88 got into trouble because they allegedly gave lines of credit to the action players. Maybe this is why the games were so juicy.

Lodge doesn’t extend lines of credit. They are an honest business by all accounts. Nobody has ever reported issues with payout.

You think Polk’s lawyers didn’t take a look at the balance sheets to confirm everything is on the level. I mean come on.

Don't worry. Brad Owen, CPA has all that covered. The Lodge is going to the moon. This is gonna be the next Google, the next Amazon, you name it. Best get in soon before the VC firms get a piece.

Yawn.

Good luck to them I say. If they can get the meet ups as big as they have plus more regs in hopefully they do well.

Uh Tom not speculating on anything in regards to Polk. Tom has had as much (or maybe more) to do with Doug's ascension into poker media space as Doug himself.

It's awesome to see he got in on the deal. Guy is the poker YT GOAT. Hope I'm wrong about the legal issues and he does well on his investment.

What are you talking about no one had lines of credit that I know of at 88 but even if they did I doubt 88 was owed over 1 million from these action players you are referring to and not able to recoup it. Seeing as the games are all the same players at legends as 88 I doubt that what you are saying is true. What caused them to go under is just bad business like full tilt UB and a lot of businesses in the poker industry that were unregulated/poorly regulated. You get large amount of player funds (people take chips home especially for big games or have boxes with large amounts of chips in them). Instead of making a reserve to cover them they use that money/take it out of the company. When people mass withdrawal because of competition or being shut down or whatever they don't have reserves to cover their liabilities.

If casinos do a expiration period of outstanding chips and have previous owners cover them/swap them out to ensure SOMEONE ELSES BALANCE SHEET is correct and implement their own chips which they can ensure there probably is a good reason but I haven't heard they're doing that and there probably is a good reason why the previous owner wouldn't agree to that and is getting out... It's a lot larger than you'd expect and probably not reported 100% accurately as it is difficult to actually track.

I don't know the details of the deal and I don't really know the true number of these things only the past owner can realistically as much as you audit/have good lawyers etc so hopefully this works out well but to say their lawyers were better than Johnny Chan's is pretty laughable. There are many reasons why buying an existing business in an unregulated industry is opening the door for you to inherit issues though even if it is a good and honorably run business.

I wouldn’t have asked for sources if I’d known he was Thomas Keeling lol.

It is a bit hard for me to know who the celebrities are on here because I’m a new account. Well, Malmuth is obvious. But others less so.

If an owner or a friend of an owner borrowed chips from the house that would technically be an extension of a line of credit. Which would be impossible to track since it wouldn’t have to be an official transaction. It could have been viewed publicly as a staking deal. Did Chan stake players? Of course staking from business money would be horribly corrupt, but it’s not as if anyone would have known.

Or maybe you’re correct and an employee/owner outright stole chips and sold them to players outside of the premises of the room.

You make an interesting point about outstanding chips. One of the issues with checking the balance sheets is that rooms can have chips in circulation. Some are in safety deposit boxes and rooms typically have a master key so they can run accounting if necessary. But some players do take large denomination chips home. Which can be an issue and the rooms try to discourage this behavior but of course they can’t control it perfectly. It is always possible to compare cash-on-hand and chips-on-hand. You have to hope they add up to a constant amount over time. any difference could be attributed to chips in circulation but it could also be due to theft. I guess one can never be sure that a poker room is solvent?

Anyway, I’m pretty sure the Lodge has been operating on the level. I’ve known Bob, Rosa, and Jason since 2017 and have played with Jason on a number of occasions. As far as I’m aware there have never been any question of their ethical behavior by the community, whether in poker or in business.

Would you mind sharing some of the thoughts that your ownership group has regarding the legality of these poker rooms and the risk of them being shut down? What kind of due diligence did you guys do before making the investment?

Doug playing the stream now at The Lodge

I don't want to derail the thread with more regulatory debate, but I'll just say that a great deal of research and consulting went into it and I'm very happy with the deal.

Also if you ever get a chance to bet on anything Doug is doing you just fistpump do it lol

Each new owner needs entrance music. I want to hear some live Bing Blang Blaow


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Really? I dislike him but at the same time I can see why other people do like him. A lot of his jokes are funny (some are corny yes but some are quite good) and he's a very revealing person which is nice in a era where everyone online is only showing the good times and are frauds.

As long as owner understand nuances of TX laws (w/legit written legal opinions) keep the hookers, blow and gangsters out of the club, create positive vibe/well run club, engage with friendly local politicians, then plenty of runway to build a great room and provide needed legit rooms in TX

My comments mostly about long term , where this will come to head at some point but will require new legislation (mutli year process) to give any prosecutors so inclined , solid tools to enforce. where now would be an interesting legal battle. 50/50 imo. Thus not as many willing to go to battle and lose.

