Open Side Menu Go to the Top
Register
PokerStars Roundtable 2012-05-14 PokerStars Roundtable 2012-05-14

05-25-2012 , 10:35 AM
cmon tournament lobby fix hurry up already
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 11:16 AM
Quote:
Originally Posted by SuperJez
cmon tournament lobby fix hurry up already
Thiiis.
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 11:22 AM
there's a software improvement thread guys and surprisingly enough stars ppl actually post there as opposed to here
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 12:05 PM
I don't really see stars doing much about it. Going by the data from Tapie from the ftp debacle. 95% of the player base were recreational players with 100 usd. So even if you assume the rest 5% were all all grinders and all making a profit; How much volume do you think that 5% play compared to the 95%. Lets just input a BS number just to get my point across. Yes the the grinders play insane amounts of games while the recreational player will only play for a hr or two. I couldn't imagine the 5% grinders to account for more than 20% of the play imo but I have no idea obviously.

So assuming the BS number I just stated, PS gets its profits mainly from the recreational players who always lose and almost all of the money ends going to rake. The winning grinders are yes raking a ton for PS and thats fine with PS. The profits pros are able to make are hit with 50% of the money going to PS.

So if the pros stay, PS still makes a great profit even though they dont want the money leaving the poker economy. If the pros leave, less money will leave the poker economy and therefore be eaten up by rake.

I am aware of the agument that if all the pros leave there will be new pros taking out that money. I do agree but i believe it will be at a slower pace. Imagine the pros now, lets just say they are elite. This elite is able to make lets say make 1000 and give 30% to PS as rake. Now lets just say all these elite pros go. now lessor pros are left. they dont play as well but still make a profit. The mistakes they make equals loses and more paid rake so these lessor pros pay more total rake for that same 1000 in profits.

IDk. Its what I think. If Im wrong in my thinking, I be happy if someone explain where my logic is flawed. Chastise away...
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 02:11 PM
Quote:
Originally Posted by djle2
I don't really see stars doing much about it. Going by the data from Tapie from the ftp debacle. 95% of the player base were recreational players with 100 usd. So even if you assume the rest 5% were all all grinders and all making a profit; How much volume do you think that 5% play compared to the 95%. Lets just input a BS number just to get my point across. Yes the the grinders play insane amounts of games while the recreational player will only play for a hr or two. I couldn't imagine the 5% grinders to account for more than 20% of the play imo but I have no idea obviously.
Yes, you have no idea. It is not only time spent on site, but number of tables too. Now try again.
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 02:55 PM
^^ If the top players leave the player pool the games will get softer. If the games get softer then the ratio of withdrawals:rake will go up in favor of withdrawals. Its in the poker sites interests to have tougher games because edges between players is smaller. Only to a degree of course. There are obvious downsides when games get too tough, like fish busting their deposits too quickly and getting turned off of the game. The reason fish bust so fast is because there are too many regs in the games that have massive pre-rake edges over them. If the reg:rec player were lower then many rec players that could be described as semi-fish could in some cases become only marginal losers and possibly break even are marginal winners at the microstakes.

Even the best players at small-midstakes often don't make much from the lesser skilled regs because the edge required to come out ahead after rake is huge.

I don't believe that Stars or the smartest 2p2ers fully understand the inner workings of the poker ecosystem because of how complicated it is. There has to be a balance between withdrawals and rake where grinders have an incentive to grind and feel that things are fair and the poker site can continue to profit at the same or higher level.

The idea that people suggest Stars just take a hit to their profits just to be nice is lol. These people are delusional. Trying to come up with solutions that will improve the health of the games and allow stars to collect more rake while allowing grinders to continue grinding with that sense of fairness should be the focus.

I think that from Stars perspective right now, it could seem pretty risky to lower rake in hopes that the overall health of the games improves and keeps fish depositing. If the plan fails then they a) cost themselves a bunch of money in short term profits and b) they have another PR s***storm on their hands.

