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05-07-2002, 06:11 PM
There is a thread on RGP discussing tournament participation being down at the WSOP this year. The implication that I read from many participants in the thread is that the decline in tournament entries is proof that the entry fees being raised to 6% from I believe 3% was a bad decision. I just wonder how they figure that. If the number of tournament participants has decreased 15% but the fees have doubled it shouldnít be hard to see that they are at least making a lot more money on at least entry fees. Also Iíve read posts that the side game action at the WSOP has declined but if so by how much and how important is the side game action to the Horseshoe bottom line for the WSOP? I also understand that satellite entry fees have doubled so the same thing applies to them regarding the decrease in demand. I may be wrong about the increase in entry fees so hopefully someone can correct me. I canít believe that the Horseshoe management didnít expect a drop in tournament participation due to the entry fees and side games for that matter when they raised the fees. I would speculate that they thought the increase in fees was planned as a way to maximize profits. Some poster in the thread implied that the Horseshoe was being dumb at it amounted to not knowing Economics 101. Iím guessing that the Horseshoe has a better grasp of Economics 101 than the poster and thus raised the prices fully expecting a drop in demand but a rise in profits. Admittedly I donít know all the details about fees and side game action.

05-07-2002, 07:40 PM
hmmm...fewer games also means fewer dealers on staff, so in addition to increasing gross revenue on a larger margin, they decrease their variable costs at the same time. Not picking sides here, just wondering if ol' Becky has more going on upstairs than many would give her credit for.

05-07-2002, 08:29 PM
You can't know for sure since drop from side games can and should be substantial. Obviously it is off here but by how much? The same goes for all the sattelites. Again there are not as many, but the juice is higher.


My guess is that the tournament will be more profitable for the hosts this year than last, but if it runs out of steam at the end, that could change.


Another factor that poker rooms have to consider when concluding how successful their tournament was is the effect it has on the their poker games after the tournament is over. Usually there is a significant drop. However, in the Horseshoe case, their poker room has already dropped way off from what it once was, so this probably won't matter much anyway.


An interesting side note: I remember reading a post by Badger on RGP about last years Orleans Open where he argued that even though attendance was down they had made a good business decision since they had raised their juice by a lot. I've noticed that he seems to have forgotten that argument when it came to the WSOP.

05-07-2002, 09:18 PM
There is no doubt that the higher fees make this year's tournament more profitable for Binions -- that's why they made the decision and I haven't seen any debate on this point. The guy quoting Economics 101 must be an idiot.


The debate is whether this is a long-term profitable move for Binions as they risk the WSOP franchise by alienating players and staff and opening the door to a Bellagio, Commerce or Tunicia becoming the cachet event. The consensus among informed thinkers is that this risk makes it probably a negative value strategy in the long-term, but that Binions does not have the luxury of long-term profit maximizing policies due to their dire financial straits.


By the way, the $1500 buy-in NL I played in yesterday had 538 entries (I wish it had only been 537). Huge, but more the result of a very attractive buy-in amount combined with a popular NL HE structure than a proxy on WSOP strength.

05-07-2002, 10:56 PM
Why the February tournament at Commerce could one day overtake the WSOP in entries and even prestige.

05-07-2002, 11:58 PM
Even if it does the bottom line is what counts. When Jack Binion ran the Horseshoe and hosted the WSOP from what I understand it was a big money loser. It had all the prestige but it cost millions to put it on at least that is my understanding. The other question I have is that if the side game action is down what are they using the space for now.

05-08-2002, 10:07 AM
.. An interesting side note: I remember reading a post by Badger on RGP about last years Orleans Open where he argued that even though attendance was down they had made a good business decision since they had raised their juice by a lot. I've noticed that he seems to have forgotten that argument when it came to the WSOP. ..


I'm fairly certain that his 'team' is on the sidelines for the WSOP. Wasn't his 'team' manager whining on RGP about the fees? I think many players had it so good during the Jack Binion reign that they've lost sight of the fact that the profit motive is the driving force behind these events.

05-08-2002, 10:15 AM
.. There is no doubt that the higher fees make this year's tournament more profitable for Binions -- that's why they made the decision and I haven't seen any debate on this point. The guy quoting Economics 101 must be an idiot. ..


I agree.


.. The debate is whether this is a long-term profitable move for Binions as they risk the WSOP franchise by alienating players and staff and opening the door to a Bellagio, Commerce or Tunicia becoming the cachet event. The consensus among informed thinkers is that this risk makes it probably a negative value strategy in the long-term, but that Binions does not have the luxury of long-term profit maximizing policies due to their dire financial straits. ..


My question is though has it ever been a profitable event. From my understanding and I certainly could be wrong is that it was a huge money loser when Jack Binion was in charge. Another question I have is what is the franchise value of the WSOP? I mean if it's been a long time money loser how can it be valuable. I'll acknowledge that it may be valuable to another establishment. As Mason pointed out it may bring in more business but is this true and is it the kind of business casinos want (Mason wrote an essay about that). I think it's highly questionable whether or not the WSOP is a significant positive for the Horseshoes bottom line.


..By the way, the $1500 buy-in NL I played in yesterday had 538 entries (I wish it had only been 537). Huge, but more the result of a very attractive buy-in amount combined with a popular NL HE structure than a proxy on WSOP strength. ..


I agree that it isn't necessarily a proxy.

05-08-2002, 07:39 PM
"the entry fees being raised to 6% from I believe 3%"


In prior years there was a stated dollar entry fee for each event. Last year, in addition to those fees, 3% was withheld for "tournament personnel" presumably in lieu of tips. (The disposition of that 3% was controversial.) This year there is simply a 6% entry fee and tipping is ... encouraged.


For most of the tournaments the entry fee is somewhat higher, but not doubled, as compared with last year. For the $10,000 event the entry fee is $600 -- which is the reason I'm not at the WSOP this year.