PokerTek™, Inc. (NASDAQ: PTEK ), headquartered in Matthews, NC (a suburb of Charlotte), develops and markets PokerPro® and PokerPro® Heads-Up™ electronic poker tables and related software applications. The PokerPro® System is designed to increase casino revenue, reduce expenses and attract new players into poker rooms. PokerPro® tables are located in the United States, Europe, Australia, Africa, Southeast Asia, and on major cruise lines. PokerTek recently entered the amusement space in 2007 by introducing Heads-Up Challenge™, an electronic heads-up poker table for bars and restaurants that targets adults who play for amusement only.
A Brief History of PokerTek
2003 – Founders Lou White (CEO), James Crawford (President) and Lee Lomax (Board Member) begin working on a poker-related business venture with Lyle Berman, which includes an electronic poker table that doesn’t require a dealer. PokerTek is born.
2004 – PokerTek hires its first employees, including Hal Shinn as CTO. The team works diligently to produce a prototype. Before the dust settles, half a dozen designs are built and tested. By year-end PokerTek has grown to ten employees, and the team has produced the first functional PokerPro® Table and System. In the early afternoon of Christmas Eve, 2004, employees celebrate by playing the first ever Texas Hold’em tournament on a PokerPro® Table.
Early 2005 – PokerTek ramps up for manufacturing production. Incremental improvements are made to the software and table design. The team prepares for the first customer launch.
May 2005 – Poker enters a new era as PokerPro® makes its casino debut. “The First Hand” is played at the Seminole Hard Rock Hotel and Casino in Hollywood, FL.
Oct. 2005 – PokerTek IPO on NASDAQ.
Jan. 2006 – PokerTek enters into an International Distribution Agreement with Aristocrat Leisure Limited, the largest Casino Gaming provider outside of the U.S.
May. 2006 – PokerPro® is named the most Innovative Technology Product of the Year at the Gaming Technology Summit. The first PokerPro® table, launched one year earlier, has dealt over 175,000 hands.
Nov. 2006 – PokerTek launches the world’s first automated heads-up poker table.
Jan. 2007 – PokerTek installs the world’s first 100% automated poker room.
Apr. 2007 – Harrah’s Entertainment, the largest operator of casinos worldwide and home of the World Series of Poker, selects PokerTek as its exclusive provider of automated poker.
Jun. 2007 – PokerTek installs its 100th PokerPro® table.
Jul. 2007 – PokerTek unveils Heads-Up Challenge™, a two-player entertainment game for bars and restaurants.
Aug. 2007 – PokerTek installs the largest automated poker room to date, with 19 tables at Four Winds Casino Resort. PokerTek installs the first poker tables of any kind in Macau, the largest casino market in the world.
Sept. 2007 – Chris Halligan named new CEO and founder Lou White becomes Vice Chairman of the Board.
Oct. 2007 – First Heads-Up Challenge™ table played at Hickory Tavern restaurant in Charlotte, NC.
Also, Mark Roberson named new CFO.
Nov. 2007 – PokerPro tables are installed in every ship in the Carnival Fleet. The 8th land-based 100%
all-PokerPro room is completed at Mohegan Sun Casino.
Dec. 2007 – The first Heads-Up Challenge™ — Home Edition is sold to a consumer.
Jan. 2008 – PokerTek brings poker to Montreal with 43 PokerPro tables across 3 casinos.
Feb. 2008 – Casino de Montreal hosts the largest automated poker tournament ever, with 240 players and only 4 staff!
Apr. 2008 – PokerTek places its 250th Heads-Up Challenge™ amusement table.
Jun. 2008 – The first PokerPro automated tables are installed in Atlantic City at the Trump Plaza Casino.
Aug. 2008 – The first PokerPro automated tables are installed in Las Vegas at the Excalibur.
Nov. 2008 – PokerTek sells its 1000th Heads-Up Challenge™ amusement table.
Industry 
Poker is one of several card games in which two or more players strategically bet against each other. Many casinos
and card clubs operate poker rooms that typically consist of tables at which up to 10 players play any of several types of poker
against the other players at the table. A dealer employed by the casino or card club is responsible for dealing cards, calculating bets, distributing payouts and collecting the amount the casino or card club charges as a service fee. Unlike most other games played at a casino, where the casino may win the full amount of a player’s bet, the casino or card club’s revenue from the poker room is limited to a service fee, typically a small amount taken from each pot (the “rake”) or a fixed amount charged at a regular interval. Accordingly, poker typically generates lower relative profits for the casino operator than slot machines and other table games. Our gaming products seek to improve the profitability of poker by enhancing the operator’s revenue opportunities while decreasing their startup and operating costs.
The PokerPro system is an automated poker table with electronic components that allows players to play against one
another in a game of poker using electronic cards and chips. We originally introduced a 10-seated table which has the look of a
traditional poker table, and in November 2006 introduced a 2-seated version. Each player position has a touch screen monitor
to view their cards, chips and other game information. The players use their touch screen monitor to input game decisions such
as betting, checking and folding. In the center of the table is an LCD video screen which displays information such as chips bet
by each player, total pot or pots and community cards dealt. Electronic cards are dealt to the players by a central server, which is physically separate from the table.
