2 million people
10% play poker (that's 200,000)
5% of poker players will play in a casino (10,000)
EDIT: Should note that I'm not endorsing these numbers, just explaining how he got 10,000.
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Looking for Partners on Texas Poker Club (5 Viewers)
- Thread starter Anthony Martino
- Start date
10% play poker (that's 200,000)
5% of poker players will play in a casino (10,000)
EDIT: Should note that I'm not endorsing these numbers, just explaining how he got 10,000.
ThinkingFold
Flush
Totally agree. It's rare to see 2,000 people on PA PokerStars even on weekend nights. In a state of 13 million people that's not even remotely close to 1 in 4.
OP
OP
Anthony Martino
Royal Flush
Ah, that makes sense. I still believe there's plenty of population out here that would play if marketed and structured correctly.
It seems like you want to tap an untapped market rather than trying to take share away from the existing big boys like The Lodge. So it's really important that you have the best data possible on that untapped market. As you can probably tell from the few posts I've made in this thread, I think getting the numbers right is critical to the success or failure of a venture like this.
Some of the numbers being thrown around (like 60 million online poker players in the US) are simply ludicrous. Others are individual observations. Do you have any hard statistics on the market? I know it's tough data to collect, but it's also something that I'd think most investors will want to see as a part of your business plan.
Here are my observations for my part of Central Florida:
There are three poker rooms within an hour of my house: Orange City (40 tables), Daytona Beach (50 tables), and Club 52 Melbourne (40 tables). These rooms serve four counties with a combined population of about 4.8 million people. Orange City, the closest room to Orlando, does get full or close to it on weekend evenings, especially when they are running big HHJs which they often do. I've never seen Daytona or Melbourne full even on a weekend - maybe 3/4 at best. During the weekdays it's obviously less busy: right now OC has 7 tables, DB has 8, and Melbourne has 4. They will all get a little busier tonight, but nothing like a weekend crowd.
In my wholly unqualified opinion, I think there's a market for a room or two in Orlando. If that ever happens (it won't), it would pull a lot of share from the other rooms - that's where most Orlando players go now (mostly Orange City). I would argue that with 130 tables available to a population of almost 5 million, we have excess capacity.
Some of the numbers being thrown around (like 60 million online poker players in the US) are simply ludicrous. Others are individual observations. Do you have any hard statistics on the market? I know it's tough data to collect, but it's also something that I'd think most investors will want to see as a part of your business plan.
Here are my observations for my part of Central Florida:
There are three poker rooms within an hour of my house: Orange City (40 tables), Daytona Beach (50 tables), and Club 52 Melbourne (40 tables). These rooms serve four counties with a combined population of about 4.8 million people. Orange City, the closest room to Orlando, does get full or close to it on weekend evenings, especially when they are running big HHJs which they often do. I've never seen Daytona or Melbourne full even on a weekend - maybe 3/4 at best. During the weekdays it's obviously less busy: right now OC has 7 tables, DB has 8, and Melbourne has 4. They will all get a little busier tonight, but nothing like a weekend crowd.
In my wholly unqualified opinion, I think there's a market for a room or two in Orlando. If that ever happens (it won't), it would pull a lot of share from the other rooms - that's where most Orlando players go now (mostly Orange City). I would argue that with 130 tables available to a population of almost 5 million, we have excess capacity.
Also I should note that my local rooms offer player-banked table games like Pai Gow and Ultimate Hold'em, and I believe they include these tables in their total count. So really the total number of poker tables across all three rooms is more like 115.
ekricket
Royal Flush
Don’t try your room in New Mexico. There’s only 2 million people in the whole state and it’s the fifth largest state.
OP
OP
Anthony Martino
Royal Flush
So Orange city being the closest to Orlando is a solid 45 minute drive away. The relatively nice thing about the Austin market is that most everything is within a much quicker drive, typically 15-30 minutes. Having lived in Tampa and managed a trucking company out there, I know that Tampa and Orlando traffic could get pretty brutal, absolute standstills at times on the highway.
