The swell of new entrants inflates the prize pool, which in turn attracts even more attention from amateurs hoping to become the next Moneymaker. They are participating in what economists call a “virtuous circle,” a feedback loop that builds its own positive momentum. By 2006, the circle has become so culturally entrenched as to have earned a nickname from the mainstream media: the “poker boom.”
-Jonathan Grotenstein and Storms Reback in Ship It Holla Ballas!
Poker tournaments are always going to be the main staple of televised poker. They are usually (although not always) more exciting to watch than cash games, and tournaments also have a level of competition that cash games can’t match – certainly not in skill level of course, but in the sense that there emerges a clear winner and clear losers. And the World Series of Poker Main Event is the tournament. It’s the event that everyone wants to play and the one that helps us assess the general health of the poker industry as a whole. So I will use the WSOP Main Event for this theory I’m offering.
It’s always been my contention that if executed correctly the largest televised tournaments can achieve a kind of self-fulfilling prophecy of creating for themselves even larger tournaments and larger player fields for subsequent years. I call this the ‘Tournament Virtuous Cycle’ or the TVC.
More succinctly: A large successful televised poker tournament should beget even larger tournaments in the future.
Now this is just a theory, and one that only comes about under certain optimal conditions that I’ll discuss later. Yet it’s a theory I believe in for a number reasons. Those reasons being:
Larger tournaments generate more money for the hosting casino. That’s a simple enough concept. However, that revenue doesn’t come exclusively from the rake and registration fees of that tournament (and in the Main Event alone, the entry fees combine to well over a million dollars).
That money also comes in large part from all the cash the players spend on hotel rooms, food, entertainment, alcohol and what they lose gambling in the rest of the casino. In this particular case, a bigger tournament means more registration fee money for the WSOP, but a bigger tournament should also yield a lot more gamblers and potentially more money for Caesar’s Entertainment and the Rio Hotel and Casino.
Now as more money comes into the casino, more money can be poured back out to the players in the form of better comps, possibly lower registration fees, and numerous other perks. This basic returning economic flow can allow the casinos to give huge incentives to the players funding them. And when advertising dollars are thrown into the mix (which I will address later), there is even more money that can be used to create a better player experience.
I do not know if this is a certainty, but reason suggests that a vast majority of players who cash in the Main Event would make the effort to play in it the following year. Cashing in the world’s most prestigious tournament is a dream come true for many players. And why not try to relive that dream?
The simplest example would be to take the players who make the final table – the November Nine. Those nine players are almost always going to make every effort to return to the event that made them rich men or women. The journey to the final table was surely one of the best weeks of these players’ lives. Those nine individuals are basically a lock to return to chase both the feeling of glory and the millions of dollars they made the year before.
But I would hypothesize that a vast majority of those who cash in the Main Event one year will be playing it the very following year. Similarly, I’d guess that the more money you make from a tournament, the more likely you are to play in that tournament the following year. It’s directly proportional. This seems just as plausible for the Main Event as it does for, say, a $1500 Omaha Hi/Low bracelet event.
So what is the theoretical likelihood a November Niner will play the Main the following year? Probably 99%. Someone who didn’t final table but made a very deep run – like 20th? Maybe 90%. But for those who didn’t cash that number may only be about 50%. It could be even less. (I would be very interested to know year to year how many of the entrants played the previous year). Ronnie Bardah cashed in the Main Event five years running. The chances that he played in it the following year to try to make it six in a row? One hundred percent.
The TVC simply implies that the more players who reach the money, the more players will return the following year. Now this won’t hold true for everyone of course. If Suzie satellites into the WSOP for $200 and min-cashes for $15,000, she probably isn’t a lock to turn around and put up the whole $10k the next year on her own. Plenty of people will cash and not play the tournament again for plenty of reasons. I just feel the more money Suzie makes, the more likely she is to play the following year(s). And the more people who play a tournament, the more people make big money. I feel this is one of the principle reasons for the WSOP increasing its payouts recently from 10% to 15%.
I think a unique ripple effect occurs with these larger player pools. It suggests that the more players who play in the tournament, the more players who will then encourage their family, friends, co-workers and the like to watch that year’s television coverage. These friends and families don’t even need to understand poker, only to enjoy watching someone they know on television. And the more people who watch the Main Event, the more that start playing poker, and the more who may ultimately play the Main Event themselves. This last part is important enough that I feel it should be broken down even further.