In addition to the table, the PokerPro system comes with a Cashless Wagering System (“CWS”), which creates and
maintains player accounts and transacts cash-in and cash-out functions. A player who wants to play on the PokerPro system
must first establish an account in the CWS and receive an account card. If a table position is open and available, the player can insert the account card into the PokerPro table and begin playing. If the tables are full, the player can use an automated kiosk to get on a waiting list for the game they want to play. There is a waiting list display which indicates where a player is in the queue and when a position becomes available, directs the player to the appropriate table.
The PokerPro system also has administrative tools which are designed to allow casino management to stop, start and
monitor the poker games in progress. They allow management to change the type of poker being played, the betting limits and
the number of players required to start a poker game. The administrative tools are also designed to track statistics about game
play and specific players, such as the number of games being played per hour and the average pot size of each game.
The PokerPro system currently allows players to play limit and no-limit Texas Hold’em in both ring/cash games,
single table and multi-table tournaments. We have successfully tested Omaha, the next most popular variety of casino poker,
and we are in the process of designing further improvements to the PokerPro system to allow other varieties of poker to be
played. Poker games offered by the PokerPro system are designed to be played in accordance with the same rules that apply to
any live poker game, including any applicable pot and wager limitations.
Market Opportunities
The game of poker has been steadily increasing in popularity. We believe we have an innovative product from both the casino and the player perspective and our goal is to capture a significant share of this growing market.
Commercial Casinos. North American commercial casinos have experienced significant growth in poker tables over
the past five years. This segment of the market represents a significant market opportunity for us. The American Gaming
Association (“AGA”) reported that there were 455 commercial casinos operating in 11 states that offered legalized gaming in
2005. Of the 11 states, Nevada and New Jersey were the largest commercial casino markets in North America in terms of gross
gaming revenue with 268 casinos and 12 casinos, respectively.
Competition
The overall market for gaming devices is mature and characterized by numerous competitors that develop and
license proprietary table games. We are aware of three other companies offering automated poker products and additional
competitive forces could join the market. Potential competitors include established manufacturers of gaming devices that may
have widespread brand recognition and substantially greater resources and marketing capabilities than we have. In addition,
they may have some of the regulatory approvals required to market and sell automated poker tables in our target markets.
We also compete with gaming supply companies and with other gaming and entertainment products for space on the
customers’ floor, as well as for the customers’ capital spending. Some of the larger gaming supply companies with whom we
compete are International Game Technology, Progressive Gaming International, Shuffle Master, Inc. and WMS Industries, Inc.
Products
Heads Up Challenge
Why Heads-Up Challenge™?
- The most revolutionary game to hit the market in years
- Proven to drive business to bars and entertainment venues
- Capitalize on the world’s most popular card game
Game Features
- No Limit Texas Hold’em Heads-Up Tournaments
- 2 Players compete against each other for bragging rights
- A scrolling leader board ranks players by number of wins
- Bracketed Heads-Up tournaments for 4 to 8 players
- Variable chip stack starting amounts (10k, 20k & 40k)
- Add-on feature allows players to continue game by purchasing more chips
- Traditional poker actions, realistic movements and sounds
Table Features
- Innovative heads-up design and cocktail table height
- Fits anywhere: 3’6”H (106.7cm) x 3’6”W (106.7cm) x 2’3”D (68.6cm)
- Bill and coin acceptor, as required by region
- Standard 3-prong plug (120v, 60hz, 600wt), international (230v, 50hz, 600wt)
Monitor Kit Add-On
- Increases the game’s visibility in a crowded bar atmosphere
- Onlookers can easily follow the live play-by-play action
- Significantly increases Heads-Up Challenge’s earning potential
PokerPro
PokerPro® is changing poker rooms by automating, accelerating, and enhancing the poker experience for players and for casinos.
Our products offer new ways to increase poker room profitability through games and features not currently offered on manual poker tables.
Poker rooms that use PokerPro tables need fewer staff, generate more revenue, and have complete flexibility to run the most popular game variations on any table at any time.
Fast, Mistake-Free Dealing
The PokerPro® System increases hands dealt per hour, which directly correlates to increased revenue (up to 50% more in Texas Hold’em and up to 100% more in Omaha).
No wasted time mediating table disputes, PokerPro is 100% accurate.
Decreased Labor
It requires fewer staff to run a fully-automated poker room, and allows more time to focus on satisfying guests.
Game Flexibility
Unlimited number of configurable game profiles.
Allows operators to run their poker room like a manual room, but more efficiently, since games can be changed at the click of a button.
PokerPro® Heads-Up™ provides a profitable way to offer heads-up poker.
Extensive Reporting
Traditionally, poker room managers have had limited reporting tools. But with PokerPro’s daily/weekly reporting capabilities, managers now have extensive information to run a productive and profitable poker room.