One thing I don't get is the whole philosophy behind the reload bonus. Don't get me wrong, its a nice gesture. I'll take the $250 when I can get it, thank you very much. That $250 comes from the rake we pay( stars profits ), but I doubt they get the return they're looking for. I'm merely speculating but I would guess that a large percentage of players that take advantage of the reload are going to be grinders and the amount of recreational players that do take advantage of it and somehow manage to clear it before going bust is probably close to nil.

Most recreational players are found at the micros and small stakes, and only play like 1-2 tables. To clear the last reload bonus you had to earn 5k vpps ffs. A silverstar will take almost 7 months to clear this and I doubt very much that there are many who's deposits will survive long enough.

This is just plain bad. Fish deposits $500, clears say $50 of the bonus before getting raped at the tables and winds up feeling tricked and ripped off by the site. They then stop depositing and they tell their friends to 'beware of reload bonuses, the sites just want your money and you'll never clear the bonus because it takes a year to clear.... etc etc etc.'

You'll also get those guys that probably deposit 3-4 times to chase that bonus, move up stakes to try and clear it at a reasonable rate and these guys are destined to get raped in short time too. Again, this is bad.

I'd be really curious to see what the numbers are. How much money was cleared in the last reload bonus? $250k? That's only 1000 grinders. Could be far more than that. For most grinders clearing the $250 reload, the money never actually hits the tables. Many players have like 40+ buyins already and unless you're playing really low micros the $250 isn't going to be a big factor in shot taking.

What I think would be better for the health of the games, and the overall experience for the recreational player would be to only offer the reload to the rec player and make it super easy to clear. He's going to lose it anyway ffs, but at least it will keep him in action longer. If he gets more bang for his buck he might have a more interesting story to tell his buddies at his next home game.

The grinders will benefit because of all this extra money being injected into the economy and those benefits will be reaped more based on quality of play as opposed to just pure volume.

Stars, you guys need to cater more to the rec players. They are the lifeblood of the poker economy after all. The regs are of course needed to churn their deposits into rake but as long as their fish then regs will never go away.

Whatever happened to that idea of different badges that can be displayed at the tables?

When you guys came out with the idea to allow players to display their vip status at the tables it was gold man. I think a lot of rec players get proud when they hit silver star and they display it proudly. Its a good concept that is worth expanding on, I've got a few ideas but maybe everyone reading this thread can help come up with more:

Final table badge. Somebody binks a final table in a MTT, give em a badge that lasts a certain amount of time.

1st place badge in a MTT is another obv one.

For cash games, I think some sort of 'Action Badge' might be a good idea that can be displayed on tables where the player was the first or second player to sit down at cash table. Obviously good for everybody to encourage tables to get started quicker.

Milestone Badges: When somebody plays a certain number of hands, give em a badge.

Royal Flush, Bad Beat etc. Some of the things that PTR had, just leave out ones that have a negative image for rec players like the bot badge.

I know that Stars will inevitably start moving towards integrating social networking features into the software. In the interim how about having a player profile that you can edit and an option to allow players to view it or not. Players could include stuff like quotes or their favorite games to play etc.

A lot of these things might seem silly to grinders but they'll be fun for rec players. Look at Facebook. I get dozens of requests on a weekly basis to play the most ridiculous and childish games but these are grown people that are clearly enjoying this stuff.

Your software has been great, but you guys are really slow with this stuff. A truly innovative business approach would have had all these things integrated into the software back in like 2008 imo. Social networking isn't new anymore. Its quite old but you guys are not there yet.

If I didn't know better, I'd say you guys must hate money, but wait....

Spoiler:
I know better
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 03:40 PM
Quote:
What I think would be better for the health of the games, and the overall experience for the recreational player would be to only offer the reload to the rec player and make it super easy to clear.
basically you're suggesting not reload bonuses, but promos intelligently aimed at low volume players (not like the 10th anniv promos where the regs who played 20h/day at cap or PLO would win the cash game leaderboard). It'd be surprising and dissapointing if Stars hadn't already thought of that (also b/c it's been suggested in the forums before).

