Solution to rakeback issue in online poker is available, says Bodog Network 25/09/2009
Bodog Network has found a way of addressing rakeback, the key concern affecting the online poker sector, according to its vice president, Jonas Odman.
Odman and Bodog Network chief executive Patrik Selin, founder of the Ongame network and more recently Gnuf, have been presenting their new poker product to industry figures as the “unique and ultimate solution to the rakeback problem that all poker networks experience today”.
With rakeback sites within poker networks poaching high-raking players from one another by offering direct or affiliate-based rakeback, Bodog Network will address this by changing the way the rake is distributed.
“The root of the problem is the way rake is distributed among players, and that is where the Bodog Network intends to address the problem,” Odman says.
Losing, casual players are the type of players poker networks want, but Odman says “the way the rake is currently split, winning players get a (too) large proportion of the rake” and skins on the network end up having to slash their margins to put the rakeback deals on the table needed to attract high-raking, winning players. This progressively erodes the money left in sites’ marketing budgets to spend on attracting losing, casual players, starving networks of the liquidity they need to grow in a sustainable manner.
Odman says his company will address this by allowing “operators who bring in losing players to make significantly more money than today. This will encourage them to market their poker product even more. Winning players, on the other hand, will be worth so little that there is no point competing for them”.
Odman added: “The new system will create a much better poker economy for all: operators, affiliates, and poker players”.
The rakeback issue has been covered extensively in recent months by eGaming Review, with former William Hill Online chief operating officer sparking off a fiercely contested debate by calling for the poker industry to find a solution, Boss Media taking steps to encourage licensees to bring in more fish and eGaming Review featuring it as its August cover story
Odman will be giving his viewpoint on the rakeback issue in the October edition of eGaming Review.
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Posted: 25/09/2009
User comments
hmmm
Good luck guys, this will be a disaster for the operators who wont make money on their winning players (usually the winning players (<10%) generate >90% of the rake). With this you will try to steal the fish internally in the network instead of the VIPs, so i wonder how clever it is. The problem with everything is lazy owners marketingmanagers who all try to take the easiest way to recruit customers and make money, by stealing existing through better offers within networks. So create a internal policeforce who chase rakeback deals on Forums like twoplustwo, direct contact with affiliates etc and set up a system with 2 warnings, after that you shut them down.
Jonas
'The Rakeback Mafia', you are perfectly right that your current rakeback model won't work. However, there ARE already many affiliates who bring net depositing players to operators, and these affiliates will make significantly more money on Bodog Network than today.
'hmmm', as a poker network, you don't want to police your business partners. With this unique rake distribution model, we will not have to.
Calvin Ayre
This is brilliant Jonas. I used similar logic to turn the sports betting industry upside down in Costa Rica a decade ago.
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The Rakeback Mafia
That's an absolutely ridiculous proposal. It wouldn't work for two obvious reasons. 1. If a site offers us 45% gross revenue for referrals, and we promote 30% rakeback, how can we then tell our sign ups that we actually can't afford to pay them the rakeback as the sites aren't paying us any money because the player has been winning? Do we promote rakeback for loosing players only? 2. Any affiliate promotion that isn't based on rakeback is centred around providing good quality poker information and strategy. This proposed system will mean that it isn't in our interest to provide resources to improve our customers ability, as that'll ultimately result in us loosing money when they improve and start winning. What these measures would do is make it impossible to promote any sites who implement them, which in turn would mean that the sites customer base would eventually dwindle into oblivion as they loose out to the sites we are promoting. Totally thoughtless in my humble opinion.
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