Rakeback - What is the future?
Posted 04-21-2009 at 02:43 PM by Jeremy
Lately I have been talking to a lot affiliates about rakeback. It's one of those things that undoubtedly is not going to go away in the industry. If anything it is going to increase and players are going to demand it even more as they become more savvy and educated.
As affiliates, we could argue all day long if rakeback is right or wrong, or even how we would like to see poker affiliate programs approach it. Unfortunately however, it is really out of our hands. At some point in the future though, certain larger programs are going to face the reality that the issue of new players getting rakeback, while their loyal high producing players who signed up 5 years ago are stuck is a MAJOR ISSUE.
Right now, if you think these players are not being allowed to sign-up new accounts under a wife, girlfriend, etc. you are living in a fantasy land. Whether rooms admit it or not, they are well aware that it's happening every day. And quite frankly I doubt they give a shit if a traditional revenue share affiliate is losing their MGR, as long as they keep the player.
Anyhow, here is a great article by Bill Rini about rakeback.
http://www.billrini.com/2009/04/20/o...ship-rakeback/
As affiliates, we could argue all day long if rakeback is right or wrong, or even how we would like to see poker affiliate programs approach it. Unfortunately however, it is really out of our hands. At some point in the future though, certain larger programs are going to face the reality that the issue of new players getting rakeback, while their loyal high producing players who signed up 5 years ago are stuck is a MAJOR ISSUE.
Right now, if you think these players are not being allowed to sign-up new accounts under a wife, girlfriend, etc. you are living in a fantasy land. Whether rooms admit it or not, they are well aware that it's happening every day. And quite frankly I doubt they give a shit if a traditional revenue share affiliate is losing their MGR, as long as they keep the player.
Anyhow, here is a great article by Bill Rini about rakeback.
http://www.billrini.com/2009/04/20/o...ship-rakeback/
Total Comments 24
Comments
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Thanks for the link to Bills article, I really enjoyed this line:
The Sklansky math analogy is priceless!Quote:And because there is no simple answer, poker rooms either take a hostile stance, shamelessly offer rakeback to anybody who asks, or try a middle ground that ends up being so convoluted that even David Sklansky can’t work out the math of how their system works. 
Posted 04-21-2009 at 02:54 PM by PokerNations
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Enjoyed Bill's article... very thought provoking indeed. Such a complex issue on many levels.
While I am diversifying to cover this market my opinion is that there are many millions of potential 'average joes' throughout the world who play recreationally who will be happy to play without rakeback* ... just not so many in the US - that very 'average joe' demographic is the one that was virtually killed off by the legislation
(*just like when I used to play, had plently of money from my job, played poker for occasional kicks and thought of rakeback as something those poker-geek types were into!)
How about the fact that many non-rakeback sites are fishier for your average non-US player... why battle the 16-tabling grinders when (Fish + VIP Rewards + occasional reloads) > (rakeback + tougher tables.)
Agree that 'certain programs' have made more of a mess than others with this... anyway, nobody has a clear answer and I am not saying I do either... just throwing some random thoughts into the ring!
Cheers, MarkPosted 04-22-2009 at 08:36 AM by Planet Mark 
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Ya know I wasn't going to comment on this because it seems most people writing about the pros and cons of rakeback don't understand the nuts and bolts of it. (not you J we have ahd this conversation, you are aware of what I mean) But Anyone that takes 5% commission on a player needs their head checked
PAS is not the end all be all of rakeback, and neither is any other large RB company. Make your own deals!
I know for a fact I get bigger commissions at some rooms doing rakeback than many mgr affiliates. I'm not a huge volume affiliate either. So, what if I told you that you could make the same or a bigger %, WITH higher value players offering rakeback? That would make sense right? Of course it would.
Also, I don't spend all day chatting with players, there is easier ways to handle players than sitting on IM all day waiting for an issue to come up..
Anyway, I'm still surprised that so many people have so many mis-conceptions about this topic.. People only seem to see that < 1. I have players that quit playing, so a dirty RB affiliate must have "stolen" them. or 2. 99% of RB affiliates are out to poach players, delete cookies, etc - I think these are excuses for not catering to the demand of the industry.. If affiliate don't look at the reality of the situation they will become out of touch before they realize it.
The bottom line is this - Offer your players the best deals and you won't have to keep beating your head against a wall.Posted 04-23-2009 at 12:05 PM by Ridge
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Randy, you should really come on the radio and discuss this. Some very valid points made here.Posted 04-23-2009 at 12:20 PM by Jeremy
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And you offer them the best deal by keeping less for you, maybe 4-5%.Posted 04-23-2009 at 12:42 PM by tiburon
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Try 5-25% and still give your player the best deal.Originally Posted by tiburon And you offer them the best deal by keeping less for you, maybe 4-5%.
