3 Ways the Coronavirus Will Disrupt the Poker World

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Unfortunately, Coronavirus is easily transmittable, with each infected person having the potential to infect an average of 2.5 others. This means exponential, not linear growth.

This poses serious problems for health care systems worldwide (as we’re already seeing in China, Italy and elsewhere), but in particular in the U.S., where it’s unclear if testing will be free and most people can’t afford proper hospital care.

As the virus spreads, I feel it’s my responsibility to raise awareness for what I believe to be a likely outcome for the poker community. That said, I’m confident my analysis here applies to many industries, case studies of which are coming in my next article, ‘Will the 2020 WSOP Be Cancelled Due to Coronavirus’.

As someone who not only benefits from playing poker, but also runs a poker training site and has income derived from coaching and training products (requiring people to be playing poker), it’s clear that these predictions, if true, would negatively influence me as much as anyone.

I say this because I want readers to know that my default bias is to not want nor think what I have outlined below, but it is still what I believe to be true.

Three Reasons Why Coronavirus Will Disrupt the Poker World

The coronavirus poses three distinct risks to the poker world. Each one of them in isolation has the power to disrupt the industry for a period of time, but the likely convergence of all three simultaneously increases the odds dramatically.

1. Public Response to Coronavirus Will Reduce Demand for Poker

As I wrote in my recent article about the behavioral response to the Coronavirus in Italy, people will not want to gather in crowded spaces. I’m seeing this already in Italy. Local bars, coffee shops, restaurants and stores in our town have seen a severe reduction in traffic, due to lack of demand and to the new measures put in place to reduce the spread of infection (such as bars and coffee shops closing from 6 pm to 6 am, customers not being allowed to stand by the counter and having to keep a meter of distance between each other).

Of course, and especially in a quaint town like where I’m currently staying, this is a strong hit for the small businesses, many of whom are already struggling in a stagnant economy. Some coffee shops decided to close temporarily until the virus subsides, others are trying their hardest to attract clientele by turning lemons into lemonade, advertising the ‘aperit-virus’.

Lack of demand for these staples of Italian culture is also an extreme measure taken by the citizens. As anyone familiar with Italian culture can attest, it’s quite a sacrifice to give up your morning espresso and afternoon ‘aperitivo’, but people are doing it.

This is telling of how people will behave if and when this hits their hometown. The question you must ask yourself is, ‘what activity are people most likely to limit?’ It’s my firm belief that discretionary ones, like poker, are amongst the first ones to go.

Not only are they obviously unnecessary for survival, it’s a tough sell for a husband to convince his wife and family that in the midst of a global pandemic, while the family is avoiding social contact and schools are closed, that he’s going to punt a few grand on poker.

It’s just not happening.

And what you have to remember about poker is the requirement for the ecosystem to function. In order for a game to run, several amateurs need to be playing (at the very least to have it be worth one’s time). For a working professional, poker is a luxury, and in a crisis it’s the first activity one will avoid.

This problem is exacerbated because poker is played in a casino, where the transferring of dirty chips and cash, as well as the mandatory close proximity to others, makes it a thriving environment for transmitting coronavirus (more on that in a minute).

In short, the demand for playing poker will largely be reduced. Poker is not the only industry which will get hit. Fear will set in and people will avoid crowds, meaning restaurants, bars, coffee shops, museums and movie theatres will all get hit too.

People need to wake up to the fact that coronavirus isn’t merely a disruption in the supply chain, it’s a demand problem.

2. Market Pullback and Volatility Makes People Risk Averse

Coronavirus is going to hit us in several ways from an economic standpoint with respect to the poker community.

First, there may be less liquidity, but as I’ll explain in a moment that’s not a fundamental requirement for people to play less poker.

I originally started advocating this in late February, before cases were discovered in the States, that this would dramatically impact the U.S. stock market if and when it hits home. That begun playing out even before “Patient One” was discovered in Northern California on Feb, 26th, but rather when the coronavirus started spreading throughout Europe.

This is not financial advice and only reflects my personal opinion. Ultimately, you’ll bet on what you believe to be true. What’s important is not whether you agree with me on everything, but that you are aware that this is a potential storyline for how this plays out and that you are prepared for that reality.

The second way that coronavirus will affect the economy is people simply having less income due to businesses closing down or by a reduction in revenue. This may happen because companies decide it’s no longer safe for people to gather in large numbers, or, in the case of a service business, there’s simply less demand from clients (a combination of other people are spending less due to their own financial uncertainty, and not wanting to gather in public places). Again, it’s a demand problem.

Both of these factors will combine and result in people playing less poker.

3. Poker Rooms May Close

Furthermore, but not to be understated, Macau was able to reopen quickly because both them and Hong Kong took immediate and severe measures to contain the spread, which has yet to transpire in the U.S. If this happens stateside, plan for longer delays.

I believe it’s very possible similar measures will be taken in the U.S. and casinos alike. They should be; it’s the appropriate response.

How Long Will This Last?

I don’t have a great timeline for my predictions as to how long the poker bear market will last, simply because there is so much unknown about the virus at this point. Personally, I always plan for the worst-case scenario, so I’m prepared no matter what.

That’s why my timeline is at least a year out. If things get better before, I consider it a freeroll. I urge others, especially those whose income derives in part or all from poker, to do the same.

I’d like to reiterate that I hope I’m wrong on pretty much everything I stated above. But, I believe it’s irresponsible at this point not to plan for some or all of the events I listed transpiring, if nothing other than a hedge.

What Can You Do?

While this may be especially helpful in a crisis, it’s a prudent habit to develop as you will inevitably have both more options and reserves.

If you found this post informative, please share it with someone who would benefit.

Thanks for your attention.

Alec

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