RakeBack, and some negative connotations...

[PokerDude]

I am new to this forum, and see a lot of discussion regarding Poker rakebacks for affiliates. In my eyes, I see rakeback as a major nasty for our industry. Here are a couple of reasons why, IMO:

1) Once players get wind of rakeback deals, they will always be on the hunt for better deals. This means that player loyalty will certainly be minimized, and the fact that affiliates will wind up competing amongst themselves to out-do other affiliates, in terms of RB %'s. This will result in escalating RB %'s industry-wide, which in turn, will result in diminished profits for affiliates;

2) What happens when a player (who I bring in to a site under a normal bonus deal) questions the site directly about RB deals. You would think that the site may very well want to offer a RB to this player (on his demand), rather than lose him/her entirely. This may result in the Poker Site unscrupulously creating a separate, new account for this player, in order to retain him, and provide him with a RB %. This effectively will cut the affiliate out-of-the-loop entirely, from a REV share standpoint. Sure, it violates terms of the original contract, but how can you prove this as an affiliate ?

So, now that I brought up this controversial subject, what do you all think about my arguments above ? Do they have merit ? Are RB's a long-term disaster for our indsutry ?

[pokerextras]

The problems you have raised are the reason that the sites have rakeback caps. It's affiliates illegally breaking these caps which are causing the problems, not the rakeback itself, although as a rakeback affiliate, i definately agree that we'd all be better off without rakeback altogether. The original rakeback providers were offering customers something that they weren't being offered elsewhere. Now, with the advent of affiliate networks who allow every affiliate to offer the same rakeback and races etc, there really is no point in offering it at all, seen as it's not a unique selling point anymore. We'd all earn alot more if it was abolished altogether, and it'd force poker sites to offer better software and support etc to entice customers, rather than simply offering affiliates a higher percentage.

[Chalkie]

Rakeback aint going away and in the main the illegal deals are instigated by the rooms anyway.

[PSORG]

1. Strictly enforced rakeback caps prevent this. The key being.... strictly enforced.

2. I would rather have the player email the poker room and the poker room give them rakeback, thus cutting into my revenue from that player a bit, versus saying "no can do" and the player either creating an account for his dog or just moving to a new poker room altogether....

Would be nice if there was a "rakeback switch" that could be flipped on when a player finds out about rakeback and requests it. It would be deducted just like bonuses, and the affiliate still earns his revenue share.

Example: affiliate is earning 30% revenue share. Player is generating $1000 a month gross rake. Affiliate is earning $300/month from him. Yaya!

Player finds out about rakeback, requests it and gets 30% rakeback. Now your player revenue is ($1000 - $300 rakeback awarded) * your .30 affiliate percentage = $210 earnings for you.

Yes, a drop, but much better than the player just quitting playing that account to open a rakeback account through someone else.

The poker room takes the biggest hit in that example, since they go from earning 70% of the player's rake to earning 49%. They're still earning a good chunk though, and they could always turn off other promos such as reload bonuses or fewer VIP perks in exchange for flipping that 30% rakeback switch on.

A combination of the poker room handling the rakeback themselves, and actively banning affiliates or skins who find loopholes or break the rules, and I think the rakeback bronco could be tamed...

[Knuder12]

rakeback can be a good thing... embrace it

[Ridge]

I am new to this forum, and see a lot of discussion regarding Poker rakebacks for affiliates. In my eyes, I see rakeback as a major nasty for our industry. Here are a couple of reasons why, IMO:

1) Once players get wind of rakeback deals, they will always be on the hunt for better deals. This means that player loyalty will certainly be minimized, and the fact that affiliates will wind up competing amongst themselves to out-do other affiliates, in terms of RB %'s. This will result in escalating RB %'s industry-wide, which in turn, will result in diminished profits for affiliates;

This is actually the opposite, Rakeback players are very loyal and this allows you to develop a relationship withe them. They will shoot you an email, IM, etc saying "hey I want to signup here". Just liek every other business, if you take care of your customers they will be loyal.

As for ever escalating %'s and such, as a RB affiliate I offer what is standard and it has always been enough. RB and Regular affiliates will always have shady people trying stuff, this is not just a RB issue. Same comparision can be mnade for the PSO's and other free bankroll type sites. Its a chocie to engage in these activities[/B]

2) What happens when a player (who I bring in to a site under a normal bonus deal) questions the site directly about RB deals. You would think that the site may very well want to offer a RB to this player (on his demand), rather than lose him/her entirely. This may result in the Poker Site unscrupulously creating a separate, new account for this player, in order to retain him, and provide him with a RB %. This effectively will cut the affiliate out-of-the-loop entirely, from a REV share standpoint. Sure, it violates terms of the original contract, but how can you prove this as an affiliate ?

Let's think about this in terms of business, if you are offering a widget for one price, and I offer it for a better price, then what should the customer do? The REAL issue is that RB affiliates offer a better deal. Until non Rakeback affiliate's come to grips with the fact that they are not offering the player the best deal, then they will always lag behind. Offer your customer the best deal, and you will be good.

So, now that I brought up this controversial subject, what do you all think about my arguments above ? Do they have merit ? Are RB's a long-term disaster for our industry ?

I would suggest that all affiliates work on adjusting to what the market demands. Rakeback just like other promo models has flaws, but the customer/players are demanding it and it is here to stay.

Running a good business means you learn to adapt to a changing market, gaming is an ever changing market and you need to adjust. I would suggest everyone adjusts while Rakeback is pretty easy to get into, it will not always be that way.

[pokerextras]

[/B]

I would suggest everyone adjusts while Rakeback is pretty easy to get into, it will not always be that way.

Why do you say that Randy? It seems that with the range of rakeback solutions available nowadays, anybody can become a rakeback affiliate and be competitive almost immediately. Why would this change?

[Ridge]

What I mean is in terms of ranking for and marketing rakeback. I think soon affiliates will have to choose a white label like RU and PAS to get into rakeback and be competitive, where as right now you can still go it alone and compete well. As things grow, and more people are adapting and getting into rakeback, it will soon become just as saturated as standard portals.

Ranking for Rakeback money terms is 10x easier than ranking for bonus only terms.

[Mr-AJ]

Once players get wind of rakeback deals, they will always be on the hunt for better deals

That is not always the case. If there's a way to get more rakeback than you offer you should look how to make your players loyal. Give them some added value they can't find somewhere else. One great added value is a personal contact. Players like to work with other players and they like to be in touch with them through instant messenger or quickly responded emails. A lot of them prefer that even though they get a few percentages more at some big rakeback sites.

[CasinoMack]

If u go the rakeback route alone, don't you have to payout of ur own account to all players underneath you? Seems like a hassle. I know its worth it, but still seems like a full time job. Unless there are automated solutions.....?