Quote:
Originally Posted by Blunderbuss
"Winning Players" and "Fish" are not static designations, they are dynamic. Lets assume a site's current breakdown of players is
20% Big Winners
20% Small Winners
20% Break Even
20% Small Losers
20% Big Losers
The site decides they shall protect their player base. They kick the top 20% off the network.
They haven't removed "Big Winners " from their games at all. They just turned the "Small Winners" into "Big Winners" since now they can just beat up the worst guys without getting taxed by the better regs. I could detail how this process would continue, but it should be obvious.
If they keep kicking the biggest winners they will eventually kick their entire player pool, when the best of the original "Big Losers" are "Big Winners."
Treating your winning regulars badly only decreases your volume and decreases your rake.
(This conclusion is true for poker. If you want to allow your players to play poker, but kick everyone who doesn't lose it all in the casino and sportsbook, that's a different business.)
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It is not obvious to me
If you narrow the skill level i.e. remove the 'Big Winners', it takes longer for the Losers to blow their bankroll, as the skill gap between other players is narrower.
Sure the site loses short term rake, as there are less tables running, but in the long term they will earn more rake.
The only two main situations where a Big Winner is useful for a poker site is
1) where they generate action where it otherwise wouldn't e.g. a Big Loser only wants to play $5000nl HU and there are no other $5000nl HU players logged
2) they make it more fun for the Big Loser, meaning he stays at the site and keeps depositing, relative to the Big Loser/Small Loser/BE/Small Winner who would otherwise have filled that missing seat.
There are other ones too, such as if they recruit new players e.g. they have a blog they show to their friends, or in the extreme case, they are the likes of Tom Dwan or other big pros, who clear are very good for the poker sites. But if you have a $100nl big winner who does neither 1), 2) or anything else, then they aren't desirable for the poker site in the long term.
To relate this to the OP, as poker sites are realising this, so they are giving us less commission for attracting such players (currently by changing the rake method to Essence and such, but we may in the future see the end of rev share deals in favour or CPAs)
Where It All Went Wrong
Disclaimer: I'm sure there is some better posts/discussion about what I've written below. However, I find this all very interesting and it's great to have an open discussion about this, and hopefully by the end of it we can all work out what the best solution is, as it's in all of our interests
Total Long Term Rake is the result of an equation, being:
the net amount deposited multiplied x the sites ability to convert this into rake, rather than into winning players profits.
However....................Daily Rake is pretty much:
The number of tables running that day
This is where it has all gone wrong.
Pretty much all poker sites managers' bonuses have been tied to short term rake. Likewise, networks have only cared about seeing their rake trend going up.
So all poker sites and networks has been focused on making software that is easy (supposedly) to mass multi table, everyone has been running big races.
Likewise each affiliate only care about daily rake, and to have a lot of daily rake, you need players who play every day and ideally forever i.e. the best winning players.
So we've had poker sites/networks building software that is great for winning players to grind, whilst running promotions targeting winning players, and we've had poker affiliates setting up websites to help winning players win more.
And this is where we have ended out now, much tougher games and the poker market shrinking. Bad for everyone.
How Poker Sites Are Trying To Fix This
Many poker sites/networks realised the above some time ago, so we're seeing part i) of the equation, net depositors, now being targeted poker sites. The problem is that to undo years of neglect of the software takes time. We're gradually seeing more enjoyable games like Zoom and Speed Poker, but that doesn't alter some horrific eyesores in the table lobby, like having to scroll through hundreds of tables, or trying to decode what some of the MTT symbols mean.
Trying to navigate a poker lobby is far too hard still, and this is a big issue they need to fix.
Part ii) of the equation, converting losses into rake, rather than winnings is being done by
a) Promote a type of poker that narrows the skill level i.e. games take longer
b) Directly educate the losing players
c) Directly reward winning players less
We've seen a) via the likes of Rush/Zoom/Speed Poker. Whilst this clearly helps makes the game much more enjoyable, it does narrow the skill level. It's effectively a double win for the poker site - it attract losers, entertains them/keeps them playing, whilst also narrowing the skill level.
We've seen b) via the tools now available to players, many sites now offer an extensive poker school with videos, articles on slowplaying, even calculators they can use whilst playing. (though i mentioned in my post above, these are usually badly promoted/they need to work a lot harder on attracting donks in the first place)
And now we've been seeing c) too, via changing the rake system, so that Winning players receive less.
What Are You On About
So my conclusion for affiliates is......
Poker sites and networks have been finally trying to correct the horrible error they made of trying to boost daily rake, rather than focus on long term rake maximisation (which would have led to much fish-friendly software, promotions etc).
To correct this, they are trying to improve the two parts of the long term rake equation:
1) increase net depositors - a major part of this is by making software more fish friendly
2) by improving the deposit to rake, rather than winnings, ratio - one way side effect of this is by trying to reward winning players less so they withdraw less. To do this, they have been changing the way rake is apportioned, which in turn means affiliates who target winning players are receiving less.
However, the major problem facing poker affiliates is that we are already feeling the impact of 2), and it will only get worse, whilst the poker sites are making very slow progress on 1)
This means we are faced with either trying to keep recruiting more and more winning players, who are making per player less and less commission, and this is also very difficult given the decline in winning player numbers too.
So to do this you need to invest a ton of money to be significantly better than your competing affiliates, or find niche areas. It'll take a ton of money to be significantly better than major affiliates, like the 2p2 advertisers, and given it's a declining industry, your money would likely be invested better elsewhere.
If you can find a niche area of winning players it's great and it will always make poker affiliate some money, but maybe not the eye watering amounts
Or try to promote to recreational players, which is difficult given how unattractive most poker software is (outside of pokerstars, which pay affiliates far less than other networks).
So relating this back to the OP, I think the profitability of being a poker affiliate is going to continue to struggle, so long as the sites continue to lower commissions on winning players (we've only just started to see this happening), whilst failing to provide attractive sign up promotions and software that will make the product significantly attractive for recreational players to be willing to lose/spend money on.
john
Two Plus Two
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