My possible solution to Pokerstars “killing the game”. - Page 6 - Poker News

I love how micro analyst take pokerstars in a vacuum while ignoring all macro economic indicators

Most of the world is broke and in the biggest depression of all time

The excuse of bringing more fish is laughable in the current world economic context

The global economy is in trouble in a lot of poker hotspots. Just look at russia, brazil, spain, italy, france and the US

All those countries have HUGE consumer class bying power issues. Those issues will be compounded by soaring inflation and debt/gdp ratio that will force tax hikes on the middle class (those who play poker) therefore reducing disposanle incomes even more.

Poker is not going to expand in those conditions, its going to contract faster. Its ABC econ and no marketing is gonna change that.

Pokerstars sees that and this is why they are milking their existing cows with casinos and sportbets.

The truth is that pokerstars was not bought at its real market value because amaya had too much access to cheap credit by banksters. The risk was undervalued because of that.

Pokerstars was not worth 5BN, the loan is not going to be paid back.

They will run it to the ground and fill their pockets in the process

Stop being so blind.

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12-30-2015 , 02:36 PM

#127

PTLou

JellyBean

Join Date: Nov 2008 Posts: 5,516

Quote:

Originally Posted by leconnaisseur

I love how micro analyst take pokerstars in a vacuum while ignoring all macro economic indicators

Most of the world is broke and in the biggest depression of all time

The excuse of bringing more fish is laughable in the current world economic context

The global economy is in trouble in a lot of poker hotspots. Just look at russia, brazil, spain, italy, france and the US

All those countries have HUGE consumer class bying power issues. Those issues will be compounded by soaring inflation and debt/gdp ratio that will force tax hikes on the middle class (those who play poker) therefore reducing disposanle incomes even more.

Poker is not going to expand in those conditions, its going to contract faster. Its ABC econ and no marketing is gonna change that.

Pokerstars sees that and this is why they are milking their existing cows with casinos and sportbets.

The truth is that pokerstars was not bought at its real market value because amaya had too much access to cheap credit by banksters. The risk was undervalued because of that.

Pokerstars was not worth 5BN, the loan is not going to be paid back.

They will run it to the ground and fill their pockets in the process

Stop being so blind.

Thats a pretty good post, especially the last few points. Insiders will make millions and millions no matter what.

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12-30-2015 , 03:14 PM

#128

PTLou

JellyBean

Join Date: Nov 2008 Posts: 5,516

Quote:

Originally Posted by Blackmagicz

We appreciate the feedback and just want to say a lot of the concerns that have been brought up have been echoed by recreational and regular players alike.

That was the reason for the post.

Wild guess on my part. I'll have to google what a bitcoin is to play on your new Utopian site, amirite?

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12-30-2015 , 05:19 PM

#129

ZeckoRiver

Pooh-Bah

Join Date: Jun 2010 Posts: 5,590

Quote:

Originally Posted by SageDonkey

My possible solution to Pokerstars “killing the game”.

This is a follow up to the thread "Joint strike on the 1st–3rd of December .... (REGISTRATION), other Amaya/Stars protests"

http://forumserver.twoplustwo.com/28.../index100.html

Firstly, the boycott although admirable and an effective way of players expressing their views, I think is unlikely to have a major impact on Amaya's policies because MTT grinders really have to return and play for many of the bigger comps and for the satellites to Pokerstars live comps, and because the market is efficient and with Pokerstars having most of the fish in their player pool, many Pokerstars reg cash grinders will either return and play, and if they do not then others from other sites will play on Pokerstars because this is where most of the games and much of the value is.

The boycott, and any future potential ones I think may have some influence on Amaya's policies, but I doubt they will make wholesale significant changes based on the boycotts.

So are Pokerstars (Amaya) really killing the game?

Probably not, but they are undoubtedly killing some of the edge that the more skilful players have in on line games by reducing rake back and outlawing certain software aids (third party apps)

This is pretty rough on players who have worked, often for years, on honing their skills to achieve a playing edge and whom in many cases have had big and hurtful financial and emotional swings along the way.

