Starting a cardroom

[AshanD]

I read that big thread on playing poker and while it sounds nice, I think the fast lane approach is to be the cardroom, not the player. The cardroom is the big winner from what looks like the small amount of rake they take from each pot. $2-$3 per hand x30-40 means the room is taking $60-$120 per hour in rake per table. Not a bad business at all!

Problem is the regulation is high in pretty much every state for a small timer. Therefore I'm looking outside of the US. I have the means to start a small cardroom, about $50k in savings. Do you guys have any suggestions for a place to start such a business without having too much legal red tape to cut through? And FYI I am open to learning a new language so no restrictions there.

 

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[MJ DeMarco]

I read that big thread on playing poker and while it sounds nice, I think the fast lane approach is to be the cardroom, not the player.

Absolutely, or be the host of the software, like PokerStars.

Do you guys have any suggestions for a place to start such a business without having too much legal red tape to cut through? And FYI I am open to learning a new language so no restrictions there.

I'd look at where existing companies are based, and then, analyze the government regs and try to find countries with similar. Off the top of my head, I'd think of Costa Rica, Grand Cayman, Panama, and other Caribbean countries.

 

[MattThomas]

I'm not too knowledgeable about this field, but wouldn't creating any kind of online gambling/casino/poker website allow you to bypass state regulations? You'd have the benefit of not having to pay the overhead of, say real estate expense while also reaching a much broader audience.

I know there are already a lot of online poker sites out there, so perhaps narrowing in on a more specific niche might work well. Just a thought.

 

[365]

Dont you think online poker already is a highly competitive market?

 

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[Bilgefisher]

Dont you think online poker already is a highly competitive market?

Its very competitive, but so is fast food. I can't imagine it would take to many tables at $80 hr rake per table. Although I imagine the start up cost may be rather high and ongoing costs can be high. Remember you are in a constant battle against cheats, hackers, and folks jumping between poker rooms on a whim. I think it can be done as long as your not in the US.

Also, you have to be very ready for legislative changes here in the US. A change can shut you down over night. I'm not talking about banning poker. I'm talking about legislation that will allow US based casinos to have online rooms. I know many people that would play at MGM or Harrah's online rather then a room based out of Costa Rica.

 

[AshanD]

I think you guys have a good point about going online instead. Problem is it is much more expensive (good reliable software will cost tens of thousands alone)

To niche this I can think of only 2 options:

1. Market to people who would rather play at a small site than the well known ones. I can not think of any good reason for this though (because of poorer game selection, more risk to the player of dealing with an unestablished site, etc)

2. Market to a niche not already occupied by the big sites. Maybe small countries where the market is comparatively much smaller?

Overall I am not sure if I can attempt this, $50k is my life savings and it would take a long time to replenish those funds if things didn't work out. I would rather start a small cardroom in a non-competitive environment (which I think will give me a much greater chance for success) I think that I could run a successful cardroom basically anywhere that cardrooms are legal and a big casino isn't right next door.

 

[365]

If 50k is youre life saving I would not consider any risky start-up that requires most of these funds. I think things get rather more than less expensive than planned.
When you say small cardroom you mean a physical room/location with table and stuff where you hire a dealer, a bouncer, buy chips, get the license etc.? Do you have some basic number for such a startup? I have no idea how this kind of business works out in numbers.. but its an interesting idea.

 

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[snowbank]

It sounds like you're talking about a brick and mortar cardroom. The margins from what I know are very, very small. The main reasons most casinos have poker rooms is to draw in people that will hopefully also spend money at their other games, as they don't want to lose customers who would have lost a lot at table games to casinos with a poker room if they didn't have one. A poker room would be a lot of work for not a lot of money. That's if you have enough connections in the poker community where you are able to fill it. If not it will lose money. From your initial post I do not think you would have a very good chance of even getting it profitable.(I say that to be helpful) I wouldn't spend a lot of time trying to do this unless it's your dream to run a cardroom and it's a huge passion of yours. If you're even considering it you should definitely get some experience working in a cardroom so you understand how much more there is to the business than just multiplying the rake times how many tables you have, as the hardest part of the business will be filling the tables and having the room properly run.

 

[AshanD]

If 50k is youre life saving I would not consider any risky start-up that requires most of these funds. I think things get rather more than less expensive than planned.
When you say small cardroom you mean a physical room/location with table and stuff where you hire a dealer, a bouncer, buy chips, get the license etc.? Do you have some basic number for such a startup? I have no idea how this kind of business works out in numbers.. but its an interesting idea.

