Is a rise in online poker causing Nevada’s casinos to shut their poker rooms?

  • Trend for closing poker rooms has been accelerating since the start of 2017
  • Monte Carlo is next to take action as part of a $450 million revamp

It’s happened quietly, but the signs have nevertheless been there. One by one, Nevada’s casinos have been shuttering their poker rooms or downsizing them.

The trend first emerged a decade ago but it’s been accelerating ever since the start of the year. The big question is why?

vegas-poker

The next major casino to consign its poker room to the past is the Monte Carlo, which will be closing eight tables as part of a $450 million revamp, one presumably designed to increase revenue per square metre​ – and in the Monte Carlo’s brave new world there would appear to be no space for poker.

“Casinos added more tables in response to popularity, and once it became less popular, they took away the tables,” says David Schwartz, director of the Center for Gaming Research at the University of Nevada.

That much is evident but it still doesn’t resolve the question of why this is happening.

Let’s look at the data

When you examine the data however, the clues are there. Nevada poker rooms were at peak capacity in 2007. Given that this correlates with the rise in online casinos, it’s easy to attribute this falloff to the birth of online poker. After all, it was only around 2007 that internet infrastructure reached the stage where online platforms could smoothly facilitate thousands of poker hands being played simultaneously.

It was in 2007 that casino poker revenue peaked at $97 million with over 400 tables in play across Nevada. By 2016 that figure had dropped to 320 and revenue had slumped to $78 million. When casino revenue starts to fall, it’s only a matter of time until the floorplan is reassessed, with any rooms not paying their way destined to be the first to go.

A ‘prestige’ game

Poker’s never been much of a moneymaker for casinos due to the fact that players aren’t betting against the house. Compared to the likes of blackjack or roulette, poker simply can’t compete.

Its value, from the perspective of casinos, is as more of a prestige game, one designed to attract big tournaments with guaranteed publicity. That and the fact that once they’re at the poker table, players who exit early may be inclined to try their luck at more volatile games such as Baccarat.

Despite briefly stuttering in 2011 when US officials indicted several major poker rooms in the game’s Black Friday, online poker has continued to thrive and evolve, providing new ways for players to interact and developing innovative mobile solutions that facilitate gaming on the go.

Regardless of how poker stacks up on their balance sheet, the big Las Vegas casinos are unlikely to shutdown their tables any time soon. The demand for poker is too high for that – even if most of the headlines are now being made on the web rather than at the table.

OUR VERDICT

Should we be alarmed by this development? Should we be surprised? Actually, not really. The bottom line is that casinos are always looking to maximise their revenue, that’s their game – end of. And, as a consequence floorspace is at a premium in each casino. Similarly, the trend for many of the larger casinos to become full-blown resorts, complete with restaurants, bars and shopping complexes, has put a further squeeze on that floorspace. When you add in the fact that poker has never been the biggest moneymaker than it doesn’t take a fool to see what is going to be cut down when a reshuffle is on the cards (excuse the pun). What is interesting is the idea that online poker could be behind this. Let’s not forget that online poker has been legal in Nevada since 2014, and there are reports that traffic is growing all the time. It’s not an unreasonable conclusion to suggest that some of the state’s land-based casino traffic has made the jump to playing online. Of course, time will tell if this is the case. Particularly if we see further states across the US legalize online poker and casinos this year. We watch with interest.

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