would I have had to be there, or can you explain?
I can try to explain. So, Alastor, a character from Hazbin Hotel, is canonically Asexual, often known as an Ace. However, he is not aware that the word exists, so does not use the label. One of his friends tells him that he's an Ace in the hole. This joke works on so many different levels:
1) It's a great way to call attention to his Asexuality, without outright saying it in a super obvious way. He's confused because, again, he doesn't know there is a label for it or what it is. It also shows that even his friends know about his Asexuality, just not himself.
2) An "ace in the hole" can be used to refer to someone who is really powerful, and/or commonly underestimated and not taken seriously, despite their strength, which is true for him as well.
3) "Ace in the hole", if said just right, can also sound like a**hole, which also fits him, because he's a jerk sometimes.
I love the joke because it doesn't overstay it's welcome (only being used once), is funny, has multiple layers to it and if you get it, you get it. Plus, it really caught me off guard the first time I heard it. Here's the clip if you want to actually hear it. The way he says: "A what now?" is just so funny to me.