Yes that is the idea. Startup costs are minimal. Equipment (tables, chips, security cameras, etc) won't cost more than $15,000, and labor costs for dealers and security will also be minimal because I can take a cut of the dealer's tips so he effectively pays me (and still gets $15/hour)

I've read here that before starting any kind of venture you want to secure clients first. I think the best way to do this would be to start this up as a home game with no rake and me dealing. This way I fill up a table on the weekends and my costs drop substantially (no security needed at this early stage, I deal, maybe I even use walmart chips instad of custom)

Once I get enough people to get a second table going then the plan is to move to a bigger apartment, or a commercial space if necessary, hire a couple dealers and security and start raking pots. From there I just keep growing the operation as business allows

 

[AshanD]

It sounds like you're talking about a brick and mortar cardroom. The margins from what I know are very, very small. The main reasons most casinos have poker rooms is to draw in people that will hopefully also spend money at their other games, as they don't want to lose customers who would have lost a lot at table games to casinos with a poker room if they didn't have one. A poker room would be a lot of work for not a lot of money. That's if you have enough connections in the poker community where you are able to fill it. If not it will lose money. From your initial post I do not think you would have a very good chance of even getting it profitable.(I say that to be helpful) I wouldn't spend a lot of time trying to do this unless it's your dream to run a cardroom and it's a huge passion of yours. If you're even considering it you should definitely get some experience working in a cardroom so you understand how much more there is to the business than just multiplying the rake times how many tables you have, as the hardest part of the business will be filling the tables and having the room properly run.

If the margins are small then you must be talking about an operation with a lot of overhead. What costs can a small cardroom have besides the basics needed to run a few tables? Food? alcohol? Lighting? I do not see what can thin the margins so much as you describe.

 

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[snowbank]

If the margins are small then you must be talking about an operation with a lot of overhead. What costs can a small cardroom have besides the basics needed to run a few tables? Food? alcohol? Lighting? I do not see what can thin the margins so much as you describe.

Let's pretend you have 4 tables. Let's say you're going to give dealer's $10/hr. Let's say you're paying $1k/month to rent a place. Let's say you run it for 8 hours/night. So nightly your expenses are $320 for dealers and $33 for rent. Let's be super optimistic and say you fill 2 tables on average for 4 hours/night. Let's say you get 25 hands/hour in and charge $2 in rake. Let's say 20 of those hands are raked. So 20 times $2 times 2 tables = $80/hr times 4 hours/night = $320/night. So being optimistic you're already in the hole, and we haven't factored in any costs yet. You're going to need security. You're going to need to pay for marketing. You'll probably want a cocktail waitress. You'll probably want video cameras. You'll probably need to hire someone to help manage the place when you can't be there.

You do realize most poker rooms hire people and pay them good money specifically to get games when they start their rooms? Casinos who already have TONS of gambling traffic hire someone to get people into their poker room. You're not going to be able to get games going running into some guys at the gym who play poker and say you run a poker room.

 

[AshanD]

Let's pretend you have 4 tables. Let's say you're going to give dealer's $10/hr. Let's say you're paying $1k/month to rent a place. Let's say you run it for 8 hours/night. So nightly your expenses are $320 for dealers and $33 for rent. Let's be super optimistic and say you fill 2 tables on average for 4 hours/night. Let's say you get 25 hands/hour in and charge $2 in rake. Let's say 20 of those hands are raked. So 20 times $2 times 2 tables = $80/hr times 4 hours/night = $320/night. So being optimistic you're already in the hole, and we haven't factored in any costs yet. You're going to need security. You're going to need to pay for marketing. You'll probably want a cocktail waitress. You'll probably want video cameras. You'll probably need to hire someone to help manage the place when you can't be there.

You do realize most poker rooms hire people and pay them good money specifically to get games when they start their rooms? Casinos who already have TONS of gambling traffic hire someone to get people into their poker room. You're not going to be able to get games going running into some guys at the gym who play poker and say you run a poker room.

I think 25 hands an hour is very low, 35 should be the low end with an automatic shuffler. Also I'm starting with one table and no rake so I start the business as a home game. Only if I'm able to fill more than one table would I expand. No rent costs since its initially run out of my living room, and I'm definitely not paying $320 a night for dealers (either I start out dealing or they cover their own pay from tips)

Filling tables will be the key but if I start this as a home game and not a full fledged cardroom then I see no problems here. The only issue is finding a place to legally do this out of my house.

 

[snowbank]

Filling tables will be the key but if I start this as a home game and not a full fledged cardroom then I see no problems here. The only issue is finding a place to legally do this out of my house.

Ya, you mentioned in your initial post you were looking to start a cardroom with $50k to work with. Now you're mentioning putting a poker table in your house. These are two very different things. If you're looking to throw a table in your house and try and make a few bucks go for it. You mentioned wanting to be fastlane in your initial post and this plan isn't fastlane.

