One idea to regulate rakeback on networks

[OPC]

Originally Posted by TrickyPlay

There are some good points in here. The OPs idea isn't bad and might (!) solve some problems that currently occur. Ipoker, Ongame and many others have huge problems with rakeback and skins that are too aggressive regarding rakeback. I know a lot of skins that were close to getting banned because of rakeback violation. And it's not only that: they take a lot of money out of the network and don't compensate their high volume players properly. So the OPs idea might be a solution but I think it's impossible to assemble. Tower Adrian is absolutely right! Fact is that only players can enjoy this situation and it can't be a long term state. I already tried to discuss it in this thread.

Under my assumption though, all skins and networks would "allow" rakeback to be offered, with the market and marketplace setting its price. If a site goes belly up because they're offering a cut-throat deal, so be it...

[Ridge]

Quote:

Hey guys, just want to throw my 2 cents in here. with RB the only people that win are the players. Operators make a very small % after all the commissions are paid, and those high commissions are being passed directly from the affiliate back to the players. As competitive as the affiliate market is, unless you are a huge RB affiliate I am talking hundreds of players you are making next to nothing. Always trying to keep your players from jumping ship to go to the next guy offering 2% more. This is not something that can't continue long, as it stands. For the RB industry to really succeed IMO, affiliates and operators need to come together and set guidelines across the board on how to properly regulate RB. Obviously this isn't a easy thing to do, and may never be done... time will tell We all want to give the most to our players to keep them happy and playing, but the bottom line is affiliates got into this business to make money, and IMO RB is the easy way out to compete for players and by far not the most profitable for affiliates with just a handful of players. You are right Randy "Things always have a way of correcting themselves.." but wouldn't you want it to correct itself and make more money?

Ah crap, I'm wishing I didn't open this thread. I don't know what I have to say to make people understand the whole rakeback thing. Let me explain this again.

I am a pretty small affiliate, yet I made nice coin promoting mostly rakeback, not all but most.

Saying that unless you are a huge RB affiliate with tons of players you will make nothing is totally FALSE. The player value for rakeback players is much much higher than your average noob bonus hunter even if they move up over the years and play bigger. Rakeback players have already done the bonus thing and are now grinders with an hourly rate to maintain. They also usually play on multiple sites.

Most rakeback players will not risk signing up with an unknown affiliate offering 1-2% more, they are just smarter than that. Players not getting rakeback will however jump to a rakeback affiliate. They activly start searching for a rakeback deal once they figure it out.

Rakeback is here to stay in one form or the other. Lowering the rake is not an answer either. Marketing is based around making someone feel like they are getting a better deal than someone else. So if you remove rakeback, why should anyone signup with a poker room that isn't stars, fulltilt, party, etc. Cake would have died years ago if not for their rakeback program. RB is here to stay.

Also, there is no reason why any sensible affiliate would take a 5% offer to promote anything. If you are making 5% promoting a room, find some place else to send players. Full Tilt is an exception because even at the 5-9% margin the player value is through the roof compared to cake, merge rooms, etc. FT is the only exception I make. all other room are between 15%-30% - usually on the higher side of that.

Also, lots of good rooms will waive bonus fees when you are a RB affiliate since you are already giving up some %. so, think if you never had bonuses deducted from your MGR? Good stuff huh? Combine that with excellent player retention, higher value players, etc. you will wonder how anyone makes money not doing rakeback

[OPC]

Originally Posted by Randy

Ah crap, I'm wishing I didn't open this thread. I don't know what I have to say to make people understand the whole rakeback thing. Let me explain this again. I am a pretty small affiliate, yet I made nice coin promoting mostly rakeback, not all but most. Saying that unless you are a huge RB affiliate with tons of players you will make nothing is totally FALSE. The player value for rakeback players is much much higher than your average noob bonus hunter even if they move up over the years and play bigger. Rakeback players have already done the bonus thing and are now grinders with an hourly rate to maintain. They also usually play on multiple sites. Most rakeback players will not risk signing up with an unknown affiliate offering 1-2% more, they are just smarter than that. Players not getting rakeback will however jump to a rakeback affiliate. They activly start searching for a rakeback deal once they figure it out. Rakeback is here to stay in one form or the other. Lowering the rake is not an answer either. Marketing is based around making someone feel like they are getting a better deal than someone else. So if you remove rakeback, why should anyone signup with a poker room that isn't stars, fulltilt, party, etc. Cake would have died years ago if not for their rakeback program. RB is here to stay. Also, there is no reason why any sensible affiliate would take a 5% offer to promote anything. If you are making 5% promoting a room, find some place else to send players. Full Tilt is an exception because even at the 5-9% margin the player value is through the roof compared to cake, merge rooms, etc. FT is the only exception I make. all other room are between 15%-30% - usually on the higher side of that. Also, lots of good rooms will waive bonus fees when you are a RB affiliate since you are already giving up some %. so, think if you never had bonuses deducted from your MGR? Good stuff huh? Combine that with excellent player retention, higher value players, etc. you will wonder how anyone makes money not doing rakeback

Well played, sir!

[MJ]

Randy really has it nailed, I have nothing else to add but just putting that out there.

