Quote:
Originally Posted by pkr_brat
if a skin makes 62.5% of the rake how is it they can give us 60% of it? surly they make more than 2.5%
The common sense answer is that part of your 60% rakeback comes from MPP's share of the pie. Consider an example:
Suppose I could attract $X/month of rake business by offering 50% rakeback. My cut of that business is 12.5% and I make 12.5% of $X/month minus operating expenses. MPP's share of this business is 20% of $X/month.
OR
I could offer 60% rakeback and (say) triple my business. This would cost me a lot of money because I only get 2.5% of $3X/month. But MPP would be gleeful because their profit triples to 20% of $3X/month.
You see where this is going? MPP is being too greedy in this example by insisting on 20% of $3X/month because the rakeback skin has no reason to cooperate. Both the rakeback operator and MPP benefit from the extra business brought in by increasing the rakeback to 60% and both should pay for it. In this example if MPP reduces its cut to 15% then the rakeback skin would make 7.5% and everyone is making a lot more money then they would have if MPP had stubbornly insisted on 20% and rakeback stayed at 50%.
These numbers are completely made up but the point is clear. It is very likely that MPP gave the big rakeback skins a better deal with the understanding that the extra money was to be used to pay competitive rakeback that would attract lots of additional customers to MPP's business.