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Copyright 2004 Knight Ridder/Tribune
Knight Ridder/Tribune News Service
San Jose Mercury News
August 30, 2004, Monday
HEADLINE: Big stakes as many ante in online
By: Sam Diaz
For generations, the poker
room has been portrayed as a smoke-filled parlor
where whiskey-drinking, tobacco-chewing gamblers would rather
shoot you than let you take the pot with a pair of fives.
But recently, the Internet _ and a guy aptly
named Chris Moneymaker _ brought new life to one of the oldest
card games around.
Moneymaker, an accountant from Tennessee, qualified
for the May 2003 World Series of Poker in Las Vegas _ after honing
his poker skills on the Internet.
With only three years' experience in the game, he bested a lineup
of professional players in the Las Vegas tournament, walking away
with the $2.5 million jackpot.
His win, along with the popularity of the "World
Poker Tour" TV show, have sparked a boom for online poker
Call it poker
for the 21st century _ and it's more than just a game.
It's a big business. More than a dozen poker
Web sites drawing tens of thousands of players per hour _ some
playing for real money and others just for fun _ have sprouted
up in recent years. And because Internet gambling remains in a
legal gray area in the United States, most of the sites are based
in other countries.
Yet the online boom has started to affect offline
On the Las Vegas Strip, where poker tables were shut down a few
years ago for lack of business, some casinos have re-opened poker
rooms, giving partial credit to the Internet for introducing new
players to the game.
The Internet also has tweaked the strategies
for playing the game, replacing the art of reading an opponent's
body language and facial expressions with pure analysis and statistics.
"Technology has completely changed the
face of the game," said Vikrant Bhargava, general manager
of PartyPoker.com, the world's leading online poker Web site,
based in India.
Within a year of Moneymaker's win in Las Vegas,
the average number of tournament contestants playing poker for
real money online jumped from about 1,500 per hour to more than
14,000, according to PokerPulse.com, a Vancouver company that
tracks people and money at 19 leading sites around the world.
The average number of paying players in non-tournament games jumped
from 2,500 to more than 11,000.
That has created a dot-com phenomenon generating
an estimated $3.2 million per day for 19 leading sites, according
to Pokerpulse.com. It tallies up to an annualized take of $1.2
billion a year for the industry.
A table for Texas
Hold 'Em, one of the most popular poker games, has
an average pot of about $60 per hand and will see about 65 hands
in any given hour, estimates PokerPulse.com. The site operator
would take $3 out of every hand _ or about $195 per hour.
Multiply that by the number of tables in the
online room and it's easy to see how the industry is pulling in
about $3.2 million per day.
"Imagine a stadium full of people playing
poker," Bhargava said. "If we put all of
those people at real tables, we'd need 15 or 20 stadiums. Technology
has made it possible for so many people to play in one virtual
Even the free tables play an important role
in the sites' success because they allow players to test their
skills without risking cash.
For the past five years, Rich MacKanin, 24,
of San Jose, Calif., has been playing in a weekly garage poker
game. Last year, after hearing about Internet
poker rooms and Moneymaker's win, he started spending
more time at PartyPoker.com's free tables.
Eventually, he coughed up $50 for some real-money
action. After three hands of play, his $50 was gone.
Playing the online, real-money game was a different
experience for MacKanin, who over the years had become the type
of player who often plays his hands based on opponents' body language,
such as smirks or raised eyebrows.
"Half the game itself is staring down
the person across the table from you, but how can you stare down
a computer? You can't bluff over a computer screen,"
Now, he pays more attention to cards in his
own hand and those played on the table. Playing online has taught
him how to calculate the odds of drawing cards that will build
a winning hand and showed him how to figure out opponent's habits
by tracking how long it takes for them to fold, bet or raise.
In an Internet
poker game, "you can go back at every hand and
look at the hand history to see what everyone had," said
Roy Cooke, cardroom manager at PlanetPoker.com. "That's the
ability to learn from your mistakes. You can review everything."
There are even software programs such as Poker
Tracker that let you analyze and track your hands. That's something
you can't do in Las Vegas.
Still, poker tables are making a comeback in
Sin City, and some casinos have re-opened the poker tables they
had shut down.
"People keep asking for them," said
Gary Thompson, spokesman for Harrah's Entertainment, which owns
Harrah's Casino and Hotel and Rio, both in Las Vegas.
"You don't really make a lot of money off of a poker room,
but the customers want to play and we want to keep them happy."
The boom in online
poker comes despite its murky legal status in the
United States. Some legal experts say federal law gives the U.S.
government power to prosecute some forms of online gambling, but
state anti-gambling laws vary _ leaving online poker trapped in
a legal gray area. What's more, most online poker sites are licensed
and regulated outside the United States, many in Canada.
"Even the United States federal government
can't do much about it if the operators are sitting in foreign
countries," said I. Nelson Rose, a professor of law at Whittier
College in southern California and author of an Internet column
dubbed "Gambling and the Law."
And in reality, state and federal authorities
are more likely to prosecute gambling operators than players,
Despite the legal murkiness, online poker rooms
are operating like real businesses. An online site has the advantage
of not having to buy real tables and chips or pay for a dealer
like a casino or cardroom would _ but there are other costs involved.
The company's finances undergo audits, as do the software products
and online security measures for its financial transactions.
"We don't have the overhead of pit bosses
and dealers but we have a fair amount of personnel, people answering
questions, watching the tables," Bhargava said. "We
have people that are watching tables and software that's watching
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