So the more interesting question becomes: Why haven't Stars done this?

Quote:
Whatever happened to that idea of different badges that can be displayed at the tables?
Well here's how it works:

- We keep suggesting things
- Stars either ignore it
- Or Stars say "we're looking into it"
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 04:19 PM
Quote:
Originally Posted by Jah Onion
Well here's how it works:

- We keep suggesting things
- Stars either ignore it
- Or Stars say "we're looking into it"
I agree with this, and share in the frustration.

To be fair tho, I think that the vast majority of the suggestions made by winning grinders are motivated by their own selfish reasons. We all want to increase our bottom line, or at least to have a bottom line exist. Its understandable, but at the same time we have to understand that Stars is a business and their sole reason for existing is profit.

People cry about the 'monopoly' that they have like they did something bad to get where they are. They got to where they are by being the best in the industry. They're still the best, and it isn't even close. It isn't their fault that their biggest competition's software is freaking worthless.

It boggles my mind that a site has not been put together backed by lots of corporate money, top notch software development, and managed by knowledgeable people that can come close to competing with Stars.

The mobile app is a great innovation that is a great example of making things better for the players and the site. It gives rec players more opportunity to play at times that would otherwise be inconvenient, and its also more likely that friends or family would observe you playing poker on your phone/tablet which sparks interest, gets people talking about online poker in social gatherings etc.

I've made a suggestion before to improve the app - i haven't tried it as it isn't released in Canada yet, but - add a feature so that players can use the app to facilitate chip and card free home games over wifi or bluetooth. The programming would be simple enough to add in to the existing software and it would have the potential to convert a lot of casual home game players who don't normally play online poker into online poker players since they would then have the Poker Stars app installed on their mobile device.

Affiliates would like it because it would be a lot easier to market offline since you just link them to the download through text msg or email and receive credit for acquiring the new player if and when they deposit.

There is just so much more that could be done that would be good for us players and Stars.
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 04:26 PM
I'd be ok if there were no more reload bonuses to SN+ players (and I'm one of them) as long as they go back to their VIP tourneys that only allow SN+ Players to take part in. No one on here to my knowledge has mentioned the vast reduction of FPP tourneys geared towards high volume players. In previous years nearly every week there was a 10k fpp buy in to a live event with 1 seat added. This year they have switched to x number of seats guaranteed (which seems to always get met).

Another thing I'd like to see added is a summer version of the P.C.A in say August. (Call it summerfest ) The NAPT was a big failure, mainly due to US laws, but having a Series held in the carribean with several events would be a nice way to keep the potential US market thinking of Pokerstars.
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 04:48 PM
Good posts LazyAce, i agree almost 100% to everything you wrote.
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 04:50 PM
You guys make me dream. I can't tell you enough how happy I would be I were to rake 4.5% only.

Let me explain: in my French country the rake is 6.5%, the cap is set at 3€ instead of €2.8, and the rake for the beginners at 0.01/0.02 is 6% on PS.fr but only 3.5% on PS.com.

However, It's obvious to say that the 4.5% rake on PS.com is still ridiculously too high (rakeback excluded). In all fairness, the rake shoud be at about 2% and with a €0.5 cap for every limit.

Anyway, I still got some good results in 2011 at PS.fr, but the late December money grab
made me lose 55% rakeback, which is a disaster, because I never play above 0.25/0.5.

In my country, the player pool is segregated. It means that full ring is dead, and that a
lot of games died due to the fact that the traffic is not big enough everywhere.

Pokerstars.fr was the number one poker site in France from June 2010 to December 2011; however, Pokerstars's players got so furious in early January that they moved to the new French number one poker site, which is winamax. Unfortunately, PS.fr seems to accept its defeat.

