Harrah's Entertainment, ESPN Create Series of High-Profile Poker Tournaments
Harrah's Entertainment Inc. and ESPN are aiming to capitalize on poker's best-known event by beginning a series of high-profile tournaments across the country next year. The Las Vegas-based gambling company hopes name recognition will shuffle rival tournaments to the back of the pack in the lucrative and fast-growing poker market.
The World Series of Poker Circuit will include a point system and seven televised tournaments at Harrah's casinos in Las Vegas, Lake Tahoe, Atlantic City, N.J., New Orleans and San Diego, Harrah's Entertainment executives said. The circuit concludes with the Tournament of Champions in Las Vegas with top point earners gaining entry.
While Harrah's wouldn't forecast anticipated revenues, the company is betting the individual events will attract hundreds of poker players, with each participant spending $10,000 for a seat at one of the tournament tables.
Dan Goldman, vice president of marketing for PokerStars, a popular online poker Web site, said anecdotal research shows that from 50 million to 60 million people play poker at least once a month.
Harrah's thinks the World Series of Poker brand will help it tap that market.
"It's so far head of everybody else you can't match up," said Howard Greenbaum, Harrah's vice president of specialty gambling and golf operations. "Everybody wants to play in the World Series of Poker. It's dying and going to heaven for the poker player."
John Mulkey, a Bear Stearns Co. gambling analyst in New York, said Harrah's should generate a solid return on its investment. "It was a natural for a company like Harrah's with its distribution points across the country to own such a popular event," he said.
Harrah's signed an agreement in July to buy Caesars Entertainment Inc. in a deal that if approved by regulators would make it the largest gambling company in the world with more than $8 billion in revenues.
Other cable networks are already capitalizing on the poker craze include Bravo's "Celebrity Poker Showdown" and the "World Poker Tour" on the Travel Channel. Bravo is owned by General Electric Co.'s NBC Universal and the Travel Channel's parent company is Discovery Communications Inc.
Steve Lipscomb, chief executive of the three-year-old World Poker Tour, began airing tournaments to impressive ratings about 18 months ago.
Lipscomb's company, WPT Enterprises Inc. puts on a series of 15 poker tournaments with about $70 million in prize money. The finals are played at the luxurious Bellagio hotel-casino in Las Vegas.
"When you play in the World Poker Tour championship at the Bellagio, there is no better poker event in the world, including the World Series of Poker," he said. "We've established the sport. The WPT is the NBA."
"If they try to go up against our event, they are going to have to try to take on an established event," he said. Well-known pros such as T.J. Cloutier, Doyle Brunson, Phil Hellmuth Jr. and Howard Lederer can play in both WPT and WSOP events.
While the Harrah's tournaments will carry the World Series of Poker name, the crown jewel will remain the once-a-year poker tournament that has been held at the smoky Binion's Horseshoe hotel-casino in downtown Las Vegas since 1971.
Harrah's bought the World Series of Poker and the Horseshoe name in Nevada for $44.3 million earlier this year from Becky Behnen, the daughter of legendary cowboy Benny Binion, who used high-stakes gambling to raise the profile of his casino and Las Vegas.
MTR Gaming Group Inc. later bought Binion's for $20 million from Harrah's, which manages the property for the West Virginia company.
Harrah's believes more than 5,000 people could enter the 36th annual World Series of Poker in 2005, seeking what ESPN calls "poker immortality," when it will be held at Harrah's Rio hotel-casino off the Las Vegas Strip and at Binion's.
The 2004 world series attracted a field of 2,576 players, far surpassing the 839 in 2003. Next year, the total prize pool in the No-Limit Texas Hold'Em main event could exceed $50 million, with the $5 million first place being increased by several million.
"We had expected to see a substantial increase in the number of players, but didn't anticipate anything of the magnitude of what actually occurred," said Ginny Shanks, Harrah's senior vice president for acquisition marketing.
ESPN, owned by Walt Disney Co., purchased the rights to televise the World Series of Poker from the former owners of Binion's for $55,000 a year, Shanks said. But those low-budget days are over. ESPN's is filming the circuit in 2005 and its contract expires next year.
Last week's broadcast of the final table of the 2004 World Series of Poker, taped in May, gave the sports network its highest-rated and most-watched poker telecast ever, ESPN said. Patent attorney Greg Raymer of Stonington, Conn., won the Texas Hold'Em title and $5 million in cash.
"The World Series of Poker is it," said Bob Chesterman, coordinating producer for ESPN original entertainment. "It's the pinnacle of poker. The players knows that and the viewers know it."
ESPN said the last hour of the finals posted a hefty 2.8 rating representing more than 2.5 million households. ESPN hopes to draw similar numbers when it airs its first Tournament of Champions in Las Vegas, which will be part of the circuit next year. Tuesday's three-hour poker slugfest was played earlier this month and included 10 of the best players in the world. The winner takes home $2 million.
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