ALL B&M cardrooms face serious future financial problem

While poker continues to boom a hidden fiscal mess will eventually FORCE major decisions on every manager of a live poker room.

The problem is that while per table costs will always continue to rise (dealer costs, alcohol, insurance, cardroom share of allocated overhead; etc.) the amount of revenue per table is limited. Faced with the eventual overtaking of per table costs over revenues what are the cardrooms' options?

They will be faced with either:

A) increasing revenues (which is very limited as raising the rake too much more will turn away more and more players. Who will play small limit with an $8-$10 rake each hand?) or

B) eliminating the cost of dealers and going to computer screens dealing at each table.

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.

This is a very serious issue which should be at least considered soon or someday in the not tOo distant future it may doom live poker.

[meep_42]

I don't understand how the casino's costs rise appreciably. Dealers are cheap, expendable labor, for the most part. Alcohol doesn't get more expensive, it's pretty fixed in cost.

-d

You are describing inflation. As costs go up, so do prices. Luckily, since wages also go up, the real cost to play poker (indexed to inflation) is the same.

[Jimmy The Fish]

[ QUOTE ]


The problem is that while per table costs will always continue to rise (dealer costs, alcohol, insurance, cardroom share of allocated overhead; etc.) the amount of revenue per table is limited. Faced with the eventual overtaking of per table costs over revenues what are the cardrooms' options?



[/ QUOTE ]

Oh no!

All table games use HU-MON dealers!

All drinks are served by HU-MON waitresses!

Roulette is d00med!

Craps is d00med!

Blackjack is d00med!

Casinos will only have video machines and vending machines!

Panic!

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?

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.

[SNOWBALL138]

I think you are missing the point. When inflation happens, wages rise with in, and when that happens, people start playing higher stakes. In twenty years, 5/10 will be the new 3/6 for example.

[bernie]

[ QUOTE ]
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?

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.

[/ QUOTE ]

Then you also realize that poker isn't the prime source of income for any casinos with pit games or slots.

It's actualy secondary to the guys wife who is out playing slots for 5 hours. Or his buddies who are over at the craps table.

But eventually I can see them raising the rake. Say if you add $1 to the rake of a 10-20 game or higher, it still beats playing 4-8 at a $3 rake.

b

[bernie]

[ QUOTE ]
I think you are missing the point. When inflation happens, wages rise with in, and when that happens, people start playing higher stakes. In twenty years, 5/10 will be the new 3/6 for example.

[/ QUOTE ]

It took only about 3-4 years for the 10-20 here to play like the 4-8s used to.

However, 5-10 may not have as much action as 3-6 because there won't be as many chips in play during a hand. That can actually affect action of the game.

b

[stinkypete]

this is pathetic no matter how you look at it.

if you're serious, i feel sorry for you. if it's a joke... well, try harder next time.

[judgesmails]

[ QUOTE ]
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.

[/ QUOTE ]

So all these expenses are new to poker? Wow, makes one wonder how the casino managers could have overlooked this. Maybe you should consider doing some "financial field" consulting for them. You could really show them something and help them plan for the impending doom.