If you search the poker news sites to find information on the current live tournaments you will find a concurrent theme, and it’s the word ‘Guarantee’. It seems to have found it’s way into the title of most poker operator headlines. Is this a fad? Is this just something that poker operators believe provides them with value? Or do they just follow the herd?
After the media spotlight dazzled brightly over the failures of Dusk till Dawn (DTD) to hit their fabled €1m guarantee at the International Stadiums Poker Tour (ISPT) at Wembley, and Full Tilt Poker’s (FTP) inability to do likewise with their $1m guaranteed main event at the United Kingdom & Ireland Poker Tour (UKIPT) at Galway, I thought this matter deserved further scrutiny.
For every failure, there is always a success. The World Poker Tour (WPT) Borgata Poker Open has just smashed it’s annual $3m guarantee; the recent $10m guarantee at the Seminole Hard Rock Poker Open in Florida did likewise, and the World Series of Poker (WSOP) Millionaire Maker guaranteed $1m first prize was also a success this Summer.
Why does a $10m guarantee work in Florida, and a $1m guarantee fail in Galway? To help answer that question I reached out to Warren Kwei, who is the majority shareholder at MainEventTravel.com, a travel and hospitality operator that specializes in finding value for poker players who are traversing the globe in search of the green.
“Florida is a sensational location for a large Poker event of such ilk. It’s accessible both on the international stage and within the USA itself. The event was also heavily promoted globally and as a result attracted players from all continents. In essence, its attraction was similar to that of a major WSOP event – big money, big prizes, hot weather, very accessible, and a stunning structure with a perfectly balanced buy-in (one that attracts the Pro’s and the Aspirational types alike),” Said Kwei.
So what about Galway?
“Galway is a tough one. Firstly its timing was an issue, not in terms of the calendar, but economically. Ireland, perhaps more than most, has and remains in economic uncertainty. People are spending less percentage of their money on ‘leisure’ related activities in the region. This is one example of the economic challenges that faced the event. Another is the location. Whilst Irelands licensing laws mean that it’s easier for events to be held there, actually getting to Galway is a challenge and this puts people off. At MainEventTravel.com we had many potential customers who chose not to go due to the proportionate spend on travel vs. buy-ins. By that I mean that poker players like to spend their bankroll on actually playing the game rather than all the expense activity around it. At Galway (unless you were a Satellite winner with included Hotel/Travel), you were looking at spending the equivalent of your main event buy-in on flights/hotels/taxis/food etc. There comes a point when that doesn’t quite add up. What we see at MainEventTravel is that most customers are comfortable spending a 30-40% portion of their ‘gaming’ money on ancillary stuff like Hotels/Travel. It’s important that tour operators start to recognize this as not everyone wants the ‘high-end’ experience when it’s not economically viable.”
Some interesting points, but what do the players think? The Grosvenor United Kingdom Poker Tour (GUKPT) is currently hosting an event at Manchester and it has a £200k guarantee. I asked two of its players if the guarantee means that much to them?
“It’s a lot more expensive than people think to travel to tournaments if there’s no guarantee.” Said RunItOnce coach Sam Grafton. “As a customer, you don’t always know what you are getting when you arrive at an event, but with the GUKPT Manchester, the £200k guarantee was a big factor behind my decision to play in this event.”
Grafton continued to explain why, “I get a clearer idea of the potential size of the tournament and therefore a better chance of estimating my ROI. If you have a $1m guarantee in Galway, for example, I know there aren’t a thousand good players going to be playing in that tournament. It’s the same in Manchester. There is not going to be 200 top players here.”
IveyPoker Pro John Eames has played in tournaments all over the world, and his opinion is similar to that of Grafton. “ Most of the time they’re an indication of field size, which is useful to a pro to deduce whether the prize money is worth the travel and time. To an amateur it’s nice to know that a big prize is guaranteed. As a pro, I don’t often anticipate an overlay so that doesn’t come into it. Most guaranteed tournaments don’t have an overlay, especially online, but it’s rare that this happens live also.”
For Grafton and Eames it seems the dynamic of the guarantee holds some value for them as professionals. As a recreational player the guarantee doesn’t enter my thoughts. My concerns are on the size of the buy-in and the location of the event. Recreational players can’t justify the cost of expenses to play in these tournaments, meaning the locality of the event is so important for both the recreational player, and the tour operator relying on these players.