Last but not least, the government wanted to tax all the winners having won more than €5,000 a year. It's been refused, but they are going to try again very soon.

Also, the politics haven't got the faintest idea about poker; therefore, the future of poker is not crystal clear.

Yes, French players are the world worst players, there are no further taxes at the moment on winnings, but the situation looks gloomy in the long run.

Damn, I miss 2009 so much, but reality is the best possible cure for dreams.
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 07:03 PM
Quote:
Originally Posted by Jah Onion
Well here's how it works:

- We keep suggesting things
- Stars either ignore it
- Or Stars say "we're looking into it"
+1

See: all the very good suggestions we have made to them in regards to the lobby/HU games over the last 2 yrs. Everything was shot down for one reason or another.

They should listen to the players more.
PokerStars Roundtable 2012-05-14 Quote
05-25-2012 , 09:29 PM
Would really like it if the hand histories or tournament summaries kept track of rebuys in tournaments. Specifically I think these should be in the tournament summaries and set up in a way that HEM and PT can easy access them. As it is now, I look at my graph get happy and then realize and guess how many 100s or 1000s of dollars I've spent in rebuys. I'd guess about 20% of the rebuys/addons wind up in the hand history as it is now which is in no way acceptable.

Yeah it's a stupid request. But some of us actually file taxes.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 12:40 AM
Quote:
Originally Posted by shmoo101
Would really like it if the hand histories or tournament summaries kept track of rebuys in tournaments. Specifically I think these should be in the tournament summaries and set up in a way that HEM and PT can easy access them. As it is now, I look at my graph get happy and then realize and guess how many 100s or 1000s of dollars I've spent in rebuys. I'd guess about 20% of the rebuys/addons wind up in the hand history as it is now which is in no way acceptable.

Yeah it's a stupid request. But some of us actually file taxes.
I've posted about this elsewhere. I don't think it's stupid at all, it's actually quite a lot easier for them to fix it on their end than have every player to have to manually calculate their own rebuys.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 02:22 AM
LazyAce, you need to understand that much backing for these arguments and reasons beyond "gimme gimme gimme" have been discussed in lengthy detail prior to these threads. Going back over these arguments in every single post would be unnecessarily verbose and ultimately serve little purpose. Coincidentally I just had a very similar conversation with somebody else in private so I can at least give a bit more fundamental backing and reasoning to many of the comments made in this thread.

The first is price elasticity. Price elasticity is pretty simple. It reflects the change in consumers with a certain percent change in price. Some goods are perfectly elastic, such that if the price is increased you end up losing money since consumers respond directly to the price. A well known example of this is coca-cola in the US. A product that is completely inelastic is heavily addictive drugs. Your 'customers' need their fix and will pay anything for it.

Stars seems to believe that online poker demand is all but completely price inelastic. They've lost a lot of money since online poker has entered into a period of fairly rapid decline. Their response has been to raise the effective prices paid by their most loyal customers - their regulars. My position has always been that the sites are costing themselves money by doing this. They raise prices, the player population declines more rapidly, they raise prices even more and it repeats. Instead of looking inward they simply blame it on a general decline in the interest of online poker, on a struggling world economy or any reason - any reason besides even starting to consider that poker demand is a more elastic than they are willing to accept. All their reasons sound logical, but there's a problem with them. At casinos poker rooms are more full than ever. Go to the brick and mortar thread on this very site and you'll find plenty of people complaining about poker rooms being filled to capacity and lengthy waiting lists. And the WSOP, even after Black Friday, saw its number of players increase. Interestingly enough even if poker is somewhat less elastic than I believe, that does not preclude the possibility that the sites are shooting themselves in the foot here. http://en.wikipedia.org/wiki/Laffer_curve is a critical read since it directly applies to the current situation.

