We've found the solution to the rakeback problem 02/11/2009

Jamie

So the plan is to make the losing players lose even faster by forcing them to pay the majority of the rake?

Or are these calculations done on a level inbetween so that only the "owner" of the player is affected?

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Anonymous

Even with a radical re-allocation of rake, I would still back a winning player to generate more revenue for me than a losing one. Unless my losing player is a cash cow, generally they will have a very limited lifespan and play very few raked hands. My winning player has a longer lifespan, plays a far higher number of hands and churns his/her deposits and winnings relentlessly. As an operator, I would still rather have a handful of premium players feasting on network tables than an endless procession of losers who cannot easily be retained and play very few hands.

Since winning players are generally market-educated and aware of their value to an operator, I would always have to provide benefits in lieu of rakeback via a reward program. Under the re-allocation proposal, I woudl not be able to fund that program to provide for the expectations of the winning players unless I funded it from the rake generated by my losing players. Since my arguement is that I would generate less revenue from those players, I would be concerned about my ability to sustain the reward expectations of my winning players.

I'm also very sure that the revenue generated by my losing players would not sustain the costs of a player aquisition campaign - and so from this point of view, I see the rake re-allocation as extremely restrictive and unbalanced in a competitive marketplace.

I do agree that networks need a supply of losing players, but I don't know how I'd feel being an operator on a network that imposed a rule to which sought to manipulate my aquisition strategies in this way for the benefit of the network itself. If you have a stand-alone game, then fine - do as you wish, but as an operator, I'd rather you didn't push me into purchasing low quality traffic.

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Jamie

I think you seem to be missing the point that without that "low quality traffic" your "premium players" would no longer have anyone left to feast upon. Hence the network liquidity would naturally shrink and they would move elsewhere.

I see the logic proposed here. The winning players do not really need a big "cashback" incentive to play regularly, the biggest incentive possible is weak opposition. Therefore concentrating loyalty rewards on the less successful players will extend their lifetime and keep the games good for the top players.

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Mike Gibraltar

Poker has become like insurance. The pricing of rakeback and loyalty schemes are so transparent on comparison sites and forums that individual players will move to where it is most beneficial to themselves. This in turn means that as an operator you win a substancial amount of business where you are the cheapest in the marketplace and therefore underpriced.
Some players view this as the biggest proportion of rakeback that they can receive and other (who may be more educated) also balance this with the player quality on a particular site (E.g Pacific is very fishy and it more than makes up for smaller rewards IMO).

Unless every network addresses the way that rake is redistributed at the same time players will continue to go where they get the best deal.

I agree that getting new blood into the system is the best way to maintain a balanced poker ecology however it will be hard to convince poker skins to attempt to acquire only (or more) losing players as this would no doubt increase their retention costs.

Surely the main problem is that all affiliates with bad traffic want CPA deals and that all affiliates with good traffic want revenue share....because of this in both cases the poker room ends up worse off.

Not saying it would be easy but if there were no rev share deals it would encourage more affiliates just to bring volume rather than quality! Just a thought.

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Anonymous

I guess that explains why Bodog has so little traffic. Way to go Odman.

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