The Resiliance of Poker
THE WEEKLY SHUFFLE, 2009-03-01, by TwoGun, OzoneA strange thing has been happening over the past 12 months. The world's economy has crashed, yet the poker world is holding up strong. How could it be that businesses left and right are worth a mere fraction of their value from a year ago, including the Vegas casino industry which has lost about 95% of its value, and yet the poker world is enjoying unprecedented participation? Truthfully, we're about as puzzled as anyone. But we'll give a shot to answering that question:
By its nature, poker retains winning participants while alienating losers. When poker was still a growth activity, the turnover rate among participants was very high. Those who initially won stuck around while losers threw in the towel almost immediately.
But poker is no longer growing as fast as it was a few years ago. In other words, most of the people who are playing today are the people who were winners 2-4 years ago. But someone has to lose. One possible reason that participation in the poker world has remained steady is that everyone thinks they're a winner!
Most people participating in poker today were winning players at some point in time. Inertia has a way of making players assume that once they're a winner, they're always a winner. In effect, there has been a "lag" to people's awareness of their true profitability in the game. So basically today's "losers" don't even realize that they're no longer among the winners of the game.
An example of this might be someone like Tom McEvoy. A decade ago, he was a highly respected former World Champion and an author of several reputable poker books. Today, it's possible he's not even better than a "good" online player.
Poker Was Never a Bubble
Anyone who thought that there would be a "crash" in the poker world might have overlooked something: people don't play poker in a constant fashion. They kind of do it "every now and then". This method of participation makes the poker seem stable. For example, the poker world is not composed of one million people who are always playing; it's filled with three million people who play about a third of the time. The theory is that the poker world is comprised of an enormous amount of people most of whom play "from time to time" on a recreational basis while fostering other primary sources of income. This endless rotating influx of participants makes poker seem recession proof.
Poker is Cheap Entertainment
There's a simple explanation for why low stakes games have remained popular: they're cheap. Even people who know full well that they are bad at the game can still justify playing if it is for a paltry sum. A player who loses 4 big bets an hour at $.50/$1 is only giving up $4 an hour. Paying that much for entertainment is way cheaper than the alternatives of high-vig casino games, strip clubs, ultra-lounges, and vacations.
A person whose back is completely against the wall financially might actually view poker as a good thing to spend their time on. Rather than hang out with friends and blow a ton of money at a bar, they can play a card game which, at worst, is costing them a nominal amount of value. The start-up cost for this entertainment is next to nothing too; almost everyone has a computer and an internet connection in this day and age.
Satellites epitomize cheap entertainment, with the potential for large winnings. While people may be less willing to pony up $250 for a Sunday tournament, they are still willing to play a $10 satellite. At its worst, the $10 satellite is cheap entertainment for a few hours. The growth in the popularity of satellites means there are plenty of casual players in the main events, which keeps big tournaments from getting too sharky.
In closing, poker has one way or another managed to remain mostly recession proof up to this point. Moving forward, there probably isn't much reason to expect this to change. Sure, there might be a gradual dropoff in the size of the poker economy; but by and large, poker isn't going anywhere.
The Weekly Shuffle is our Sunday column with our observations and commentary on the poker world. Have an idea for an article? Leave a suggestion on the feedback page.
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