By Jeff Hwang

June 15, 2007

Let me tell you a little story.

Going back to the Fall of 2003 -- when I was writing every day -- just getting to write about casinos and gambling was more of a concession to me than something that my editors at Fool HQ actually wanted. At the time, if I tried to send in more than one article on casino stocks in any given week, I was certain to get an e-mail from Fool HQ saying that nobody cares about casinos, and nobody reads this stuff. And, of course, it was probably true.

But somewhere between Chris Moneymaker, the World Poker Tour (Nasdaq: WPTE), the spread of legalized gambling across the United States, and the prevalence of online poker, poker and gambling in general has become more than relevant. When I first wrote about the World Poker Tour in January 2004, nobody in the financial press was talking about it; by mid-2005, the surge in poker’s popularity had created a media fad. And the reason I bring up that period in time is that many of the “me too” writers in the financial press often observed poker’s growth with the qualification that poker is “probably a fad,” or something to that extent.

Well, I’m not sure where they got their information from, but as the second week of Harrah’s (NYSE: HET) 2007 World Series of Poker comes to a close, I am here at the Rio in Las Vegas to tell you that they were probably wrong.

In the year 2003 BM (Before Moneymaker), there were a total of 2,519 tournament entries through the first two weeks of the World Series of Poker at Binion’s Horseshoe in downtown Las Vegas. That year, Chris Moneymaker -- an accountant and amateur poker player who had won his entry online -- outlasted a then-record field of 839 players in the $10,000 buy-in Main Event. Moneymaker’s triumph helped tournament entries double through the first two weeks of the 2004 WSOP, and then again in 2005 -- the first year the WSOP was held at the Rio.

Fast forward to 2007, and Harrah’s is now running two WSOP events every day. And through two weeks, the WSOP has processed 20,334 tournament entries -- more than eight times the number of entries through the first two weeks of the 2003 WSOP.

WSOP Tournament Entries by Week

And as I mentioned a couple of days ago, several other casino operators are capitalizing on the fact that much of the world’s poker-playing population is all in one place at the same time. Las Vegas Sands (NYSE: LVS) Venetian has drawn healthy crowds for its Deep-Stack Extravaganza, and MGM Mirage (NYSE: MGM) is hosting the Bellagio Cup III. Meanwhile, MTR Gaming’s (Nasdaq: MNTG) Binion’s downtown -- the former site of the WSOP -- is holding its first annual Binion’s Poker Classic, a series of small buy-in events that mimic the WSOP events. Incidentally, Binion’s itself generated 3,096 tournament entries through its first two weeks, which is more than it had in 2003 BM.

Now everybody in the poker world expects attendance at this year’s $10,000 buy-in Main Event to be down considerably from last year due to the impact of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which should effectively curb entries from online sites. I should mention that the tournament entry comparisons between 2007 and previous years for the individual events is a little misleading, as this is the first time that the WSOP has consistently held two WSOP events basically every day.

That said, given the attendance figures during the first two weeks here at the WSOP and across town, I don’t think there is any doubt that the world’s poker-playing population is still on the rise.

WSOP Tournament Entries by Event

*Number in parenthesis indicates different buy-in; RB means with re-buys