keep a number of players from making the jump from social to real-money play. The chance of this wish coming true? About as likely as Nicole Scherzinger ringing my doorbell and asking if I need some company for New Years Eve.
#7 - Absolute Poker and UltimateBet players not forgotten - It's very probable that former U.S. Full Tilt players will finally all be made whole in 2015 and the remission process completed. Yet still unpaid are the AP and UB players who lost millions of dollars when the DoJ swooped down in 2011 and took aim at offshore poker sites.
No white knight came to the rescue, as was done by the Rational Group in their 2012 purchase of Full Tilt. The PPA previously discussed the matter of reimbursement for AP/UB players with the DoJ in 2013. "UB/AP victims were defrauded and deserve compensation," the PPA's Rich Muny stated back then.
Hopefully, once Full Tilt players have been paid, another look will be taken at the victims who patronized sites on the Cereus Network. The wish of reimbursement in 2015 is indeed a long shot, so I merely desire that AP and UB players are "not forgotten." This may likely continue to be a wish in 2016, 2017 and so on. Reimbursement of some sort could go a long way in restoring faith in a number of players who have disappeared from online poker.
#8 - Recreational players flock to real-money online poker sites - If the previous 7 desires of mine were to be realized, then this one would likely be a natural result. The push is on to make the game more palatable to the casual crowd, yet there certainly is room for more ideas to be employed.
Targeting more women and social gamers in marketing efforts, doing away with poker-tracking software, and finding other ways to attract recreational players is needed in order for online poker to grow and prosper. Let's face it, the poker boom of 2003 is over and the few years leading up to the passage of the UIGEA in 2006 will always be seen as the glory days. But the industry can survive and thrive as long as appropriate changes are made as time goes on.
I'm sure I missed some wishes that could also greatly help the online poker industry, such as regulation spreading to more states like Pennsylvania, New York or Illinois. Or the ultimate wish, that federal lawmakers approve a regulated online poker plan for all states that merely requires an opt in or out in order to participate.
But I did not want to wish for too much, so I tempered my 2015 desires for online poker. I'm saving some wishes for next year.
The New Jersey Online Poker Briefing: "smaulerg" and "Deuxexmachina" Win Big
New Jersey's biggest winner over the weekend was "smaulerg," who managed to top a field of 109 entrants to win the WSOP.com Winter Poker Classic Event #1 $25,000 Guarantee for $11,188.80. According to PocketFives, he is ranked in third place — albeit under the screenname "Mergulas" — and may move up leaderboard after his latest win.
Meanwhile, Kevin "SofcknsicKKK" Campbell finished runner-up in the tournament bringing home $6,793.20 for his efforts.
In other news, Brian "Deuxexmachina" Willis hit it big by beating 274 other entrants to win the partypoker NJ/BorgataPoker.com $50,000 Guarantee for $10,175.15, while "deerpathdave" padded his bankroll by $6,700.23 for finishing runner-up in the tournament.
The big winner on 888poker NJ over the weekend was Stephen "sizzlinbetta" Reynolds, who took down The Big Sunday for $3,379.95. Reynolds, who topped a field of 63 entries, isn't a new comer to the big stage though as he has over $2 million in online tournament cashes.