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Daniel Negreanu Reacts to PokerStars' Rake Increase

Recent comments by Daniel Negreanu defending the increase in rake at PokerStars are being strongly criticized within the online poker community. Specifically, he said:

“I am fully aligned with the direction they [PokerStars] are going.”

Negreanu is known for his propensity to speak his mind. Given his role as the lead sponsored pro at PokerStars, many assumed it was only a matter of time before he let everyone know his thoughts on all the changes made to the site since its acquisition by Amaya Gaming.

Personal Attacks Within the Community Way Off Base

It is of course not surprising that many have reacted negatively to what Negreanu said.

What has been surprising is the near universal condemnation not just of the comments – but of the man himself. Ad hominem attacks have flooded the 2+2 forums in recent days, even going so far as to call for Negreanu’s recent induction into the Poker Hall of Fame to be rescinded.

It’s understandable that emotions are running high right now. When some of the most respected names in the high stakes community begin wondering aloud about the future viability of the game, it’s clear that concerns about the future are not without some merit.

Nevertheless, there is a certain irony in the fact that within mere days of receiving the game’s highest honor his comments are being dismissed out of hand. The main charge of his detractors – that he is following the company line – are off the mark. While it is definitely a fair assumption that Negreanu has no interest in biting the hand that feeds him, it is also obvious to any objective observer that he was not under any obligation to publicly respond so positively to the changes.

Negreanu’s role largely consists of being the face of poker to the recreational player base; if PokerStars had wanted to do damage control within the community, they would have made someone who currently grinds high-stakes on the site such as Ike Haxton fall on the sword instead.

There is simply no rational reason to not give a fair hearing to what the youngest-ever member of the Poker Hall of Fame has to say at a critical moment in the history of the industry.

Going Down Negreanu’s List

Negreanu makes three main points about the recent changes:

1) They were going to happen anyway

“First of all, I think it’s really important to note that most of the recent changes were going to happen well before the new ownership group took over,” he said.

This is the most important part of the post, since it ties directly into the currently popular narrative that PokerStars under the leadership of the Scheinberg’s could do no wrong. If it was in fact the old management that planned this overarching reorientation of the company’s business model, then the community should be willing to wait longer to see the results before condemning it.

2) PokerStars Remains the Cheapest Place to Play Online Poker

“I think it’s really important to note that PokerStars remains the cheapest place to play online poker,” he said.

The price of poker has definitely gone up at PokerStars. It is still the cheapest site on average but it can no longer claim to be beating the competition across the board.

At the mid-stakes, it is true that the site is still the cheapest at the $0.25/0.50 and $1/2 stakes when three or more players see a flop. However, it’s now only on par with its competitors when only two players do (this includes designated HU tables).

At high stakes things become even more interesting. The site is now either on par or cheaper with competitors at all levels except for when five or more players see a flop at $25/50, where it is actually more expensive than at 888.

3) Spin & Go Tournaments Specifically were in the Works Pre-Amaya

“When the new popular Spin N’ Go format was introduced on PokerStars, many thought this was based on a directive from the new AMAYA group. That’s just not true,” he said.

The introduction of Spin & Go tournaments was the biggest concern player’s had before the rake increase. It is a fact that PokerStars did not invent the format and instead has chosen to integrate it after seeing its success elsewhere. It is certainly plausible to believe that old management felt they were losing a portion of recreational traffic to other sites, and moved to capture as much of that market share as possible.

Bottom Line: He Believes the Poker Ecosystem Will Benefit Overall

Negreanu already made headlines when he declared that winning players were what was killing online poker. These most recent comments are certainly in line with that thinking.

“As I wrote in a previous blog, [without] bringing new recreational players to the game, poker games simply die. It’s imperative that we attract new players and I do believe the company’s strategy will do that,” he said.

The truth of what he is saying here cannot be denied: the game needs recreational players. What is still an open question is whether or not these changes can attract new players while retaining the old ones that have grown PokerStars into what it is today.

Don’t Shoot the Messenger

There are only two ways to increase the concentration of recreational players in a player pool. You can either bring more recreational players in, or take more professional players out.

The community of online grinders was already feeling under threat as PokerStars shifted to a strategy designed to bring the company new recreational dollars while providing as little access to them as possible. Now, it is clear that PokerStars has chosen to tackle the other side of the equation through a rake increase which management knows will have no effect on recreational players, but will cause some grinders to quit the site for good.

It is understandable that the community is frustrated by these new tactics. However, what they ultimately mean for poker over the long-term is far from settled.

Therefore, when Negreanu writes, “If that strategy works, that could mean more profit for online grinders in the long run,” he at least deserves the benefit of a fair hearing.

 

 

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Bradley Chalupski

Bradley Chalupski made his first deposit onto an online poker site in 2009 and has been paying rake and following the poker scene ever since. He received his J.D. from the Seton Hall University School of Law in 2010.

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