Gambling: Now it's grow time

5 July 2010

by Arnold Knightly

LAS VEGAS, Nevada -- Harrah's Entertainment's top executive is not shy about admitting that even he is surprised by the World Series of Poker's explosive growth since 2004.

"I was quite confident there would be a lot more to this than existed at the time," Chairman and Chief Executive Officer Gary Loveman said about the poker tournament his company acquired in 2004. "I could not have imagined that we would have so many participants and so many tournaments as we've come to see."

A look at the numbers shows just how much the World Series has grown since Harrah's took it over in the casino company's acquisition of Binion's Horseshoe and the World Series of Poker brand.

Nearly 65,000 players from 115 countries are expected to participate in this year's 57-event tournament, which runs through July 17. That's up from last year's 60,875 entrants and four times as many as the 14,000 who played at Harrah's first tournament at Binion's in 2004.

The World Series of Poker really began its upward climb in 2005, when Harrah's moved the event to the Rio's spacious ballrooms.

The prize money for the main event hold 'em world championship winner climbed from $2.5 million in 2003 to $7.5 million in 2005. Last year, the winner took home $8.5 million.

Loveman and Mitch Garber, chief executive officer of Harrah's Interactive Entertainment, also credit the World Series of Poker's growing popularity to television's interest in everything poker.

ESPN has become a looming annual presence at the World Series of Poker since the network aired its first Main Event in 2003.

The sports network's contract with Harrah's calls for 32 hours of the Series to be aired on ESPN and its sister stations starting July 27.

In August, ESPN Disney extended its contract with Harrah's through 2018. Financial terms of the deal were not disclosed.

The gaming giant is doing everything it can to boost interest in the World Series of Poker, too. It hosts 11 satellite events at some of its other properties each year.

And the company has taken the World Series of Poker brand international.

A World Series of Poker championship event is held in the United Kingdom every year, awarding the only World Series of Poker bracelet outside Las Vegas.

The company plans to host a series event at its casino in South Africa next year.

Domestically, Harrah's uses the World Series of Poker to brand many of its poker rooms.

The tournament's explosive growth has also served as a "catalyst to our business everywhere," helping lure a new generation of players to the company's casinos, Loveman said during an interview discussing the tournament's growth and future.

"It was clear that if you could put this product into our network this was a game that was particularly appealing to a younger audience," Loveman said. "That's something this industry needs."

Harrah's believes there is still room for the World Series of Poker to expand to new countries. But the Internet may be the company's main target now.

"There can be no more exciting place to be trying to move online from offline than Harrah's," said Garber, the former CEO of Gibraltar-based PartyGaming who was hired by Harrah's in May 2009 to guide the company's expansion overseas and on the Internet. "I had run a large online gaming company. The next logical challenge was to help a large established offline gaming company move online."

Harrah's already offers online poker in the United Kingdom, where it is legal. And the company is planning to expand into France and Italy, where the governments have legalized online poker.

Harrah's is lobbying to legalize Internet poker in the United States, too. The company has backed a bill by U.S. Rep. Barney Frank, D-Mass., that would establish a framework to permit online gambling operators to accept wagers from U.S. residents.

Loveman said Harrah's is focused on the issue of online poker, not online casinos.

"Harrah's ambition is to the legalization of online poker and our attention is focused on that subject," Loveman said. "The company works hard to make sure the messages don't get confused."

Even though the American Gaming Association estimated $5.9 billion was wagered by U.S. residents with offshore online gambling companies in 2008, Loveman said he wasn't surprised that online gaming hasn't been legalized in the United States.

"If you were to do a poll of the American public and ask if adults should be able to go play poker online, in their homes, if they wish, the answer would be overwhelmingly favorable," Loveman said. "That, of course, is not the group that decides. It's elected officials responding to a whole much more complicated set of issues. That's the challenge and frustration."

This year's tournament culminates in the 41st World Series of Poker Main Event, the $10,000 buy-in Texas hold 'em championship, which begins Monday.

The tournament runs through July 17, when the final table of nine will be seated. The group will return to the Rio in November to play for the title.

The Main Event is expected to draw nearly 6,500 entries, the same number as last year.


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