An increased viewership creates players. Ask many poker players where they got their start and many say the same thing: that their interest was piqued upon viewing episodes of the WSOP, the WPT, the EPT and the like. And as more people are introduced to televised poker for the first time, a percentage will become interested in playing. (This is where online poker ties in as well. More on that later). Let’s say 1% of people who watch televised poker start playing poker. Then obviously, in other words, more new viewers yield more new players. Now I’m not saying a lot of new players. Obviously, the field size won’t double. But certainly bringing in new viewers to television can do nothing but help participation numbers.
So as the tournament size grows, television viewership also grows (not a lot, but some). When television viewership grows, television shares and Nielsen ratings increase. When that happens we start seeing advertising revenue generated for ESPN, for the WSOP itself, and for Caesar’s Entertainment. So if bigger companies are pouring more money into advertising during the WSOP, that extra revenue can also trickle down to the players themselves. Advertising dollars can eventually lead to better comps, lower registration fees, and sponsorship – basically an overall enhanced playing experience. Suddenly, the event can become laden with sponsors, and the players and the casino can reap the benefits. And such a great experience will surely generate repeat customers.
It almost pains me to think of the ad money that was in place during the poker boom years. The World Poker Tour used to toast with Budweiser. Cadillac was an official sponsor of the WPT. Toyota sponsored the WSOP Player of the Year race. Pepsi sponsored the WSOP Tournament of Champions. There was the Degree All-In Moment. The Milwaukee’s Best Light refrigerator sketches. And many others. These are huge companies that wanted to sponsor poker. And I think if done right, they can come back.
This is a positive feedback loop all unto itself. More players mean a bigger prize pool, which means more players. This principle was best defined during the WSOP years before the UIGEA. The Main Event got more players every year. The money kept getting bigger and bigger and every poker player under the sun had to try to win it. Big name pros such as Negreanu and Ivey have little interest in playing a week-long tournament where first place is only $100,000 (prop bets notwithstanding). But virtually every pro poker player will compete when first is $10 million. And if first was $20 million? Well, you get the idea. This is the whole concept of placing guarantees on tournaments in the first place. Guarantee a giant prize pool, which guarantees more players, which guarantees a giant prize pool.
This momentum-building effect can happen from one tournament to the next or even during the actual tournament itself. In tournaments with multiple starting days, it’s not unusual for word-of-mouth to spread quickly as more players alert their friends to a tournament with great value.
And there you have it – a few of the reasons why I believe in the TVC. However, I believe this principle only comes about under certain optimal conditions. Several factors can lead to the numbers not increasing. But now that I’ve presented a point or two, I would like to highlight the poker boom years as an example of when the TVC works best, when all the pieces are in place and the machine is running smoothly.
Look at the Main Event for the three years most impacted by the Moneymaker Effect: 2004-2006. This was the Golden Age of Poker. And since the Main Event is a barometer of poker health, looking at the participation increase during those years should give us a good understanding of just how well poker was doing.
From 2003 to 2004, the WSOP Main Event increased from 839 entrants to 2,576. A clear result of the Moneymaker Effect and an increase of 207%.
The following year that number jumped from 2,576 to 5,619 – an increase of 118%.
In 2006, the tournament reached its participation highpoint (so far) at 8,773 and an increase of 56% from the previous year.
So before the UIGEA (and a stalling economy) poker’s popularity was clearly charging full steam ahead. Now I’m playing with the numbers a bit but… if the Main Event saw participation increases of 207%, then 118%, then 56% – that means the participation percentage increase was roughly halved every year. (Obviously the tournament field size can’t multiply by three every year). But I don’t think it unfair to say that if things had continued on their previous course, then the Main Event would have seen an increase of about 25% the next year in 2007. And that would have put the total number of entries at around 11,000.
11,000 players – for a $10k buy-in.
It’s a humbling thought to imagine a prize pool of over $100 million dollars, but it almost happened.
And I think it still can.
But as I said before, there are many ways that this plan can go awry. While I think the TVC holds true in a vacuum (much like many a poker hand), several factors need to be in place to keep that vacuum sealed tight. Some of those factors are:
* A strong economy
* The return of online poker
* The return of required-entry satellites
* A return to poker being fun for new players
The Tournament Virtuous Cycle needs a healthy poker economy to flourish. What makes a healthy poker economy? Well, that is what I will seek out in these articles. As always, please comment and debate. Let me know what you think or send me a message telling me how right or wrong I am. Thanks and good luck out there.
Keith Woernle is a writer, comedian, and semi-pro poker player based out of New Jersey. He was a producer for season 10 of the World Poker Tour. He won a WSOP circuit ring in 2011. He likes poker a lot. Follow or contact him on twitter @WoernlePoker.
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