While this venerable group of pros have been toiling long and hard in search of the Holy Grail of a significant playing edge they have of course at the same time been very instrumental in the building of the on line game (and the live game) and with it the recruitment of ever larger player numbers.

But now it appears that Pokerstars are saying, thank you very much, but the building phase is now complete, we don't need any more builders, we only want paying tenants.

So to Pokerstars anyone who is not a net depositor (a net medium/long term loser) is not earning them any money, or at least is not paying them enough “tax” for the privilege of playing on their platform against weaker players.

So this I believe is why they are effectively increasing rake and juice and targeting the increases at the group of reg pro players who play at above average stakes.

Pokerstars' calculated gamble is that any trickle down, or even trickle up, game liquidity loss effect of fewer high stakes games running will be more than amply compensated for by a higher percentage than previously of the weaker and/or lower stakes players raking each other to death, as with less pros playing there is less chance of weaker players being stacked/busted by a pro, because weaker players will now more often swap and circulate money around between themselves, whilst of course being routinely raked in the process.

Furthermore, with more gambly style poker games and offerings, like Spin & Gos, Casino Games, Bingo, Sports Betting, Video Slots, betting on two flies running up the wall etc, and any other forms of gaming and betting that Pokerstars either already have or may add at some point, the weaker players can also lose money on those games rather than to a pro poker player who has a big edge over them.

Given all of the above it makes business sense in my opinion to tax players with an edge a bit more, if only to find a tipping point, of just how much “tax” they will pay and/or how liquidity at higher stakes will be affected, and how much, if any, negative liquidity trickle up/down effect this may all have.

Even if high stakes games disappear off the face on the on line poker earth, in rake terms the loss to Pokerstars will be minimal in some ways given that a $1K/$2K game is raked similarly in numeric dollar terms to a $1/$2 game.

If liquidity is damaged in some way or other by increasing rake to pro players then Pokerstars' world wide marketing strategy to recruit new player sign ups will very likely fill any void in lost revenues.

So in my opinion they are not killing the game, but they are very likely killing the opportunity (or the practical mathematical likelihood) of players moving up through the stakes starting with little or no bank roll and becoming professional crushers at the game.

It will still happen with higher rake charges in place, but just far less often.

In the meantime Pokerstars run the PCA, EPT, IPT, LAPT, EUREKA, UKIPT, ESTELLAS, FPS and APPT tours. (I may have missed some out)

So this is hardly killing the game, indeed 98% of “Joe Public” would view this as building the game, and by running affordable on line satellites for these live comps/tours the dream of poker glory and untold financial riches is still very much alive.

So is Pokerstars' proliferation of more gambly versions of poker and the adding of casino style games as offerings on their platform either wrong or immoral?

You could argue that all gambling is immoral (an argument for another day), but the fact is that Pokerstars are offering perfectly legal gaming products and services within the geographical areas that they operate. The laws that allow this, in some geographical areas and for some forms of gaming are questionable in my opinion (again an argument for another day), but this is down to governments, not Pokerstars, and you can't blame, attack or criticise Pokerstars for trying to fully exploit, in a business sense, all potentially profitable business opportunities.

After all they are just doing what they do as a gaming company, like a nurse nurses, a teacher teaches, or a legally licensed arms dealer deals in arms. If something is legal, it is legal.... period.

I think it is worth appreciating that Amaya have borrowed I believe $4 Billion Canadian Dollars in the process of buying Pokerstars, so it is perfectly understandable that for their share holders and to service the huge debt that the company is carrying, that they will seek the quickest and most ruthless and effective route one type strategies to achieve ongoing and accelerated margins, profitability and growth for their company.

There is a common misconception among people generally, who are not well versed in financial markets, that the headline net profitability of a company is the figure and the only figure to look at. This is not true, because you have to measure profits against the market capitalisation of the company and divide one by the other.

