Economics Is Hard

Over the weekend Vera and I attended a dinner party and had a good time socializing with several folks from different walks of life. I had perhaps met one or two of those present prior to Saturday evening, and so did a lot of introducing of myself and what I do as I met the other two dozen who were in attendance.

I’ve written before (more than once) about how the “poker side” of my existence -- the “Shamus” side -- usually doesn’t come up in these contexts. However, among this crowd Vera knew several folks and through her a couple of those were aware of my poker playing and writing. So there were a few occasions during the night when I did chat a bit about poker with people who asked.

At one point, after the desserts had been eaten and some of us were lingering around the table, one partygoer said she was tired of everyone talking constantly about the economy. She turned to me and said “Let’s talk about poker,” a kind of conscious ploy to get away from commiserating about the country’s financial woes.

However, she immediately followed that with a question about how the economic downturn was affecting poker. I answered with a two-sentence summary of the situation, noting that while many in the poker world were talking about the economy and asking the same question, people were still playing.

From there, someone brought up how he’d found a new inexpensive wine recently that really was quite good. Jokes were made about how the wine was even better after the first couple of glasses, then the conversation moved along to other examples of comparison shopping with an eye toward saving a buck.

My little summary of how the recession (as all now seem comfortable calling it) is affecting poker was inadequate, for sure, though accurate enough, I think. Certainly the situation is much different among the live games than it is online, and there are probably important distinctions to be made between high, middle, and low stakes players, too. But it is reasonable to say “people are still playing,” I think. And, if one wished to venture such predictions, it would be reasonable to add that people will always play. More or less, anyway.

By coincidence, this morning I read through Nolan Dalla’s two-part column over on PokerNews Daily titled “What the Economic Crash of 2008 Means for Poker.” Dalla, of course, is the co-author of the Stu Ungar biography One of a Kind and current Media Director for the WSOP.

For his column, Dalla asked eight people to comment on the issue, each of whom possessed different credentials that could be said to afford some specific preparation to speak to the issue intelligently. The group comprises “an attorney, a former management consultant turned author, a tax accountant, a psychologist, a high-tech consultant, a computer programmer, a college professor, a former online poker executive, and a casino industry observer.” Sort of like that party I attended, with people coming from a variety of backgrounds to gather around the table, so to speak.

The first contributor, a Washington D.C. attorney named Ken Adams, observes that “any business that depends on discretionary consumer spending is in trouble, whether it is a manufacturer or a service business.” Adams really does not address poker directly that much in his response, but you can read between the lines here. Money used to play poker is mostly (not entirely) “discretionary consumer spending” and so, I suppose, poker could be “in trouble,” generally speaking.

Interestingly (to me), he sounds a lot like the folks at my dinner party when he says a grocery store owner with whom he played poker told him people are “buying cheaper, low-profit store brands and specials rather than the premium (higher profit) brands and items.”

Other commentators address the situation faced by poker more specifically. Three others contribute to part one of Dalla’s column. Nick Christensen, reviewer of over 250 poker books and poker author himself, offers a near-term forecast for Vegas casinos. Dr. Arthur Rebar, a psychologist, actually focuses more on economics in his response, suggesting that poker won’t be as affected as, say, slots, which are generally frequented by those of a lower income, though more so than other table games played by “high rollers.” Poker pro Perry Friedman then offers a few general observations, including the idea that tourneys will suffer less than cash games.

Dan Goldman, former VP of Marketing for PokerStars, kicks off part two of the column with a guarded, so-far-so-good assessment, correctly stating that for now “traffic on the two leading online poker sites, PokerStars and Full Tilt Poker, seem to be unaffected.” But this situation will likely change, says Goldman. Dr. David Croson, an economist, then offers some advice to casinos trying to market to stretched-thin customers. Poker author Lou Krieger shares some anecdotes from his travels that confirm the notion that we aren’t seeing major effects yet, though may soon enough. Finally, tax expert and poker author Russ Fox focuses his comments on current legal issues and the government’s stubbornness regarding online poker.

Like the rest of our culture, the “poker economy” is many-layered, making it difficult to generalize about its overall fate. Still, it is interesting (and hard to resist) occasionally making the attempt to assign it some sort of coherent character. Kind of like when we sit at a table looking out at nine different opponents, each of whom has his or her own particular style, then try nonetheless to characterize “the game.”

I guess trying to draw such conclusions is more than just interesting -- it is necessary. But hard to do.