The state of the nation

The metaphor of a glass being either 'half full' or 'half empty' applies to the current state of the American poker industry. Indeed, everything depends on how it's perceived. Some statistical and anecdotal evidence suggests that poker continues to thrive in most markets. However, concerns about the game's future are valid, particularly in light of the recent economic downturn.

The facts in support of a flourishing American poker market are abundant. First and foremost, more Americans are now playing poker in casinos and card rooms than at any time in history. Furthermore, more poker facilities (measured either by number of tables or poker rooms) exist nationwide than ever before. As of January 2009, 28 different states offered some form of legalised live poker, which is another high mark. Also, more tournaments are being offered than in years past. Finally, if major TV networks - including NBC, ESPN, and Fox Sports - are an indication, poker remains not only a trendy playing pastime, but a popular viewing one as well.

But taking an overly optimistic view about poker's current condition would be unwise. Following four years of unprecedented growth, a slowdown now seems inevitable. Due to overwhelming consumer demands, at least a dozen new poker rooms opened in Las Vegas between 2004 and 2007. However, by 2008 the market went flat. Three casinos closed down their poker rooms. Others reduced the size of their facilities. More recently, few changes have taken place. This is mostly due to casino management keeping poker in a sort of holding pattern - taking a 'wait and see' approach to a poker bubble that could expand, but just as easily burst. Casino management's lack of action on the poker question, especially in Las Vegas, was made all the more convenient by financial constraints placed on operations at Harrah's, MGM Mirage and other industry leaders during the final two quarters of 2008. In essence, there was no need to spend money removing poker tables and renovating facilities if new slot parlours would sit just as empty.

Holding steady

The holding pattern seems to apply to two other big poker markets as well - Los Angeles and Atlantic City. After a 15-year period of expansion, little has changed in these large poker enclaves in recent years. Los Angeles continues to bill itself as 'the poker capital of the world,' and rightly so by the unsurpassed numbers of tables and players. But no significant changes have taken place in at least two years at Southern California card rooms. The numbers remain flat, although still immensely profitable. The situation in Atlantic City is more worrisome, though the drop in poker traffic is not nearly as severe as in other forms of gaming.

Contrast established poker markets such as Las Vegas, Los Angeles and Atlantic City with other regions. Poker now appears to be doing best in markets where little competition exists. An informal survey of several tribal casinos throughout the Midwest revealed that most poker rooms are performing well, even as the drop from table games and slots has declined. Virtually all of the casinos offering poker in non-traditional tourist markets (mainly consisting of smaller casinos in the Midwest) are pleased with their traffic and revenues, especially when contrasted with what's happening in other departments.

Then there are new emerging poker markets like Florida and West Virginia, which could very well become poker's next gold rush. Poker revenues at Florida's dog tracks are now reportedly carrying less profitable enterprises. In West Virginia, poker exceeded its first-year projections at racetracks in Chester and Wheeling, which draw players largely from nearby Ohio and Pennsylvania.

But the full picture is not as bright. Some predict the nation's economy will get worse. This is bad news for the casino industry, which is already suffering from a malaise not seen since the aftermath of 9/11. The real question is, what does it all mean for the poker industry? Here are a few predictions...

1 - Poker players tend to be more loyal than other gamblers. They dedicate more hours to their hobby than slot players or table-game players. Less disposable income means some players will play for lower stakes. But traffic in most poker rooms should stay consistent over the next year or two.

2 - Poker revenues should remain strong even in a recession. Even if many poker players play for lower stakes, the house take on these games is about the same.

3 - The demographics of the poker market are very favourable. About four million Americans turn 21 every year (the legal gambling age in most states). This is the new generation of poker players. Old horse bettors are dying out. New poker players are being born.

4 - Few new poker facilities will be constructed. In the current climate, casinos are unlikely to spend resources on what has long been considered a low-revenue producer.

5 - States starved for tax revenues will gradually expand gambling. This could bring poker into several new markets.