ALL B&M cardrooms face serious future financial problem

So far it looks like 100% disagreement from my fellow posters here. I wish all those who disagree with me were correct but time will tell as raising the rake high enough to overcome this (with no end to increases in the future) will not be accepted by low limit players. This will lower revenues as fewer players will be willing to pay these amounts. I wish I were wrong about this.

[stinkypete]

[ QUOTE ]
So far it looks like 100% disagreement from my fellow posters here. I wish all those who disagree with me were correct but time will tell as raising the rake high enough to overcome this (with no end to increases in the future) will not be accepted by low limit players. This will lower revenues as fewer players will be willing to pay these amounts. I wish I were wrong about this.

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what makes you think these costs will rise at a rate significantly higher than the rate of inflation?

"Sorry, but you are mistaken. Costs will continue to rise, while revenues in poker (per table) cannot. "

Costs rise because of inflation. Correct?
"
The cost in real dollars will eventually overcome table revenues. Not soon, but eventually it is inevitable. Other businesses simply increase their prices. Poker cannot raise their prices without losing customers as it would be too expensive to play."

Too expensive to do what? To win at? Will players avoid poker because it is a -EV game? Will they instead play roulette?
"
Who will play 3-6 holdem with a $10 rake?
"

Some players probably would. They probably don't know how much the rake affects their bottom line. None the less, this won't happen. Why?

Because as prices increase, the value of money decreases (there is a direct inversely proportional relationship here). Since bigger limits equals higher rake (or a higher capacity for rake) this will not neccessarily kill the game. Why will 3/6 players now be playing 6/12?

Because $100 bucks is now worth $200.

"
Dealer salaries, despite being minimum wage are costly. "

Is this common? I thought most dealers made much more. I don't really know.

"Add their health insurance costs, business liability costs, the cost of the employer tax portions for FICA, FUTA, Workers' Comp for every employee, expenses of operations and maintenance, drinks, the very rare comp, and other casino wide cost allocations (security, porters, cashiers, etc and the total will eventually overtake revenues. " This is really covered above, no need to repeat myself.

"I am sorry to report all this but I work in the financial field and know of what I speak."

Well, I'm sure that's true, but I hope you don't mind if I discuss it with you.

[Spook]

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So far it looks like 100% disagreement from my fellow posters here. I wish all those who disagree with me were correct but time will tell as raising the rake high enough to overcome this (with no end to increases in the future) will not be accepted by low limit players. This will lower revenues as fewer players will be willing to pay these amounts. I wish I were wrong about this.

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what about thirty years ago compared to today? I am sure that there is quite a bit of inflation that happened, yet poker survived.

[Dazarath]

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Sorry, but you are mistaken. Costs will continue to rise, while revenues in poker (per table) cannot. The cost in real dollars will eventually overcome table revenues. Not soon, but eventually it is inevitable. Other businesses simply increase their prices. Poker cannot raise their prices without losing customers as it would be too expensive to play. Who will play 3-6 holdem with a $10 rake?

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The real question is who will play 3/6 hold'em when $3 buys me a tootsie pop? I think you're missing the point that inflation will raise all of the nominal values. The rake will increase, as will dealers' wages, and the stakes as well. Playing in a 2/4 game with $4 rake is no different than playing in a 4/8 game with $8 rake with the value of money halved.

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Dealer salaries, despite being minimum wage are costly. Add their health insurance costs, business liability costs, the cost of the employer tax portions for FICA, FUTA, Workers' Comp for every employee, expenses of operations and maintenance, drinks, the very rare comp, and other casino wide cost allocations (security, porters, cashiers, etc and the total will eventually overtake revenues. I am sorry to report all this but I work in the financial field and know of what I speak.

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You do realize that all of these costs are not new? What do you think the cardrooms did in the past? It worked out before, and unless there's reason to think that minimum wage (in real terms) will quadruple, there's no issue here. You made the bold declaration that costs are increasing, yet you haven't shown any substantial evidence to support your claim.

[steamboatin]

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Who will play 3-6 holdem with a $10 rake?

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Who would ever play a slot machine?

[tubalkain]

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Who will play 3-6 holdem with a $10 rake?

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Who would ever play a slot machine?

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[Slow Play Ray]

I'll make this simple:

Everything is relative.

End of story.

[RunDownHouse]

I suggest re-reading that Econ 101 text you bought back in September. I don't think you have a very good grasp of the concept.

Ask your prof about his office hours.

[Al_Capone_Junior]

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With only those two options it appears that within 5-10 years we will see the end of live dealers dealing the game. The casinos will be forced to choose between overcoming the problem of their ever shrinking profitability per table (it matters not if they have 5 tables or 500 if each is losing money) or the end of live poker.


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Very reactionary indeed. Just like gas. They told us 20 years ago we would run out within 5-10 years. And that the end of the world was coming too. Somehow I doubt it's really that serious.

al

p.s. I've chosen to NOT hide out in a homemade concrete bunker waiting for the end of the world.