So (and excuse me if my figures are a little off), when the accusation of greed etc for making 500M CAD is levelled at Amaya, this figure equates to a return (yield) on investment of about 11% (the market capitalisation of the company being $4.5 Bn CAD), so it is no different conceptually to you buying a property for $200,000, renting it to a tenant and after costs realising a net profit of $22,000 per year. It is all about yield, not the the bottom line numeric profit figure.

Shareholders in Amaya may well also receive dividend payments, but any shareholder also has an ongoing high risk profile to their investment, and likely much more so in the gaming sector, compared to sectors such as retail or utility services etc.

I am by no means an expert on the written/partly written/inferred rolling forwards, details of the SNE program, but it does appear, as a layman, that this is an area where maybe Pokerstars have pushed the boundaries of fairness the wrong side of the line. So perhaps as a bare minimum they should look to rectify this in a correct and fair way.

So I don't believe that Pokerstars are killing the game and they are not doing anything wrong as far as I am aware from either a legal or business operational point of view, aside from perhaps the SNE issue.

They are entering a new business phase. They already have most of the fish in their player pool (no pun intended) and their business plan moving forward is to recruit more and more fish worldwide, and if it is at the expense of killing some higher stakes games and either discouraging or making it far more difficult for players to build from nothing into something great, then from their point of view, so be it.

As Joe Ingram correctly stated on his Podcast with Dani Stern, Pokerstars apparently (from a business perspective at least) do not have a natural empathy with the game of poker, its rich history, its place in culture and society both in the past and in more recent times, nor an empathy or love of the general romance of the game.

Sure poker is gambling, but it is almost unique in the sense that with skill (and often a little a bit of luck to go along with it), one can win at the game, if only temporarily sometimes, but with hard work and dedication and a genuine love of the game you can win long term, not just short term, and it can change your life or certain or many aspects of your life in a positive way. There are potentially many negatives too. (again this is a separate discussion).

This near unique quality of poker, the ability to win and to attain glory, is the core heart beat of why most people want to play. Furthermore people are extremely happy to play, and to lose if necessary, for the shot at glory, or if not glory then the smaller but still satisfying achievements of cashing in a tournament, winning in a cash game, and in general just improving their playing skills, and in many respects also learning more about themselves as a person and about life in general while playing poker, as poker (in particular live poker) can be in parts a microcosm of life itself.

To a certain degree, Pokerstars are killing some of this by taking advantage of their perfectly legal near monopoly of on line poker and their very strong presence in live poker tours and combining this strength to take poker forward in the direction they choose, which appears to be one of moving the on line game into more one of a higher rake and lower edge playing environment.

So if like me, you have a great empathy for the game, the romance of the game, its cultural importance, and importantly also have the desire/need to have a structure or a vehicle that will allow players the dream of moving up the stakes and improving their game, as well as a vehicle that allows those who have already given blood, sweat and tears to get to a position where it is their livelihood, then in my opinion the only way to achieve this is for players to build their own poker platform.

Let Pokerstars do their thing, and the the players can do their own thing.

Pokerstars thriving and a new Poker Only platform built by players also thriving are not mutually exclusive in my opinion.

Pokerstars will continue to do what they are doing, a great playing platform, great software, a huge player pool and some excellent live poker tours, but I do feel that there is a need for a solid competitor in the market, one that is strictly poker only and that is run a on a different basis and with different goals.

There are enough players and potential new players out there that newer players and any/all players can play on both or either platform, and my vision of a rival platform would be one that would be founded on a very high level of poker integrity, in the sense of it being poker only, and it having all of the things that players have been crying out for, such as a players' panel, and greater levels of transparency and communication between the platform owners/operators and the players.

I would also suggest that if such a platform could be built that it could also include a fully integrated backing/staking function whereby when you back or are backed by a player/person for games on that platform that the platform makes the payments direct to the player and to the backer(s).

Additionally, I would have an insurance (indemnity) scheme available for backers when backing players for live comps. This would not be entirely fail safe like the on line backing system (unless pre-contractually agreed with the live poker tournament body to pay out all parties direct), but an algorithm could be used to judge risk and therefore calculate insurance premiums for live comp backers.

