4:45pm PT by Eriq Gardner
Why Televised Poker Is in Danger of Folding
High-stakes poker shows have proliferated on television during the past decade to the point that -- fueled by advertising from flush gaming websites -- about 50 programs air each week on networks as diverse as broadcasters NBC and Fox and the most obscure cable channels.
But on April 15, the Justice Department dropped its hammer on the poker community by indicting founders of the largest online poker enterprises, including Full Tilt, Poker Stars and Absolute Poker, on charges of money laundering. Online gaming sites, which are estimated to generate about $5 billion a year in revenue, also happen to be the biggest sponsors of televised poker. Now the future of the game on TV is in serious doubt as networks have begun throwing in their cards.
Fox has folded two of its shows, PokerStars Big Game and PokerStars Million Dollar Challenge. ESPN has pulled PokerStars North American Poker Tour, its featured poker show of the spring, despite the fact that production on the series has been completed. "Given all that was happening, it didn't feel right to continue," ESPN spokesman Mike Soltys says.
Shows like Poker After Dark on NBC could be next to go, and even highly rated shows like ESPN's World Series of Poker -- though apparently safe for now -- might look radically different if poker advertising dries up.
From the first ante, poker has enjoyed a strange relationship with television. To many observers, the boom in such shows as World Series of Poker and Fox's Million Dollar Challenge owed to increasing public appetite for the game and the rise of telegenic players including Phil Ivey, Chris Moneymaker and Phil Hellmuth.
But that's only part of the story.
The Internet boom pumped millions of dollars into poker websites, whose executives began reaching out to television networks in hope of creating programming on which to advertise their sites. The solicitations presented TV executives with a dilemma.
On one hand, playing poker for money remains technically illegal in many cases. But it's rarely prosecuted, and poker sites were willing to purchase airtime in blocks or give networks guaranteed ad buys. Many poker sites were actually funding production of these shows. In other words, poker had become the rarest commodity in TV: a guaranteed profit.
Still, according to Henry Shields, a lawyer who worked on contracts to bring poker to NBC, "It's fair to say that networks tried to dot all of the i's and cross all of the t's when evaluating the questions of gambling."
Many networks satisfied their legal concerns by being crafty. A website like PokerStars.com would establish an affiliate like PokerStars.net, where no money would change hands and visitors would be guided to "learn to play poker for free."
The dot-nets, in turn, advertised the dot-coms, and though network execs knew what was happening, they figured themselves safe because poker TV shows were merely pointing viewers to legitimate educational hubs.
For a while, this arrangement worked perfectly fine and was quite lucrative for TV networks. But that was before the Justice Department swooped in and spoiled the party.
"Broadcasters are going to be very cautious now about poker programming, especially site-specific shows and product placement," says Sanford Millar, an attorney who represents many Internet-based businesses, including poker companies.
The most immediate problem for networks is that as a result of the indictments, poker sites' assets have been frozen, drying up sources of advertising and sponsorships.
GSN, whose ads on poker programming have come exclusively from poker websites, recently severed ties with PokerStars.net and FullTiltPoker.net, both presenting sponsors of its poker shows.
"Our poker schedule has been updated to incorporate those and other changes, and we will evaluate additional adjustments to our schedule as warranted," a GSN spokesperson says.
But even if advertising concerns weren't so serious, poker on television would be endangered. Most shows will need to pass renewed muster with network lawyers, and according to Millar, some could be fearful of making co-production deals that might be deemed by authorities to be "aiding and abetting" criminal activity. (The Justice Department declined comment about whether TV networks might become part of its inquiry, but observers expect that the feds will at least ask questions.)
And because many of the game's top players are sponsored by indicted poker sites, the result could be less action at the table and dwindling money pots. Whether this will erode viewer interest remains to be seen. But it's safe to say that for TV networks, the deck is no longer stacked in their favor.