The problem for online poker sites is that they have no means of determining why people are leaving. An example I constantly use, and I believe I already have in this thread, is the guy playing low stakes PLO. He is actually quite a good player, he crushes his home game. Online the games are tougher but he still manages to earn around 10bb/100 pre-rake. That is a dominating earn rate, he's getting it in good - and holding. And he's outplaying his opponents constantly. Yet due to the fact that Stars rakes low stakes PLO at 20+bb/100, he is a massive loser. He's losing 10bb/100. A buyin every 1000 hands, a bankroll every month. He's not going to stick around long. And when Stars consumer research does finally get in contact with him, trying to figure out why he's stopped playing - what's he going to say? He's going to blame it on rigging, perhaps his opponents cheat, all these wild theories. He'd never imagine or suggest that the reason he lost was those few cents to dollars being taken out of each pot. The sites have done such a great job of hiding the impact of rake that they're now killing themselves since they refuse to accept the possibility that consumers are responding to the high rake, even if the consumers themselves don't realize they are.

And as for the issue of 'Stars lowering their rake 50% decreases their profits by 50%' - well one thing I strongly agree with you on is that the whole economy is nowhere so simple. The suggestion that Stars lowers the rake by x, their profits drop by a directly comparable figure is certainly not accurate. I'll explain why. You can check Party's financials to see some very frank information regarding the current state of the sites. Party, oddly enough, is at a time in their company when they are having more real money sign ups than ever before. The problem they're facing is that these real money players stick around for less time than ever before deciding they don't like online poker. The same trend seems present on Stars as well and it's killing all the sites profits. Casual players not only deposit bringing more money into the economy, but also keep the current games running longer.

The sites have responded to this by trying to extract more money from their regular players while trying to give a little bit back more to casual players - weighted contributed is one example of this. This seems ostensibly reasonably but turns out it's opened up a whole new can of worms. The problem is that these sort of changes ultimately end up massively polarizing the player base. If you're a regular and can beat the high rake, weighted contributed/other anti-regular rakeback schemas (eg - essence) and the generally high level of skill online - you are a rather good player. Mediocre regulars have been pushed out of this game. This creates a massive polarization in the skill levels. You have typically very good players, and very bad players. Very good players know their edge doesn't come against other very good players, especially given the high rake and anti-regular rakeback schemes. This creates a predatory environment where regulars implicitly collude to take down the fish as rapidly as possible. And they're good at it. The fish don't stand a chance in today's games. And this all goes back to the massive skill polarization that the high rake and poor rakeback schemes are creating. It's killing the games from the inside out.

You and I are lucky in one way. We both likely ran at least reasonably well some point early in our poker 'careers' which is why we're where we are today. I'm sure you've had 50k breakeven or worse, and that's when you're a vastly better player than you were when you first began. Imagine you had one of those 50k stretches when you first starting. How long do you think you would have stuck around online poker? Do you see where I'm going with this? Back when we started the games were good. Now they're not. If new players run 'normally' they're going to get destroyed. Even if they run well they're going to get destroyed. The current games make it all but impossible for new players to stick around.

The idea of lowering the rake is not to suddenly have hundreds of thousands of new playersstampeding to get into the games, but to try to help keep the poker economy and playerbase more balanced. This results in an economy where players can stick around longer which is good for everybody, including the site. This is only a generalization of the 'big picture' view. Things again become even more complex when you take into account depositing players and especially money flow, but this response is already getting rather lengthy.