Spot on comments Randy, agree with all of it.Posted 04-23-2009 at 01:35 PM by MJ
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Very hard to do that. There are some sites receiving for themselves only 70-75%, the rest goes to the network.Posted 04-23-2009 at 01:39 PM by tiburon
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That could not be further form the truth..Originally Posted by tiburon Very hard to do that. There are some sites receiving for themselves only 70-75%, the rest goes to the network.
Hey J, I'd be happy to come on and tell "The Truth about rakeback" once and for all.. I'm afraid most of what non-RB affiliates know about rakeback has came form people who are pretty out of touch themselves even tho they do rakeback or have a really non standard rakeback business model..
The flip side of talking about this is that I think if more affiliates truly understood rakeback, then I would have a hell of a lot more competition.. But, then again its kinda like talking SEO with most people, you can tell them everything they need to know, and after wards they still continue in their whacky waysPosted 04-24-2009 at 12:36 AM by Ridge
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Also, you don't want to get me started on the meaningless Rake Races and Rolls, or the Player backends..
I know some of the biggest players online and the normal grinders, I've done the market research and guess what? They could care less about freerolls and most rooms offer some form of direct rake race or VIP system.. Also, almost EVERY site allows players to see their RB stats any time of the day.. The exception is FT, which is an easy fixPosted 04-24-2009 at 12:39 AM by Ridge
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can you suggest some networks?Posted 04-24-2009 at 02:39 AM by tiburon
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At Cake you can check your rakeback stats right in the client.
Poker Strategy Videos - Cake Poker Rakeback Stats
Small affiliates would be wise to be taking note of a lot in this thread.Posted 04-24-2009 at 02:56 AM by MJ
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no, i mean where he gets those dealsPosted 04-24-2009 at 02:57 AM by tiburon
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Randy,
I respect your opinion Randy but I have to disagree with a few of your comments above. I think you vastly undervalue promotions (rake races, freerolls, etc.) and the value and transparency a player backend provides the end user.
I agree that the high stakes players aren't impressed by rake races. But high stake players aren't the top tier players for RB affiliates. The biggest rakers are players who play low-med stakes and grind 8-20 tables. Rake Races are huge for these guys. I would be happy to share my research and experience but it would take up the whole page. Feel free to PM me and we can chat
With freerolls you are appealing to the new player who just found out about rakeback. You are investing in their bankroll in hopes that one day said player becomes a huge raker. How many players deposit $10k on FTP and start grinding 2/4 NL? Not may, they have to start somewhere
Sure, many sites allow players to view their stats. But telling a player he/she has to contact the rooms to view their MGR/rakeback from last month isn't going to go over well with the player.
So then what are you providing the player? A link to sign up? No stats, no promotions and no support. Why should they sign up through you when they can get added value with another affiliate?
If you are targeting a small sample of high rakers then yes, going on your own at some rooms may be the optimal solution for you. However, if you want to compete on a large scale or simply be the top provider in your region/market, simply giving the players X% RB isn't enough these days.Posted 04-24-2009 at 03:21 AM by TonygPAS
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Disclaimer: I have spent a ton of time talking with the PAs folks, probably before Tony's time and I have nothing but respect for their business model, I do however disagree with some of the statements Tony has made here. It's more of a difference in business theory than anything else. Also, we would both suck as business men if we thought our way wasn't the best. AMIRITE?
I challenge you to do just that with everyone, not just me privatly, but if you have hard data and not just a "gut feeling", please PM me or hit me on IM.Quote:I would be happy to share my research and experience but it would take up the whole page
I could site research w/o proof as well, but I'm not going to do that.. Now, are Rake Races and such an added bonus, sure they are. But do they help you convert players any better? I don't think so.
Well we just have to agree to disagree. I'm obv. not as big as PAS, but I have several thousand players. Your model is great and I didn't mean to sound like I thought it was bad.
I have had very little sleep this week, so my posts have been a bit edgy, so I apologize..
BUT - Of course you guys think your business model is best and everyone else's is behind the times, but that simply is not true.
I never said I told players to contact the room's to get stats. every room that I know of, or at least the ones I promote allows players to see their stats and will even email them stats if they want. The exception is FT.Quote:Sure, many sites allow players to view their stats. But telling a player he/she has to contact the rooms to view their MGR/rakeback from last month isn't going to go over well with the player.
I don't think I said I'm JUST providing a link to sign up, no support, etc.. That's pretty silly statement.Quote:So then what are you providing the player? A link to sign up? No stats, no promotions and no support. Why should they sign up through you when they can get added value with another affiliate?
I and several other rakeback affiliates seem to be doing well without using the PAS model, I know you think your brand is the best, but I'm simply saying that there is an alternative.Quote:If you are targeting a small sample of high rakers then yes, going on your own at some rooms may be the optimal solution for you. However, if you want to compete on a large scale or simply be the top provider in your region/market, simply giving the players X% RB isn't enough these days.