While that can occur here in Austin, overall I've felt that the majority of the roads seem to flow a lot smoother than they did in Tampa. I-35 in Austin can still be a bit rough at times, although that's typically heading south towards San Antonio.
I have data on the population concentrations in the area (heat map) and I know where the existing card rooms are clustered.
There are some specific target groups I have in mind, I'll shoot you a PM with some additional details on my approach that I don't want to put in the thread.
I'll need a building with about 10-12K sq feet to accommodate what I'd be looking to build, and obviously parking is a big necessity, access to road frontage/signage would be HUGE, especially in heavily trafficked areas (which it feels like is everywhere these days in Austin).
Since I really don't have anything relevant to add from a logistical POV, I'll just say best of luck to you @Anthony Martino for your business endeavors. Poker for the masses!
Adding a ‘Ben Book’ warning after seeing what I ended up with!!!…
I’m going to throw some questions into the mix, intended to maybe help you dig into things you may not have considered vs critiquing! I’m all for people with ambitions!!
Someone pages ago mentioned the returns Private Markets investors expect that I don’t think was ever addressed. A typical Private Markets investment ties up capital for upwards of 8-10yrs+. Higher returns are an expectation for giving up liquidity. Do you have hard numbers of what sort of return can be expected if you actually met your target sized room (after expenses of said-sized room)? What if you can only get 50% of it? Or a 2-4 table room like so many you talk about in the area. Anyone truly considering investing that-kind-of-cash is going to want that-kind-of-cash level analysis…not just gut feelings that you’ll hit the moon!
Unless I’m misunderstanding you, needing 100 people to keep 10 seats full seems awful low, regardless of what someone may have told you. That needs each person to play 16hrs/wk…week in and week out? Again, maybe I misunderstood but even if that’s accurate at the Lodge, it’s certainly not going to be the case with the more casual players you’re targeting. What do the numbers look like to keep 10 seats full with people who may average 16hrs/mo? Or 16hrs here or there? What’s even a realistic monthly average number of hours for the player pool you’re specifically targeting. And what count does that equate to per 10 seats? Remember anyone truly considering investing that-kind-of-cash is going to want that-kind-of-cash level analysis…not just gut feelings that you’ll hit the moon!
You mention the run down feeling at the Lodge, etc. How often do you need to completely remodel to keep your ‘comfy nice environment’ feeling? Especially with everything used 24-7-365. What will that cost each iteration and what’s the actual return expected by doing it vs not. I won’t cut-paste the sentence above again but yeah…numbers numbers numbers!
Others have mentioned and I know you’ve said you’re ’not concerned’…but anyone truly considering investing in a ‘not 1000% white’ area will want to know what the effect of changed laws in 2yrs, 5yrs, 10yrs, etc will be. What are the contingency plans? What about changes to minimum wage laws and what a tipped employee has to be paid? How if any does being in a ‘grey area’ affect ability to get various types of insurance? What if A or B wins the White House? These all will come up with anyone actually serious. You need to have answers to even the seemingly dumbest question…you’re asking for literally hundreds of thousands of dollars + from an investor!
What sort of structure are you envisioning for an investor to get their money back out? How long until they are at least ‘back in the black’? And then making their return? Who gets paid first, you or them? They’ll want to dig into all of this much more than ‘don’t worry, be happy now!’
I find it so odd that no one else has quality signage…have you tried to figure out why? When something seems like a no-brained but isn’t being done…my brain typically says ‘does not compute’.
Similarly, why is no one else going after the local casual market. It can’t just be that they don’t know they’re there? Anyone truly considering an investment is going to want answers to these types of questions that go beyond ‘they’re just too dumb to’. Even if they’re too dumb, they have people working for them who aren’t! What do they know that you may not have thought of?
The people (and more often PE Funds) that make these sorts of investments don’t typically invest in your idea. Or even in your idea because it’ll be profitable. I know Shark Tank sensationalized that concept, but in reality those guys pretty much break even overall on the show investments and do it for other reasons. Real PE Funds and investors invest to make money. And not just a small profit or an amount of money you’d be happy making in a year. They invest to make more than they think they could make with that same investment in ANY other investment they’re currently considering.
