OK - so currently there are two pretty interesting and active threads going on in the zoo right now. One is of course how Everleaf basically screwed over all it's US players. The second is about one (or possibly more) Merge skins giving MTT tickets to 'prop players' and whether this (a) violates the network and or skin TOS (b) is a conflict of interest (c) whether these 'prop players' softplay each other, or worse collude, or even worse share accounts (d) whether someone within the skin or network is receiving a kickback of the cashes these 'prop players' score with their free tickets.

All this got me thinking, I'm not 100% sure how a poker network shares profits with the skins, how the skins generate revenue, etc. Obviously, this depends on which network, who is licensing them, which skin, etc. But hopefully some knowledgeable 2+2ers can enlighten me and the rest of the community.

The easy answer is rake (or tourney fees). This is, and should be, the only revenue generated by a network/skins. Unless of course you're FTP, AP/UB, Pitbull, etc and just help yourself to player funds. But ideally, all network/skin revenue should be rake. On a site like PS where they have proprietary software, the business model is simple to understand. PS collects rake and fees as revenue. Expenses are standard corporate expenses: R&D, payroll, advertising/marketing, overhead for B&M offices, servers. I believe they also have to pay their processors to handle deposits and withdraws.

But what about a network with multiple skins? Let's take Everleaf for example. Minted Neil has explained that Minted does not handle any play funds directly. Everleaf does, and is audited monthly (or so we are led to believe) by LGA. Minted has to pay Everleaf to process funds being deposited and withdrawn. But Minted generates its revenue through rake right? How does Everleaf determine how much Minted gets, versus Luvin or any other Everleaf skin? Is it based directly on the rake generated by the Minted players and only the Minted players? Does Minted collect the rake generated by its players, and Luvin collects the rake generated by its players, etc? Is it exactly proportional, or is the revenue sharing more indirect?

What about on Merge? Same thing? And does the network take a flat % cut of all rake generated? Or in the contract that a skin signs with a network to be a partner is there a flat fee? I know when you are a franchise with a national corporation (take Subway for example), you pay monthly royalities but you do not pay a % on how much money you earn selling sandwiches. Just a flat royalty %. Are the poker networks set up like this, or is it solely % based?

Any insight by an informed person would be appreciated.

And why do I (and others) care, or should care? Understanding how these sites are set up, and their business models gives important insight to players about which sites they should trust, and which sites they should not. Right now I (and many other US players) obviously regret playing on Minted. There were warning signs that things were a little amiss there for the past 1-2 months starting with Everleaf's 'winnings cap' decision that should have been a red flag that their business model being a US facing network was unstable at best.

Thanks for reading.

Um, I think this is more than a little premature.

My understanding of the system is the skins generate rake and have to give merge a certain % at some frequency in order to play on merge's network/platform.

OK screwed maybe too harsh, because we have yet to see whether players get their funds in a timely fashion or not.

But by (1) Suddenly pulling out of the US market with little or no warning (2) not being clear on when players can get their funds (3) locking them out of their accounts (4) offering various reload bonuses minutes up til the back-out (5) not giving any information on rakeback, affiliate promotion status (6) converting USD accounts to Euro where players lose $ due to conversion rates (7) not providing any shred of proof that what they are telling us about a cease and desist letter from Homeland Security is legitimate ...certainly isn't good business practice, certainly inconveniences players, certainly is poor customer service. It's basically a giant middle finger to all the US players that have supported this smaller network for the past year. So excuse the semantics of 'screwed' I will fix my post to 'how Everleaf hugely inconvenienced players'

Also the merge skins giving away mtt tickets thing to props, really appears to currently have little substance.

Nope. The only % they have to cover is the shared overlays for tourneys but not a % of the generated rake.

What about "How Everleaf once again made a move out of position"?

Haven't really read this thread. Wrote this in the discussion about the merge ticket accounts and was encouraged to x- post it here for whatever it adds. Also this is first copy/ paste/ link /xpost I've done from an iPad so there's that.

http://http://forumserver.twoplustwo...&postcount=554

For clarity, you are asserting that skins pay Merge a fixed rate and not a fixed % of rake? If so, how strongly do you know this (based on your source)?

Merge skins generally get 75% of rake generated and 25% is kept by merge as a fee, although some of the bigger, more liquid skins pay less. They also pay a one time fee as well when first starting out

When you say "rake generated" this is only by the players who are on that specific skin right?

So player A on carbon and player B on Lock. What you're saying is that 75% of player A's rake paid goes to carbon and 25% goes to Merge, and same with Lock and player B right?

Is this also true for all tournament buy ins?

Yup

fairly certain this is how it works.

skins also have to pay rb, pay the affliate,pay bonus, pay rake race, pay guarantees and only then do they collect profit.

this is why lock is so shady; how do they manage sick rb deals, fat bonuses AND they have the ability to have extravagant parties for their sponsored pros? not to mention all the other perks the pros get...

bcp ftw