That's scratching the surface of the macro level but even on the micro level things are not so simple. Let's say Stars drops the rake 50%. Players are, as in the big picture, going to stick around way longer than they were before. It's not as if players play the exact same volume and withdraw every penny they saved due to the rake drop. Recreational players play longer, regulars move up (where they pay greater rake in $ terms), etc. Now let's consider to micro impact of incentives. Recently Stars offered a $250 deposit bonus. Many, perhaps most, players did not take advantage of it. Regardless see: http://www.pokerscout.com/SiteDetail...ite=PokerStars

That $250 bonus is basically an extremely capped 27.5% rakeback. A pretty modest reward. Yet you can see on scout that they went from around 24,000 ring game players average to around 28,000 players and now they're back lower than ever. That's a 16.66% increase in site volume in ring games (ie - not SCOOP) based on a bonus that many players presumably did not even take advantage of - as has been mentioned, most players aren't the type that can [or are willing to] deposit $500 on a whim. So while I'm not pushing for the "You'll see tons of new games running tomorrow." aspect of this change, it does -at least to some extent- exist.

Anyhow, I realize this is a novel and I've really only scratch the surface - to get anywhere we'd also need to discuss money flow, trickle up vs rake and numerous other topics. But to what end? This took me quite some time to type out and I expect the vast majority of people skimming this thread will simply go "omg tl;dr" and move on. And Stars themselves are well aware of this position, it's been discussed basically ad infinitum in countless other threads. I hope you see there is more backing to all of this than just "gimme gimme gimme." I just think it's a shame to see the sites killing off online poker all the while looking for every possible reason it's dying besides their own actions.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 03:12 AM
I rather enjoy reading/understanding and having these points of view explained to me.

If Do it Right and Lazy Ace can point me to a good thread where this is being discussed the best, Pls link it for me. Thanks.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 04:07 AM
2011 SNE Thread: Towards the end of this thread a Stars' rep (Pokerstars Steve) announces they are considering swapping to weighted contributed and solicits feedback, which he receives quite a lot of.

http://forumserver.twoplustwo.com/28...d-chat-949372/

Stars 2012 rake and VIP program changes announcement: Stars implements a wide array of changes including raising 5-handed rake by up to 50%, getting rid of incremental rake and instead raking every pot to the max percent - raking to the penny, etc. They claim they expect to slightly lose money after these changes due to some very modest rake/cap changes they also included. Players call BS, very loudly. Much discussion ensues. This is actually what led to the formation of the player meetings. Stars offered to fly out a number of people to prove they were losing money on the changes - lo and behold it turns out they indeed were profiting from the changes.

http://forumserver.twoplustwo.com/28...012-a-1145272/

2012 Mass sitout against changes: A thread organizing a protest to Stars changes. There was much dicsussion of the pros and cons of the changes along with the organization of the protests - which saw previous excessively greedy plays by Stars overturned on PokerStars.fr. Stars, as of 2012, took a new direction against people protesting by sitting out and discussing the changes in chat - they banned them.

http://forumserver.twoplustwo.com/28...anges-1145349/

Stars VIP/Rake Change Negotiations: A discussion thread started by one of the initial player reps on what players want and are looking for from the first set of player meetings.

http://forumserver.twoplustwo.com/28...tions-1147161/

Feburary 2012 Player Reps Results Discussion: After the first player meeting the player reps came back with an interesting take on things. They were exceptionally positive, players were not. Much discussion ensues.

http://forumserver.twoplustwo.com/28...012-a-1159146/


========================================

Those 5 threads, along with the ones they link to, provide plenty of content and backing, although the signal:noise ratio is quite bad. If you have a lot of patience and time though you can see how things slowly evolved to where they are today. It's amazing how Stars image changed from the company everybody loved to just another greedy corporate entity in such a short period of time. The worst part is is that it really doesn't seem "Stars 2.0", so to speak, is substantially more profitable than they were when they were the company that everybody loved. Earlier this year a large number of executives left Stars - including their CEO, Gabriel Campos. I sure do wish I knew what that meant, but it is almost certainly related to everything that's been happening with Stars as of late.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 04:14 AM
DiR for mod, PS CEO and God
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 05:00 AM
So, will a PS Rep everyday come back to this thread or is this another held only amongst players?
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 05:19 AM
What does the pokerstars roundtable look like? Will I ever be able to buy it in the store?