You may have a great idea. It may even be an idea that really can be profitable. And that same idea can absolutely not be worth investing in. It’s just the reality of Private Market investments. I’m not saying this about your specific idea, just ideas in general!
IMHO you’re going to need numbers like I mentioned above…along with piles of others…to actually land anyone more than the casual window shopper. You’re going to have to invest real money in getting to these numbers, if nothing more to show the investors you’re serious. It sucks but the other investments they’re considering have done so!
No, I’m not interested in investing…and I didn’t stay at a Holiday Inn Express last night. But my day job actually IS closely related to the investment side of this post so hopefully I gave you at least one or two ideas of data to gather as you seek out investors!
Best of luck with it!!!!!!
I’m going to throw some questions into the mix, intended to maybe help you dig into things you may not have considered vs critiquing! I’m all for people with ambitions!!
Someone pages ago mentioned the returns Private Markets investors expect that I don’t think was ever addressed. A typical Private Markets investment ties up capital for upwards of 8-10yrs+. Higher returns are an expectation for giving up liquidity. Do you have hard numbers of what sort of return can be expected if you actually met your target sized room (after expenses of said-sized room)? What if you can only get 50% of it? Or a 2-4 table room like so many you talk about in the area. Anyone truly considering investing that-kind-of-cash is going to want that-kind-of-cash level analysis…not just gut feelings that you’ll hit the moon!
Unless I’m misunderstanding you, needing 100 people to keep 10 seats full seems awful low, regardless of what someone may have told you. That needs each person to play 16hrs/wk…week in and week out? Again, maybe I misunderstood but even if that’s accurate at the Lodge, it’s certainly not going to be the case with the more casual players you’re targeting. What do the numbers look like to keep 10 seats full with people who may average 16hrs/mo? Or 16hrs here or there? What’s even a realistic monthly average number of hours for the player pool you’re specifically targeting. And what count does that equate to per 10 seats? Remember anyone truly considering investing that-kind-of-cash is going to want that-kind-of-cash level analysis…not just gut feelings that you’ll hit the moon!
You mention the run down feeling at the Lodge, etc. How often do you need to completely remodel to keep your ‘comfy nice environment’ feeling? Especially with everything used 24-7-365. What will that cost each iteration and what’s the actual return expected by doing it vs not. I won’t cut-paste the sentence above again but yeah…numbers numbers numbers!
Others have mentioned and I know you’ve said you’re ’not concerned’…but anyone truly considering investing in a ‘not 1000% white’ area will want to know what the effect of changed laws in 2yrs, 5yrs, 10yrs, etc will be. What are the contingency plans? What about changes to minimum wage laws and what a tipped employee has to be paid? How if any does being in a ‘grey area’ affect ability to get various types of insurance? What if A or B wins the White House? These all will come up with anyone actually serious. You need to have answers to even the seemingly dumbest question…you’re asking for literally hundreds of thousands of dollars + from an investor!
What sort of structure are you envisioning for an investor to get their money back out? How long until they are at least ‘back in the black’? And then making their return? Who gets paid first, you or them? They’ll want to dig into all of this much more than ‘don’t worry, be happy now!’
I find it so odd that no one else has quality signage…have you tried to figure out why? When something seems like a no-brained but isn’t being done…my brain typically says ‘does not compute’.
Similarly, why is no one else going after the local casual market. It can’t just be that they don’t know they’re there? Anyone truly considering an investment is going to want answers to these types of questions that go beyond ‘they’re just too dumb to’. Even if they’re too dumb, they have people working for them who aren’t! What do they know that you may not have thought of?
The people (and more often PE Funds) that make these sorts of investments don’t typically invest in your idea. Or even in your idea because it’ll be profitable. I know Shark Tank sensationalized that concept, but in reality those guys pretty much break even overall on the show investments and do it for other reasons. Real PE Funds and investors invest to make money. And not just a small profit or an amount of money you’d be happy making in a year. They invest to make more than they think they could make with that same investment in ANY other investment they’re currently considering.
