Caesars Becoming Irrelevant in Las Vegas Poker Market

John Mehaffey March 4, 2014

Update: This article was published in early 2014.  Since that time, Caesars has made drastic improvements to its poker product.  Caesars Palace moved its poker room into the sports book area.  It is much more comfortable and attractive to passersby.  Caesars Palace dropped its rake from $5 to $4 cap.  It also removed the jackpot dollar.  This put it in line with the largest Las Vegas poker rooms.

Harrah’s dropped its max rake from $5 to $4, but kept its jackpot drop.  The Quad/Linq/Imperial Palace poker room is no longer in operation.

Original Article

There is a rumor floating around Las Vegas that Caesars Palace will close its poker room after the World Series of Poker Circuit event leaves town later this month. The poker room is located next to the Pure Nightclub. The speculation concludes that Pure will take over the space vacated by the poker room. Caesars Palace will still offer poker, but it will be a much smaller scale, according to these reports.

The estimates are that 15 tables will be spread in the new room that will be located within the table games on the main casino floor. There are currently 29 cash game and 33 tournament tables, according to All Vegas Poker.

Caesars Palace was intended to be the flagship for poker in Las Vegas when it opened in 2006. Many players feel that the opening of Venetian’s poker room doomed Caesars Palace. The latest reviews of the poker room at Caesars Palace are all below average.

The issues with Caesars Palace are not unique to poker rooms owned by Caesars Entertainment, its parent company. The company closed two of its poker rooms in the past two years. O’Sheas closed its poker room to make room for a remodel and expansion of Imperial Palace. O’Sheas reopened, but without a poker room.

Bill’s Gamblin’ Hall closed in 2013 for a remodeling and rebranding. It will reopen as The Cromwell, but without poker. The company’s remaining poker rooms are small and draw mostly hotel guests and a few locals.

Comparing Caesars Entertainment’s Las Vegas poker rooms to competitors

We compared the traffic at Caesars Entertainment’s poker rooms with large ones in Las Vegas the past two weekends. Most of this information was found on the Bravo Poker app.

The numbers below represent cash game traffic at poker rooms owned by Caesars Entertainment at 9PM on March 1, 2014:

• Caesars Palace – 9
• Planet Hollywood – 6
• Flamingo – 5
• Harrah’s – 3
• Bally’s – 3
• Rio – 2
• Quad – 1

Large Las Vegas poker room traffic at same time:

• Bellagio – 30
• Venetian – 25
• Red Rock – 19
• Orleans – 18
• Aria – 17
• Wynn – 12
• MGM – 10

This ratio is consistent with the Las Vegas poker surveys performed by Two Plus Two four times a year. (Author’s note: I help compile that info.)

Bellagio had more cash games than all Caesars Entertainment poker rooms combined. There were seven poker rooms with more traffic than Caesars Palace. Two of those were locals’ casinos.

What does Caesars Entertainment do wrong?

The first reason Las Vegas poker players will often give as to why they do not play at Caesars Entertainment properties is the rake. The company’s poker rooms all take a $5 max drop. This is the worst in the city. All other poker rooms in Las Vegas have either a $3 or $4 drop. Caesars Entertainment properties also take a jackpot dollar. The only exception to the jackpot rake is in the Rio Convention Center during the World Series of Poker. The $5 max rake still applies.

Caesars was not the only group that tried to up its rake to $5. Some Station Casinos poker rooms tried to raise the rake up to $5. Player counts at Station properties dropped quickly and management realized that was a mistake and reinstated the $4 max drop. Unlike Stations, Caesars decided to stick with it.

The best known Caesars jackpot in recent years was the MegaBeat. This was a citywide bad beat jackpot that paid any player that was seated in a game at any Las Vegas Caesars poker room. Bad beat jackpots can be problematic. The biggest issue is the hundreds of thousands of dollars that leave the poker economy before it is hit. Most of that money leaves the poker rooms once it is unlocked. Most Caesars rooms now pay high hand jackpots.

Jackpot drops are not popular among experienced players. This seems to be demonstrated by the fact that the top four Las Vegas poker rooms do not offer any jackpot. All four of these rooms – Aria, Bellagio, Venetian and Wynn – offer a $4 max rake. This makes the effective rake one-third lower than Caesars properties, assuming a player does not hit a high variance jackpot hand.

Some might argue that these rooms do not offer a jackpot because they are already busy. On the other hand, these rooms are busy because they do not have a jackpot drop.

What can Caesars do to improve poker business?

Caesars may be content with its low-volume poker rooms. Poker is never a substantial source of revenue. If there is motivation to improve the situation, there are several options.

WSOP Poker Room

A WSOP poker room was launched last week for Bally’s in Atlantic City. It allows players to enjoy live and online play at the same time. That would require a mobile app for WSOP in Nevada, but the same concept would work well in the home of the world’s largest poker tournament series.

Caesars Palace would have been the most logical place for a WSOP poker room. If that room closes, there are still several poker rooms on the Strip that this could be implemented. It would require expansion of an existing room. That casino floor space could be replaced by closing other poker rooms owned by the company. Rio might seem like the logical location for this type of project, but it is too far from the Strip.  The shuffling of several properties to the interactive company makes this idea even more feasible.

A poker room the size of what I picture could remove the jackpot drop to stay competitive with large Las Vegas poker rooms. Smaller rooms that would continue to exist could keep promotions.

Lower rake to $4 Max

The highest rake in Las Vegas is a deterrent to many players. Bringing the excessive rake down to the industry standard would help the company compete against MGM and independent rooms.

Play poker community anger at Venetian to its advantage

The online poker community is furious with Las Vegas Sands due to Sheldon Adelson’s war against gambling on the Internet. This is the perfect chance to capitalize on that by advertising that Caesars Entertainment is a proponent of online poker and lobbies for its expansion. The Venetian is a short walk to all Las Vegas Strip properties owned by Caesars Entertainment.

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