Short term risk is not non-zero but would require some fluke... i.e. high profile robbery multi people shot and killed , club ownership indicted linked to crime syndicate in a high profile case (ala Bicycle casino saga of decades past). At that point , local officials would be forced to do something.

all imo ofcourse. dyor

Hey guys just swinging by to answer questions. Will start off with a few different topics.

We have a good number of owners varying from larger pieces to smaller pieces. Peoples responsibilities vary. Ryan Fee is an owner, but for capital and for cross synergy with Upswing, he isnt working on the room day to day. The more people will be working on the room and/or the more capital they invested, the more shares they have. This isn't rocket science. If someone has 2% of a profitable business its still a nice piece to have especially as we expand if their workload or capital makes sense for them. I put together a team that I felt had the best chance to succeed, most of these guys I have worked with on companies before.

The Texas state legislature meets every other year, it just met about half a year ago. So we are ~1.5 years out before we get any kind of significant change on the legal front. Even then from what im hearing it is generally positive towards poker and the legislature here is aware of these rooms. These arent in the shadows, there are pushing 70 of these across the state. Texas tends to be very pro business and I dont see that changing.

The worry is that big casinos decide to play ball and things end up going down the licensing route. Its my hope we will have established a large enough brand here to be able to get a license, time will tell but I think that could end up being a positive for us.

Also over the next 1-3 years we are going to look to open some additional locations, so that should offer us some more flexibility and have less of all our eggs in one basket so to speak.

Happy to answer reasonable questions here that people may have.

Thanks the details Doug. Texas is definitely pro business but as you probably learned during your due diligence, the determination of whether the state is "pro" any specific business entity vs its competitors is a function of that business's political contributions and connections. I provided an example of this earlier in the thread about Tesla vs Texas dealerships. To that end I think you'll be up against it when/if larger gambling businesses decide the market is worth their trouble and start throwing their influence and money around. Not sure if your consultants have provided a guesstimate of how much political vig you'll have to pay to give you a fighting chance when the time comes for legalization there. Until that happens there's also event risk PTLou correctly identified which may precipitate unanticipated enforcement action.

All that said, the business looks insanely profitable and that can only improve with your and your partners' draw to bring more players in. I hope you and everyone involved make a fortune.

Doug do you worry about cannibalizing your business by opening multiple rooms?
Or is your strategy to take market share ?

Have you considered announcing?
Skull mike is tolerable but slick rick needs to go.. it would be nice to hear unedited real times thoughts from the supreme leader. You and Joey Ingram would probably be the nuts in the booth.

Will you be giving a mic to all the players like hustler live has so that we can actually hear table talk and it becomes watchable?

Are Neeme and Owen getting a premium or markup for bringing in their sizeable platforms in addition to the money that they invested? In other words, did they get more than 1% share for every 1% of dollars they invested into the company?

Do you now get what dnegs was talking about when saying more rake is better

If that was the case he would have invested in the private games instead.

Doug and Joey have a million other things going on they probably dont have time to devote to announcing mid-stakes poker games other than on special occasions. but i agree the production does need to be improved it is severly lacking compared to the hustler and LATB. this is what i posted in another thread:

That was a good one.

What's the biggest game The Lodge expects to run on a regular basis?

Congratulations Doug, I think you have correctly assembled a good team of guys who all look to have a strong work ethic and seem to lack any life leaks.

As you pointed out the major downside risks are legislatively related. I do think its definitely a non-zero risk.

Also being a cash based business there are some huge risks relating to security at the venues.

If we were to see a glut of incidents it could force the legislature to act.

Do you plan on keeping the name "Lodge" or will you be re-branding so you can franchise the name in other jurisdictions?

Hey Doug, long time Lodge member here. Congrats on the purchase. It’s a terrific room, great player culture, and has always had player-friendly management.

Some small suggestions for the future:

Lodge should consider offering discounted Upswing memberships for members. For instance if you come to play in a meet up game and acquire even a single month membership, you get a 50% discount code on Upswing for a specified time period. This will be a net positive for both of your poker businesses, I believe.

Second the Lodge should think long and hard about how to maintain a strong player base for 1/3 and 5/5 so that these games run regularly. Personally, one of the things that brought me to the Lodge circa 2019 is how robust the 1/3 player pool is in comparison to the other clubs. It would be also great to have a regular 5/5 game. There are some challenges there since the 1/3 and 5/5 games have intersecting player pools and when one game runs there might not be enough players to support the other game. The 5/5 regs probably know more about the challenges of running that game — you could consult them for their feedback.

Also, please get rid of the 1/3 $600 cap game. Match the stack is where it’s at IMO.

Best of luck with the new venture!