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Friday, August 11, 2006

PokerPro Table Momentum Growing, Despite Second Quarter Losses


When Antonio Esfandiari first sat down at a PokerPro automated poker table, he was a little unsure about the technology."I was very hesitant at first, and then I sat down, and I was like 'Wow!' because it really feels like poker," Esfandiari said. "It's like a dream come true; it's so awesome. I think it's so much better for tournaments, especially."Esfandiari won a single table exhibition against the likes of Mike Sexton, Kenna James, Clonie Gowen and other professional players at the Aussie Poker Millions in January on the table, which combines the technology of Internet poker with live poker. The PokerPro table offers a computerized Texas Hold'em game, with each player's seat in front of a touch screen that reveals hole cards and chip stacks. When it is a player's turn to act, that player is prompted to check, bet, raise or fold. Marketing statements claim that the tables average a 50 percent increase in hands per hour over traditional live tables, which pleases both players and card room management, and the table can run either a live cash game or a tournament.

PokerTek, the North Carolina-based company behind the technology, has been slowly building momentum for the past two years. While some poker rooms have utilized the technology for over a year, others are just signing on. Carnival Cruise Lines tried the table for the first time on one cruise ship in late April and it was such a success that the company signed a three-year contract to expand the deal to other ships.

"The cruise industry is just awesome for us," said Chris Manley, an Implementation Consultant with PokerTek. "It's a dream for these cruise ships, who have a captive audience. It makes a ton of money, and you don't have to keep the dealers working at the table."

Despite the recent growth, the news wasn't quite as cheery as PokerTek announced their results for the second quarter of 2006 on Thursday afternoon. The company finished the quarter with a loss of over $2.2 million ($0.24 per diluted share), but PokerTek CEO Lou White remained positive despite the numbers.

"While expenses were in line with our operating plan, we are behind our revenue target as it has taken us longer than expected to more broadly introduce the PokerPro system to the market, which is attributable in large part to regulatory delays," White said in a statement after announcing the results. "However, we are encouraged by many recent developments on the regulatory front, we are enthusiastic about our installation pipeline of announced and soon-to-be announced installations, and we are very proud of the progress that we continue to make toward our goals."

Part of that progress was taking place at the World Series of Poker (WSOP) Gaming Life Expo. PokerTek's corner booth was one of the busiest exhibits as interested onlookers were invited to play turbo sit-and-go tournaments, with the winner getting a free T-shirt, hat or sweatshirt.

The software at PokerPro tables requires very little interaction on the casino's part, most notably in providing dealers. The elimination of the dealer at these tables has produced a mixed reaction. Some players enjoy a boost to their bankroll as tipping dealers is eliminated, but others just aren't ready to believe that the computerized game is as random as a deck of cards (it is). Dealers, however, are understandably worried about becoming irrelevant.

"Dealers want to hate it right away because obviously they think it's a threat to their job," Manley said. "I look at our table as a stepping stone. You've got players who are used to playing online. They've never walked into a casino, and when they do, they walk in and see a poker room with all these guys and it's an intimidating place. All the unspoken rules of poker are taken care of for you online. (The PokerPro table) looks familiar, and they play on this for a while and now they are used to playing with players in person. Now they're ready to make that jump, and it's kind of like a little stepping stone from the Internet to a live game."

The Seminole Hard Rock Casino and Hotel in Tampa, Florida was one of the first to use the table. Henry Funke, the poker room manager at the Seminole Hard Rock has seen the table overcome early resistance from both players and dealers.

"It's not the table's fault," Funke said. "But they can't talk for themselves. For them to be accepted, you have to overcome a lot of dealer resentment, you have to overcome a lot of management in other casinos that don't want to deal with them. But what we're running on them now are things that dealers don't mind not having to deal. These tables are very efficient at running low-limit, single-table tournaments, and they're not really affecting the dealers in their take-home pay."

Despite these obstacles, the system has taken hold at the Seminole Hard Rock. The 50-table poker room includes two PokerPro tables, and Funke is planning on bringing in another.

"It's going to be the wave of the future," Funke said. "I wouldn't be surprised if you see final tables on television in the near future being dealt by PokerPro. I think it lends itself very well to that type of format, in terms of not having to worry about players showing (a holecam) their cards."

The tables, which have become popular in each location where they have been placed, are currently only equipped to run Texas Hold'em games. PokerTek, however, plans to launch Omaha in the near future and will continue to expand on the repertoire of games as demand dictates.

Some players insist they will miss the physical aspect of holding cards and doing chip tricks, but Manley has a quick response for those players: "Did you come here to play with your chips, or did you come here to play poker?"

Those looking to play poker might soon be finding themselves at a PokerPro table.

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