If stars bails out FTP players all will be forgiven.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 05:23 AM
Quote:
Originally Posted by Do it Right
LazyAce, you need to understand that much backing for these arguments and reasons beyond "gimme gimme gimme" have been discussed in lengthy detail prior to these threads......
very good post, thanks.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 06:14 AM
Well reasoned post DiR, the low-stakes PLO one is a particularly thought provoking. When I was reading through, one point (which as you say has been said a lot before) jumped out at me that I think was fundamentally wrong:

Quote:
Originally Posted by Do it Right
And as for the issue of 'Stars lowering their rake 50% decreases their profits by 50%' - well one thing I strongly agree with you on is that the whole economy is nowhere so simple. The suggestion that Stars lowers the rake by x, their profits drop by a directly comparable figure is certainly not accurate. I'll explain why. [reasons why it wouldn't be as bad]
The "baseline" here is lowering rake 50% decreases their revenue 50%. It wouldn't just decrease profit, they would become start making a significant loss, unless you think their profit margins are 50%+.

Lets use as a base-line a profit margin of 10% because i think that is what PartyPoker's financials are. [You can do the same with a higher or lower % if you believe PokerStars have diff margins].

With 10% profit margin, if you reduce your revenue (rake) more than 10% you will make a loss, assuming costs are independent of these rake cuts. Most costs (marketing, customer service, software development, operator licenses etc) will stay the same, although you could argue long-term customer acquisition costs change if you make significant rake changes. One cost that is variable to rake is operator taxation, which i think is only 1-2% on the IOM. (significantly more in new euro regulations, but i assume all this talk is about .COM.)

So, the baseline (which i know you state is overly simplistic) should not be "reduce rake 20% reduce profits 20%" but "reduce rake 20% reduce revenue 20%, while barely changing costs, it would wipe out the entire profit and make it a loss-making business"

Your other points about the "big picture/macro" view all still stand, but i think they stand on the wrong start point. And this is very important because if players are really suggesting to Stars to make 30%+ cuts to rake across the board, then you are trying to argue not just to cut profits a bit but for turn the business in to a loss-maker. No business is obviously going to decide to do that, regardless of the "big picture" view. So any suggestion of rake cuts of double-digits needs to come with suggestions for large cost-reductions.

Last edited by Hood; 05-26-2012 at 06:21 AM.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 07:05 AM
Thank you Do it Right.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 09:08 AM
While I don't for one second think their profit margin is 10% ( i expect way more), all the issues u raise can be tackled by a simple solution.
DON'T reduce rake by x% across the board. Reduce it most where it needs to be reduced, whereas some stakes (200NL+) only need a tiny rake reduction if any.

PLO needs a large reduction.
micro stakes NL needs a decent reduction or reduced prices for cash bonuses
medium-high stakes NL barely needs much in my uninformed opinion.

I can't speak for limit or sngs/mtts, however i can't remember people complaining that MTT rake was too large, so if, for instance, MTT rake was left alone, then even lowering rake for cash games and SNGs by 10% across the board (no-one is suggesting that AFAIK) would not lead to a 10% loss in profits. DUCY?

FWIW my idea of a cost reduction is doing away with the 1MM quarterly SNE tourney and maybe the other ones as well. that's well over 5 million dollars saved per year.

Quote:
And this is very important because if players are really suggesting to Stars to make 30%+ cuts to rake across the board
fwiw i don't think anyone is suggesting that, would be curious to see where u got this assumption from.

Last edited by Jah Onion; 05-26-2012 at 09:15 AM.
PokerStars Roundtable 2012-05-14 Quote
05-26-2012 , 09:15 AM
I believe Do It Right's main driving argument over the last few months is that significant rake reductions need to be made in online poker overall; perhaps focused in certain parts but the end result is that significantly less is raked from the game. That was what I was responding to.
PokerStars Roundtable 2012-05-14 Quote

      
m