You may have a great idea. It may even be an idea that really can be profitable. And that same idea can absolutely not be worth investing in. It’s just the reality of Private Market investments. I’m not saying this about your specific idea, just ideas in general!
IMHO you’re going to need numbers like I mentioned above…along with piles of others…to actually land anyone more than the casual window shopper. You’re going to have to invest real money in getting to these numbers, if nothing more to show the investors you’re serious. It sucks but the other investments they’re considering have done so!
No, I’m not interested in investing…and I didn’t stay at a Holiday Inn Express last night. But my day job actually IS closely related to the investment side of this post so hopefully I gave you at least one or two ideas of data to gather as you seek out investors!
Best of luck with it!!!!!!
My guess is the type of investor that would be interested in this type of investment is someone who’s well positioned financially and is looking for a tax favorable Venture. IE - lose some money on paper for a while to off-set their current tax burden.
Additionally, they would like the ability to walk into an establishment (restaurant, card room, etc) and be treated like an owner. Basically silent partners, if you will.
They aren’t looking to kill it with returns, but don’t want to lose their initial investment either. The investment serves a different purpose for them.
Not uncommon in the restaurant business, bars, night clubs, etc.
Additionally, they would like the ability to walk into an establishment (restaurant, card room, etc) and be treated like an owner. Basically silent partners, if you will.
They aren’t looking to kill it with returns, but don’t want to lose their initial investment either. The investment serves a different purpose for them.
Not uncommon in the restaurant business, bars, night clubs, etc.
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I imagine the lack of quality signage issue is these are somewhat questionable legally so you don’t want to stick out…
And that’s too bad, bc location and signage is your best advertisement.
OP
OP
Anthony Martino
Royal Flush
Thanks for the support!
This is a great post and I'll work on responding to it later. I am absolutely ZONKED because of the tournament from last night, and I have a doctors appointment this afternoon.
Played the PLO tourney last night. I got absolutely saved when I had gotten into a multi-way pot with AJ87 suited to my Ace in hearts and my Jack in diamonds.
After a flop of 982 with two hearts and one diamond I got it in, got called in two spots. Turn offsuit Q, river offsuit 7 and one of the guys bombs into a dry side pot, forcing the other to fold. I turn over my two pair and IT'S GOOD! The other dude was PISSED cause he folded a set!
I manage to survive and make the final table, but they're only paying 6 spots and the chipleader refuses to chop or pay the bubble, and I'm one of the shorter stacks.
I wind up busting players 8 and 7 to get us into the money, when we get to 5 players where there for awhile (this was my lucky 13th time at the final table of this PLO tournament and by far the toughest lineup I've ever faced). Down to four and I manage to bust the former chipleader who wouldn't chop, catapulting me to 1.6 million in chips.
The three of us remaining wind up agreeing to an ICM chop (payouts were going to be over 3k for 1st, under 2k for 2nd and under 1300 for 3rd) because we were all so close in chips. So I got $2,004 and the chip leader got a bit more than $2200.
OP
OP
Anthony Martino
Royal Flush
So to touch on the players per table, what I was told was this:
As far as monthly earnings, my plan would be to build critical mass and within 4 months time be bringing in $350,000+ per month just from cash games. This doesn't factor in tournament or food/beverage revenue.
Dealers are primarily paid via tipping, so as tipped employees they are being paid a little over $2/hr from the room, and making the bulk of their money in tips. And they will represent the largest number of employees you have on staff.
I've created a spreadsheet where I put in various one-time expenses, fixed vs variable costs, operational expenses, projected revenue, etc. but it's not 100% complete as there are certain costs I still need to investigate. I do have someone looking at it who has experience with this sort of thing to help me tighten it up.
I believe the biggest reason for lack of road signage/frontage for these poker clubs is that they all go into business trying to get the cheapest possible rental situation they can. So they're all located deep inside shopping plazas, with little to no visibility from heavily trafficked roads.
fwg
Sitting Out
Open a poker room in Sugar Land, TX.
What's your plan to generate a return to your investor(s)?
Chippy McChiperson
Straight Flush
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