If anything I should probably be thinking you Chris, Byron and the rest of the crew because PAS is helping to perpetuate the misconceptions of working in the rakeback market is.
Here is a summary of some of my issues:
1. You say RB affiliates need volume to make money - I think this is because initially your PAS affiliates start out at 5% or so, obv. this can be adjusted, but it keeps affiliates away. Other than FT any affiliate can start out with a higher % going direct.
2. Poker Players Signup because of rake races - Again, this is a nice added bonus, but I have seen the freerolls and rake races, the players usually don't show for the freerolls, and the rake races are very top heavy rewarding the extreme ballers and leaving many of the grinder with no shot of winning.
3. Backend Stats - Players do like to know how much RB they are getting - Most serious RB players have Hold'em manager or Poker Tracker that tells them this w/ the click of a button. Furthermore, all sites allow players to see stats with the exception of FT and I guess Bodog..
4. Having their RB pages in a sub-domain with thousands of other sites. This just cannot be good, also, I think it costs affiliate sign-ups, unless you are giving them all their own bonus codes.
5. The backend all looks the same - Which is just sorta weird, but again you guy shave done some cool stuff with your software, so props to you. I think people should have an original looking site, anyone can spot a PAS site.
Anyway, I would love to see some stats that I'm wrong. I know that RB can be done another way than this, and in the end I think you and I agree more than it appears we do.
Overall, you have made a great case for Rakeback in general, which is cool. Especially your comments on signing up at one site vs the other because of "added value" which is the nuts and bolts of Rakeback.Posted 04-24-2009 at 10:54 AM by Ridge
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Randy>
You know much more about rakeback than I do, however, I don't think you are entirely fair in some of your descriptions of the issues.
Every room that I know of, or at least the ones I promote allows players to see their stats and will even email them stats if they want.
I would really like to see some examples of this (seriously, I have only seen this at WSEX, and I play quite a lot).
2. Poker Players Signup because of rake races
There are a lot of ballers and people dreaming of becoming one, and since rakeback rates are usually locked, rake races are one of the only easily to compare between sites.
3. Most serious RB players have Hold'em manager or Poker Tracker that tells them this w/ the click of a button.
Pokertracker and Holdem Managers rake stats aren't always accurate, both because sites calculate rake in different ways, but also because of bonuses and fees.Posted 04-24-2009 at 12:28 PM by Unknown Webmaster
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Unknown, I posted a link with exactly how to check Cake Poker rakeback stats in a post above, click the video link. I'll post it again:
Poker Strategy Videos - Cake Poker Rakeback Stats
UB/AP are the only two rooms that don't do an autopay also.
One place where I've seen a "tiny" benefit from a backend is in referrals, but it's been very minor as has the rest of my action stuck on a backend.Posted 04-24-2009 at 12:44 PM by MJ
Updated 04-24-2009 at 01:02 PM by MJ -
Randy,
Regarding rake races, we saw a 50% increase in sign ups after launching Races and Rolls. Obviously you will have to take my word because I can't exactly post our stats I think it would be cool to get a conversation going in the RB Forum about promotions.
The notion that we give all of our partners 5% at every room just isn't true. We have partners who receive -2% of what we get.
This is pretty much a difference in opinion and business model Randy. You are absolutely right in saying their is an alternative to PAS. Whether that alternative is the right business move for a new or established affiliate really depends on the individual.
TonyPosted 04-24-2009 at 02:58 PM by TonygPAS
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Randy said:
Tony SaidQuote:1. You say RB affiliates need volume to make money - I think this is because initially your PAS affiliates start out at 5% or so, obv. this can be adjusted, but it keeps affiliates away. Other than FT any affiliate can start out with a higher % going direct.
Tony, seriously read my posts and quite taking my comments out of context.. That again is not what I said..Quote:The notion that we give all of our partners 5% at every room just isn't true. We have partners who receive -2% of what we get.
Good to debate with you though Let's get a good rakeback discussion going in the rakeback section and see what we can sort out. There are so many myths and assumptions happening right now, this needs to be settled once and for all..
Obviously I think that if affiliates are given the truth about rakeback, they we ALL will have our hands full with competition..Posted 04-24-2009 at 03:27 PM by Ridge
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I agree with Randy here and would love to participate in a real discussion in the forums myself, if Rakeback becomes more publicly understood more and more affiliates will start offering there players the best deal available.
I don't buy the freerolls value myself, the actual value in one of these free tournaments is equal to a $10 mtt buyin for the player, but I'm only speculating opinion.Posted 04-24-2009 at 04:59 PM by MJ
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We need to organize a radio show where we can have a roundtable discussion / debate on rakeback with you guys.Posted 04-24-2009 at 05:53 PM by Jeremy
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