Exec raises poker to new heights

Apr 12, 2005 7:00 AM

Lyle Berman is a world-class poker player, a winner of three gold bracelets at the World Series of Poker, and a member of the Poker Hall of Fame.

Nowadays, however, Berman spends more of his time marketing poker rather than playing it. In addition to running Minneapolis-based Lakes Entertainment Inc., Berman is chairman of the board of the World Poker Tour (WPT), an organization he co-founded four years ago with Steve Lipscomb.

Anyone who follows poker knows that the World Poker Tour, and its Wednesday night broadcasts on the Travel Channel, have helped revolutionize poker into a national pastime.

As interest in poker has grown, so has the size and scope of the World Poker Tour. This month, the WPT concludes its third season with its annual championship at the Bellagio, where the prize pool is expected to top $10 million. For the season, the WPT will have awarded more than $100 million in prize pools.

Last week, the WPT christened its newest venture, an international online poker site, WPTonline.com, in conjunction with WagerWorks, a firm that specializes in Internet gaming systems.

"This is the next step in our global branding initiative," Berman said. "The site came online last week, though we don’t plan to initiate a full-blown marketing program for a couple of weeks."

In addition to allowing poker players to compete against each other, the WPT web site will complement and reinforce the WPT’s growth around the world, Berman says.

"The World Poker Tour is now airing in 60 countries, and the addition of an international gaming site provides a synergistic engine for growth," Berman said. "We believe the future of online gaming will be driven by strong brands, and the World Poker Tour is achieving the kind of worldwide recognition that will position us at the forefront of this burgeoning business."

Because of prohibitions against online gambling, the WPT poker site will not accept wagers from the United States and other jurisdictions where online gaming is unregulated.

That is a fact of life that Berman would love to change.

"The notion of outlawing online gaming is stupid," Berman says. "Lawmakers have lumped poker in with prostitution, cocaine and other criminal activities, which is simply ludicrous."

Berman said the current state of online gaming is like prohibition against alcohol in the 1920s.

"The public didn’t want Prohibition and the government eventually had to change it," Berman said. "The government rightfully learned that you can’t legislate morality, and alcohol is now regulated and taxed."

Berman said the same thing can happen with online betting, and he’s formulated a specific proposal for regulating Internet gambling.

"The first step would be to license Internet gaming at the federal level," Berman said. "The government could then tax the revenue at, say, 50 percent. The companies could afford this rate because they have a much smaller overhead than brick-and-mortar casinos.

"Finally — and this is key — players in the United States would be exempt from paying taxes on all money won on licensed Internet sites," Berman continued. "This is key because it would attract U.S. players away from off-shore sites, which would not be able to offer such an exemption."

Berman emphasized that the tax exemption would be important because the nearly 2,000 Internet gambling sites are already entrenched with revenue expected to top $10 billion by the end of the year.

Berman said he’s forwarded his proposal to some Minnesota legislators, but has so far received no response.

In addition to his majority ownership (64 percent) of the World Poker Tour, Berman is the chairman and chief executive officer (CEO) of Lakes Entertainment, which develops and manages tribal casinos. The company currently has management agreements with three separate tribes for the development of casinos in Michigan and California.

Fifteen years ago, Berman participated in the founding of Grand Casinos and was considered one of the early visionaries in the development of casinos outside the traditional gaming venues of Las Vegas and Atlantic City.

In 1998, Grand Casinos merged with the gaming division of Hilton Hotels to form Park Place Entertainment, and Grand Casinos’ tribal gaming division was spun off into a new public company, Lakes Entertainment.

For his efforts in developing those companies, Berman was honored as Gaming Executive of the Year in 1996.

A 1964 graduate of the University of Minnesota with a degree in business administration, Berman was also honored with the B’nai B’rith Great American Traditions Award in 1995.