Anyway, these are just a few ideas (that may or may not be good ones), and any new platform built by players can have many great features that are perhaps missing from traditional poker playing sites.

Is it really possible to build a new poker platform and what about the costs and time scales etc?

The way I look at it is that there are 3 main ways to achieve a new platform built by and part or largely owned by players.

Option 1

The cheapest option I would think is the white label (poker skin) solution so using software that already exists. The problem is that you could never develop it into what you really wanted and would be bound by all/most of the policies of the umbrella ownership company, as well as be inexorably linked and associated with the non poker activities of other operators using the same skin as you.

Option 2

Take over an existing poker provider lock, stock and barrel and then evolve their platform into what you want.

This is probably the quickest route to market solution but there are difficulties and negatives including:

It may be difficult to convincingly convert a previous brand to your new brand and make this properly stick in people's psyche.

If you were to buy out an existing operator, and to make it poker only, then you would have to jettison its non poker revenue stream products, products that have made up part of the valuation of the company when you bought it out.

Even if this immediate financial loss could be swallowed and accepted, whenever you take over a company you typically pay anything from 3 to 10 times its PE Ratio, a measurement of a company's earnings relative to its share price.

So by buying something that you could build yourself, you are paying a very big premium for future as yet unachieved and uncertain profits, and for factors such as the brand name, good will, the player database and the overall business and operational structure that is already in place.

Given that the brand name would be immediately discarded and much of the business structure would need to be torn down and rebuilt, paying a premium in a takeover would be unwise I feel and unduly expensive.

This leaves Option 3, my favoured option.

Build your own poker playing platform.

Key areas:

A feasibility study. This needs to be done carefully and precisely in advance, as it is not sensible to dive into the unknown with huge amounts of investment.

Building a poker platform is not a simple thing like buying a rental property or opening a dry cleaners on the high street, where 85% of business projections can be made with an 85% degree of certainty on the back of a cigarette packet, in 20 minutes over a coffee.

Running a built from scratch on line poker business will involve numerous in depth and often complex areas, ranging from marketing to financial to software and technical to legal compliance to also building a live poker tour to run in conjunction with the on line site, giving the on line site extra and completely necessary exposure, credibility and glamour.

All of these areas would need to be researched and investigated for viability and properly costed both as start up costs as well as for ongoing money “burn” costs.

Then there has to be an evaluation from all of this information and data as to the total start up costs and ongoing costs and whether the business could be run profitably by year 3 of its existence at the latest.

Without such solid and professionally gathered info and data plus a compelling business plan there is almost zero chance of investment anyway.

Let's assume that a feasibility study was conducted and the findings and conclusions were that building a new poker platform was possible and financially sustainable and ultimately profitable, then how on earth could what would likely be a fairly huge sum of money be raised for the project?

I can think of three main types of investment/investor, two conventional and one less so in its variant forms.

(in no particular order)

1) Venture Capitalists
2) Crowd Funding
3) Poker Players as investors

1 and 2 are self-explanatory (easily researchable if you are not familiar with the terms)

Poker Players could of course invest within 1 and 2, but could also have some alternative options.

For example a Poker Player could receive a combination of equity and rake reductions for their investment.

Or a player could receive exercisable call option equity rather than flat standard equity for their investment. This means the option to buy shares (stock) at a much higher price, than its initial investment price, in the future. The call option equity has no value unless the share price goes up a tremendous amount, but it is a leveraged investment that is cheaper than flat equity but has got potentially very high returns.

I would advocate as part of the poker playing platform that the share price and any call option prices can be actively traded (bought and sold on the platform) which would allow investors to get in or out for a profit or loss at any stage, and importantly it would allow the company itself to buy back equity itself if needed or to sell more equity to raise extra required capital.

It is quite likely that this would not be legally allowable on the web site itself but there are other ways of it being available via third parties who are licensed to do so.

I would also suggest not selling all equity in the company at the outset. Some equity needs to be retained for the prospect of having to raise new funds.

How much would successfully building this project cost?

