by Louie Helm
Poker is sometimes maligned by opponents for not being a productive pursuit that contributes to society. The argument goes that, if you set aside things like the $5 million raised for charity in this year’s Big One for One Drop, you’re simply left with a bunch of folks playing cards. The argument isn’t really an argument, so much as a direct appeal to the intuition that playing poker is inherently less productive and less societally valuable than other uses of time. But how valid is this appeal?
In this three-part-series about the effects of poker on society, we will apply a common measurement to identify some of the societal upsides that the existence of the poker world entails (part I), compare the societal effects and the career paths of people in the poker business themselves to those of another professional sport (part II) and then eventually engage with some of the common criticism directed at the poker world (part III). While the first two posts will mostly shed light on (perhaps unexpected) positive effects the poker world has on society, the third post will focus on the disputable and undisputable negative effects.
Poker’s Positive Economic Impact; Including over 119,000 jobs
Is there a way to compare and contrast poker with other industries in a more quantified way?
Well, the standard way that industries are measured against each other when it comes to productivity and social contribution is seeing how many jobs an industry creates and how much tax revenue it contributes back to society. These are actually very measurable proxies and rather robust metrics that are often used for productivity and societal impact because they allow you to compare and contrast almost any industry to any other and see how much it contributes.
Amazingly, no one has ever calculated the full economic impact of poker. So after a few weeks of research, here are some top line statistics on poker’s annual worldwide economic impact:
- $5.16 billion in economic impact
- 108,240 jobs created directly and indirectly from live poker
- $1.25 billion in direct and indirect tax revenue from live poker
- 11,660 jobs created directly and indirectly from online poker
- $47 million in direct and indirect tax revenue from online poker
These figures are actually relatively conservative estimates. For instance, because US casino figures are more transparent, the model weights them more heavily than other figures, and therefore concludes that non-US live poker revenues may be as little as 30% of all worldwide poker activity. But even basic knowledge of Chinese and European poker markets makes me assume that this is likely an underestimate. It’s also likely that taxes paid by online poker rooms are much higher than calculated. This estimate relies heavily on data from Party Poker (because they are publicly traded) and then extrapolates across the entire online poker industry by volume. But Party Poker isn’t a market leader and they don’t have as much exposure to the more heavily taxed markets of France and Spain. This analysis also neglects the enormous potential economic impact that a federally regulated US online poker market poker could have — including thousands of jobs and an estimated $1.3-4.8 billion in annual tax revenue.
Also note that these figures completely ignore the in-game earnings of the winning players. This is only the number of jobs at casinos and online poker sites (and related enterprises) which are created with the money taken from rake in these games or contributed by poker players with their ancillary economic activity.
So without adding too much commentary, I’ll simply note that there’s perhaps some justification for poker players to take pride in the productivity and societal impact of their game. Especially for those who play a significant volume of live poker, it’s possible that they create more jobs and generate more tax revenue then the average employed citizen in their country.
‡ This analysis relies on the AGA’s aggregate 2007 US casino statistics, Brattle’s 2012 analysis of economic impacts from casinos, Bwin.Party group’s public financial statements, analyses of PokerStar’s daily profit, player numbers from Rational Group, online poker cross-site volume reports, and other statistics on world-wide gaming revenues.