With money being as tight as ever, the role of the likes of MainEventTravel.com becomes crucial for the poker professional. So what is Warren and his team trying to do to combat the problem of cost as opposed to value?
“I have an inherent belief that those involved in the industry have a responsibility to protect, nourish and grow it. That mantra sits at the forefront of everything we do at MainEventTravel.com. Don’t get me wrong, I haven’t invested into this business because it’s a charity, it needs to make money to be successful, but that doesn’t mean we focus on tactical wins day in day out. In other words, we try and offer alternative options for players that travel, depending on event and location, some players like the budget/value option and where we can we’ll always offer that. Cost in travel related solutions for players is a key differentiator on whether they go or not. This is why more and more Tour operators are choosing us to work with. Simply put, if we can offer value to their customer base by attracting them with cheaper travel options, it’s win win.”
It seems MainEventTravel.com are doing their bit for the poker community, but what about the poker operators? How far does the ‘guarantee’ marketing strategy go? How long before it implodes? You only have to look at the 2012 Partouche Poker Tour (PPT) to see first hand the damage guarantees can do to a poker operator. Irrespective of your thoughts on the PPT, and the people who run it, that was one of the premier events of the poker calendar and it will no longer operate as a result of the PPT’s desire to offer a GTE that was outside of their scope.
“I feel that the Poker industry is still very much in its infancy in the live environment. At the heart of the issue is the insular nature of the poker industry itself. Tours offering increased GTEs week in week out is an approach that I see as too tactical. Why? Simply put, where and what next? Ask yourself what UKIPT Galway does next year? Does it go bigger? Does it go smaller? Where is the bar now? The trouble is that tactical GTEs hurt the long-term growth of live poker in that expectations keep being raised. The only way that approach delivers results is simple; the industry needs to attract more players! For me, this is what Tour operators and the industry needs to focus on. The poker boom is not too different to the .com boom in many ways. Right now we need to recognize this and decide which way to turn. The transitional phase over the next 3-5 years will be crucial for live poker. ‘Thought Leadership’ is what’s needed at the highest level of the poker organizations. We need to step outside of the bubble and look at the bigger picture. Tactical greed hurts this industry on every level and in order for that to stop, more collaboration and consolidation between organizations is needed. I feel that tour operators and players alike need to step back when deciding what / where to play, let’s get back to asking the questions like ‘what’s the structure’ rather than ‘what’s the guarantee’. Stripping it back to the game itself is what’s needed, after all, that’s what we got into the game for in the first place.”
Mickey Petersen is a former European Poker Tour (EPT) Champion and reigning English Poker Open (EPO) champion. Does Petersen agree with Kwei that player’s thoughts are too focused on the ‘guarantee’?
“I would say that for me personally guarantees aren’t a very big decision factor in what tournaments I choose to travel to. I am more concerned with things like a good schedule of side-events, reasonable rake and having good staff/TD. Also for something like an EPT, for example, you know the ecology is always going to be good because PokerStars runs so many satellites, so a guarantee doesn’t really matter to me. That being said I am all for it if it can create some buzz and get more people to play like with the ISPT and the Florida tournament, but overall I don’t think its very important.” Said Petersen.
I recently wrote an article about the Heartland Poker Tour (HPT), which the co-founders described as the tour that focuses on the average, ordinary player. There isn’t a guarantee on the HPT, instead they focus on providing value in other ways such as ensuring the buy-in is low, that the tour stops at the main poker communities and that the action takes place over the weekend when recreational players are away from the nine to five grind.
The HPT has managed to create a niche in a market full of giants, but I can’t see the giants deciding to stop butting heads anytime soon. Guarantees will rise, as will buy-ins, and eventually somebody is going to get hurt.
I think the Betfair shareholder, shrewd businessman, and author, Richard Koch said it best, “It’s not the meek who shall inherit the earth, nor the aggressive, but rather the cooperative.”
I think Kwei’s comments are on the money. Guarantees are providing value for the players, but there needs to be greater consolidation within the poker community to make sure we don’t see anymore tours following Partouche down the gutter as they try to keep up with the Joneses.