Well this is the idea of a feasibility study, but you'd have to think we are talking about millions of dollars, probably not 10s of millions but likely a few million and maybe somewhere over 10 million dollars, bearing in mind that with a new business you generally need money for 3 things, the set up costs, the ongoing running costs (enough to keep the business running for 18 months, if not longer), and a contingency fund for the unknown or the unexpected.

A feasibility study itself I would guess would cost a few hundred thousand dollars given the level of professional expertise you'd need to hire to do it properly and the time it would take to conduct.

Should all of the above be possible and happen, then I'd guesstimate that a feasibility study might take 4 to 6 months, then another 9 to 12 months to raise investment and a further 18 months to 2 years to build the whole thing.

This underlines just how far ahead of the game Pokerstars are with their market dominance, however, should the will be there to challenge their market domination then in 3 ½ years from now it could be a reality.

cliffs? huge wall of text

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12-30-2015 , 05:51 PM

#130

PTLou

JellyBean

Join Date: Nov 2008 Posts: 5,516

Quote:

Originally Posted by ZeckoRiver

cliffs? huge wall of text

cliffs: Kid with a Dream.

Bad News. Its a long long shot

Good News: Isai had a similar dream in Toronto one day so its possible. But in today's regulatory and WW economic environment gonna have to dream much harder.

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12-30-2015 , 11:09 PM

#131

lolwasntme

journeyman

Join Date: May 2012 Posts: 259

Quote:

Originally Posted by Blackmagicz

In the interest of discretion to our current offers I don't want to get into the actual numbers but let's just say for argument that we are running in the millions with a 2 year return on investment at 12x . These numbers have been vetted and built out into a 3 year forecast with all assumptions made.

I am not surprised at the response both from public and private messages.

As poker players many have been conditioned for far too long that pokerstars is the only site out there that can fill liquidity/processing/customer service requirements. There have been other sites that have come and gone because of whatever issues/greed they had.

As I stated earlier there are a lot of business minded professionals that see the earning potential a site that can compete with stars can bring to the table and even before the who SNE debacle work was being put in to build a comparable platform that is cheaper and offers more to the players.

I am hoping that the platform gets the green light as a lot of group have been on this forum for many years and have read all the complaints and accolades of various poker sites and want to make poker a game for players not a money making machine for business.

Don't get me wrong, the team does want to make money but they also value the player and see what happens when you treat them well and when you treat them poorly.

And after lunch we're going to start a space program and show NASA a thing or two!

Quote

12-31-2015 , 09:55 AM

#132

PTLou

JellyBean

Join Date: Nov 2008 Posts: 5,516

Quote:

Originally Posted by lolwasntme

And after lunch we're going to start a space program and show NASA a thing or two!

Elon did it. Some thought he was crazy.

http://www.spacex.com/

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12-31-2015 , 07:14 PM

#133

Wunibald

journeyman

Join Date: Mar 2008 Posts: 332

Quote:

Originally Posted by lolwasntme

And after lunch we're going to start a space program and show NASA a thing or two!

Dude... We are talking not exactly "rocket science", but a poker platform. The latter is in any case a rather simple license to print money by the very way it works. The question is just if you try to rip off users or if you don't.

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01-01-2016 , 05:25 PM

#134

dogthefrog

banned

Join Date: Oct 2015 Posts: 176

And after lunch we're going to start a space program and show NASA a thing or two!

Spoiler:

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01-01-2016 , 10:56 PM

#135

lerz

centurion

Join Date: Oct 2015 Posts: 167

Quote:

Originally Posted by PTLou

The current business model for Esports is quite different from Online Poker.

Poker is funded by poker players.

Esports is funded by sponsors and viewers / fans.

But to answer your questions directly, I am not sure. But most I believe are looking at more like NFL than online poker.

Here is a documentary from a year ago. I suppose its gotten bigger since.

Thanks for the info. I noticed a story about e-sports match fixing. That must be a huge problem with alot of side action on these tournaments.

I also found a few websites that allow players to play video games for cash. It looks like they use the same skill game argument that dfs does.

Local e-sports rooms, if legal, $.

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