Dear Doug,
I’ve been to the Lodge three or four times – it is one of my favorite poker rooms. This from a guy who’s probably played in more than a hundred poker rooms in his life. In fact, when I was there in May of 2022, I wrote a glowing review.
So I was concerned about the impact on your room when I saw your recent announcement that you’re increasing the buy-ins in your cash games, removing some buy-in caps altogether, and increasing the cap on your bomb pots.
I know that Texas Card House has re-opened nearby, and Austin poker room competition is heating up. I also get that, as a business owner, you have an obligation to your shareholders, your employees, and indeed, the community, to do whatever is best for the enterprise. That includes responding to competitive pressures.
You said that these changes were made following conversations that you’ve had with frequent customers. I note that the original changes you made when you and your team took over ownership were also in response to conversations with your customers and a written survey (in which I participated).
I’m all for listening to your customers, but as you can see from the above paragraph, sometimes they give you mixed messages. Furthermore, few of them understand the market forces at work. In particular, the “We want bigger games” players are rarely thinking about the long-term health of the poker ecosystem.
I spent over a decade at PokerStars thinking about the ecosystem and how to keep it healthy. In the early go-go days, the word 'ecosystem' never came up. It didn’t even exist, because it was like air – you don’t think about it until it’s not there. Well, there was nothing like the one-two punch of UIGEA and Black Friday to drive home the importance of ecosystem health to all of us in the business. No doubt, since you’re taken over the helm at the Lodge, you’ve had that lesson hammered on you many times.
Bigger games wipe out weak players faster
I know you get this, but for the other readers…
Back in the earliest days of online poker, when sites started spreading big-bet (no-limit and pot-limit) rather than fixed-limit games, they quickly learned that they had to cap buy-ins. Otherwise, the good players immediately decimated the weak ones, like sharks cutting through a bait ball of small fish.
The sites’ chosen buy-in cap was 100 big blinds (BB), leading to the shorthand of '200NL' being a no-limit hold’em game with a $2 big blind and a $200 (100 BB) buy-in cap.
Live poker venues have mostly chosen larger buy-in caps, and I believe this is sustainable because of the ease of fresh money coming into the ecosystem. Most live poker buy-in caps are in the 100-200 BB range. But the old buy-in cap in the Lodge’s $1/3 game was $1,000 – 333 BBs. A very big game by any standard. You’ve now increased that to $1,500. In my opinion, nobody in a recreational or semi-recreational pool needs to be playing 500 BBs deep.
You know as well as I that the deeper you’re playing, the more costly the mistakes, and the faster the good players will bust the weaker ones.
Adding to the trouble, straddles (and sometimes double and triple straddles) are a fact of life at the Lodge. This takes your recreational and weaker players out of their comfort zone, and now that entire $1,500 buy-in is easily at risk. I note that the Wynn poker room, which I hope we can agree is one of the best managed poker rooms in the world, has removed straddles altogether in their $5/10 and $10/20 games. By the way, they have a $500 cap (133 BBs) on their $1/3 game, and everybody seems perfectly happy with that.
Players don’t care about ecosystem health
Unfortunately, most players don’t understand the variables of poker ecosystem health. The pros care only about making this week’s groceries and next month’s rent. They don’t care about what your game health and traffic will be six, twelve, or 24 months from now. Many of the losing players are driven by ego, a desire to be one of the 'cool kids' playing massive pots (just like their live-stream heroes), hope for a big score, whatever. They’re not thinking about how the game structure affects their long-term survivability.
In short, the only people who think about the medium- and long-term health of the games are the owners and managers of the poker room. Customer input is a fine thing, but don’t let the tail wag the dog. You’re the expert in the room, with the greatest responsibility – use your expertise, vision, and judgment to make the best decision.
You have the data, I don’t
I get that I’m sitting here on the outside, talking to the guy who has every spreadsheet and every revenue forecast at his fingertips. So maybe I’m dead wrong and this is exactly the right play.
But I fear that it’s a knee-jerk reaction to a market upheaval and input from an ill-informed and short-sighted customer base.
Here’s the thing, Doug. Whenever I’ve been at the Lodge, I’ve thought, “If I ran a poker room, I’d want it to be like this.” The dealers are good at their jobs, and they’re not talking about ex-spouses, other players, and politics while they’re in the box. The floor-people are on-point; they handle issues quickly and with minimal friction. The front desk staff and cashiers smile at me and make me feel welcome.
I’m not a tournament guy, but I know plenty of people who play your tournaments. They say the events are run extremely well (no mean feat) and everybody has a good time.
Anybody can throw promotional dollars on the floor and hope it poaches players from the Other Guys. Anyone can offer 'Match the Stack' and hope it attracts big game aficionados. It’s much harder to offer the professionalism, top-notch customer experience, and star power that the Lodge does.
So compete there – that’s your Unique Selling Proposition, as they call it in B-school. Don’t sacrifice the financial health of your recreational player population and long-term viability of your cash games to fight a short-term turf battle with a new competitor.
I wish you and the entire Lodge team success and thriving cash games.
Best, Lee.