[TrickyPlay]

Well, I think that Randy is correct from the players and affiliates perspective. But I think that nobody views this situation from operators perspective. There are indeed some tendencies Adrian was talking about and they need to be resolved. One great example is rakeback at ipoker.
Yes, that doesn't exist because iPoker does not allow rakeback. Meh, it does exist at least under the table. And that is the problem OP was talking about.

Just an example: iPoker is very popular for German players and a lot of grinders play there. A few months ago a pretty new and unknown skin started to offer flat rakeback (of course not totally legal). Then a few others followed and offered more rakeback. Right now they are all offering pretty much the maximum. Indeed, affiliates make money and even if they get "only" 10 % they make a lot of it because of the great player value. But that's not the point.
The point is that operators don't make money with those deals. It's just for volume purposes. As I already mentioned in the other thread about this topic: there's an affiliate that makes a lot of money even with small margins. Just because he knows some high rollers and rooms that are ready to offer such high rakeback deals that they make no money with it.
But this is all behind the stage - not comparable to standard rakeback affiliates like most of us.

If you doubt that: just google a bit and find some ipoker or ongame skins that had problems with their network. Obviously there's stuff going on that only a few people know about so you won't find it online.

In my opinion we talk about two cases right now: the official case in front of the stage and the semi-legal behind the stage.

Another point is that it seems that some people here made different experiences. Randy says that people won't risk anything to receive 1 or 2 % more rakeback. Indeed some won't but some do! I know some players that moved a couple of thousand dollars to other skins because they got a better deal there (also just a few %). So you can't generalize that easily.

Again I can't disagree with Randy. But I think that there is more than one point of view and not everybody is working in the shady rakeback business having problems OP wanted to resolve. And I like the idea behind it. The problem is that networks focus too much on revenue in general without looking at the money skins take out of the network or contribute. THAT causes problems and major networks try to avoid it. Just think about why NoIQ left iPoker. Bad software changes? Unhappy costumers? Tracking issues?

I don't want to discuss about rakeback in general because that's not the point and I can't disagree so far.

[gavacho]

I don't believe in auto-regulation. I think we have a very good example on a macro-economic dimension with our current crisis that it's way too risky. Auto-regulation could work in a perfect world where we would have all affiliates and operators making money, but yes some of us are starving and some skins are fighting to reach a critical mass or to generate volume and these are ready to break the balance of it all.

I have nothing against RB, RB is certainly here to stay, but at which cost? I would not want to see this whole industry turn crazy and get rid of its margins, putting at risk the solidity of the product, the quality of customer service, the security of transactions, and everything that in the end is important for players who are not running after rakeback; and i can say with confidence that it is the majority of players. Don't forget there are many people out there who do not know yet they could be tempted to play poker and that the market of beginner players is huge!!! These players need to be re-assured in a quality environment.

I hope that some network can at least find solutions to retribute their skins differently than solely on the rake generated. That would be a first important step. As for the starving affiliates among us, maybe auto-regulation would work, but after providing numerous bad experiences to the players. Do not forget the players make us live all. Operators have some responsability in regulating this, but surely affiliates who understand that we should treat players with the highest attention could also cooperate. I would invite everybody to use their own conscience on how they would cooperate with operators though...

[Lutz]

I completely agree with anyone who says: "Rakeback must be strictly regulated".

In fact, this does not only count for rakeback, but also for all other sorts of VIP programmes / monetary incentives and it does not count only for affiliates, but also for skins on a network.

The problem is that there are many affiliates and skins around that do not have any business model outside poaching players. They don't even do SEO and for sure do not spend a single cent on real marketing - all they do is approach the big communities like 2+2 and live from word-of-mouth: "Hey, this affiliate / skin XYZ is giving the best rakeback on iPoker / Ongame / ...".

The business models of such sites are highly parasitic and in the long run harm all other participants of the business: the operators, hard-working affiliates and the players.

Some of the big 'rakeback, but nothing else' sites even put a short guide how to delete cookies and uninstall software on their download guides. Why? I guess because their goal is to even poach players say from FTP to FTP - essentially stealing other affiliates' or the operator's money.

Network policies have to make sure that both skins & affiliates have the best incentives to bring genuinely new players into the industry - because at the end of the day, the recreational player's money is what we all live of.

I have nothing against e.g. SEO sites who make a nice living by luring bonus traffic and just channel them to the different standard deals. Those sites most of the time improve the industry value by at least offering customers a choice & improving overall conversion rate from search engine traffic to deposit.

So I'm not saying an affiliate must do big marketing or offer unique services to be a "healthy" affilaite - but he should have something besides trying to offer the 1% more than his neighbour to get his share of the 5% high-volume players that contribute 60% of industry rake.


A good policy model should indeed, as OP said, include the money in / money out. Because in the end of the day, the parasitic affiliates just have those winning/break even players who would never deposit their own money.

[Lutz]

Fitting coincidence:
William Hill Online COO Marcus issues rakeback rallying call - eGaming Review

Couldn't agree more!

[leporello]

He obviously forgot about the 60% rakeback that William Hill were offering to players when they switched networks.

[Lutz]

Well - maybe he finally learned?

A year ago or so, nearly no one accepted the idea of this logic concept [affiliates/rakeback being harmful if not regulated] - now, to the luck of us all, some industry leaders seem to have learned