I'm definitely not paying $320 a night for dealers (either I start out dealing or they cover their own pay from tips)

Wanting to deal so you don't have to pay for dealers is pretty much the definition of slowlane.

 

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[AshanD]

You sound upset mate. I'm just trying to piece together a plan to start a cardroom with minimal risk. What's the problem with growing a home game into a small cardroom? Seems like the best avenue to take since we get the customers first and then expand the business as growth allows. I could see this expanding from a small weekly home game to a nightly event with 2-3 tables running all night (generating $60-$300 hourly in revenues) with the way I put away money that's plenty fast for me!

 

[biophase]

There's a local cardroom here in Phoenix that is looking for players to fill its seats. They charge a huge rake and I think an admission fee.

Just reading through this whole thread it just sounds like AshanD isn't sure what he wants. There's a huge difference in hosting a home game with no rake, then adding rake, then expanding to 5 tables, then renting a place.

Anyone can host a small home game with no rake. Once you start asking for rake, the game changes entirely. People will want more because now you are running a business.

For example, this forum is free. If the site goes down 4 hours, oh well I can't complain, it's free. If this forum charged $10 for a membership and then went down... Now you got a bunch of members complaining.

Once you charge a rake, the casual players that you have coming to your room may not come or they may want better security, better accommodations.

If you really want to do this AND you like to deal poker and PLAY poker then go ahead and set up a home game. If it expands and you run out of room, then suggest you rent a place and use the rake to cover expenses to your players. See if they go for it.

 

[snowbank]

You sound upset mate. I'm just trying to piece together a plan to start a cardroom with minimal risk. What's the problem with growing a home game into a small cardroom? Seems like the best avenue to take since we get the customers first and then expand the business as growth allows.

Why would I be upset?

You mentioned you wanted to be in the fastlane and said you are going to deal a poker game yourself to save money on dealers. That's not fastlane. I think you are taking advice the wrong way. I said if you want to try and make a few bucks running a card game out of your house go for it. It's not fastlane though.

 

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[neverfastenough]

You sound upset mate. I'm just trying to piece together a plan to start a cardroom with minimal risk. What's the problem with growing a home game into a small cardroom? Seems like the best avenue to take since we get the customers first and then expand the business as growth allows. I could see this expanding from a small weekly home game to a nightly event with 2-3 tables running all night (generating $60-$300 hourly in revenues) with the way I put away money that's plenty fast for me!

There's NOTHING wrong with being optimistic. One just needs to make sure that they aren't blinded by it.

 

[Bilgefisher]

There's NOTHING wrong with being optimistic. One just needs to make sure that they aren't blinded by it.

Very good statement!

 

[snowbank]

There's NOTHING wrong with being optimistic. One just needs to make sure that they aren't blinded by it.

:iagree:

 

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[Luke12321]

Ashan, nobody is getting mad at you. Snowbank is just trying to get a feel for what you are trying to do and trying to explain to you the difference in your idea and a fastlane idea.

Dealing cards all night in your basement to make $100 a night, isn't fastlane. Setting up a legit business and scaling it to several locations, now that is fastlane. We are just trying to help come up with how your idea (cardroom) can be scaled into a fastlane business.

 

[AshanD]

I think we need to define fastlane. Is fastlane:

A) Starting a business that is a big money maker right from the start
B) Starting a business that can eventually evolve to a big money maker

Because if it is B then I believe going from home game to cardroom is a fastlane idea.

My most immediate goal is not necessarily to make the most money in the shortest possible time. IMO that's a terrible mindset for starting a business. I want to make sure the business is off the ground and WORKING first. That's why I prefer the cardroom instead of online, and a simple home game before a full scale operation.

 

[mauriceochu]

I read that big thread on playing poker and while it sounds nice, I think the fast lane approach is to be the cardroom, not the player. The cardroom is the big winner from what looks like the small amount of rake they take from each pot. $2-$3 per hand x30-40 means the room is taking $60-$120 per hour in rake per table. Not a bad business at all!

Problem is the regulation is high in pretty much every state for a small timer. Therefore I'm looking outside of the US. I have the means to start a small cardroom, about $50k in savings. Do you guys have any suggestions for a place to start such a business without having too much legal red tape to cut through? And FYI I am open to learning a new language so no restrictions there.

hi yeah, if your still interested, I'm also looking at setting up a cardamom in cork city. my number is +353874736493 names Maurice I live in cork city, ireland if your interested in investing, get onto me

 

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[Aidan04]

hi yeah, if your still interested, I'm also looking at setting up a cardamom in cork city. my number is +353874736493 names Maurice I live in cork city, ireland if your interested in investing, get onto me

Wow what the F*ck you really revived this thread from 2009

It has literally been 15 years, this guy is likely long gone.