PokerStars Steve took to the 2+2 forums today to announce major increases to the rake charged for both cash games and Sit & Go tournaments on PokerStars.com and shared liquidity sites. He also announced the “Battle of the Planets” Sit & Go tournament promotion will be ending as of November 1, 2014.
Games that will be charged higher rake include:
Both pot-limit and no-limit cash games;
Heads-up hyper turbo Sit & Go tournaments;
Spin & Go Tournaments.
Community In Uproar
The condemnation was swift and fierce as the online community took to the forums en masse at 2+2.
The underlying charge being leveled at PokerStars is that given the reduction of edges in the online game due to “Black Friday” and market ring-fencing in western Europe, the PokerStars ecosystem cannot support the net loss to players that will result from an increase in rake.
Simply put, many believe that this increase in rake will make the games unbeatable.
There had already been grumbling on the forums in recent weeks as PokerStars rolled out numerous changes perceived by online grinders as being designed to increase the company’s margins at the expense of the health of the site’s economy.
However, this change seems to have set the wheels of a full out revolt by PokerStars regulars in motion. Players have begun to post emails they have sent to PokerStars asking their account be permanently closed. There are also plans for a player sit-out protest on November 5, 2014 at 18:00 GMT.
Debt Burden Forcing Changes?
The verdict is in – this ain’t the Sheinbergs’ PokerStars.
When the Amaya Gaming Corporation first made its $4.9 billion purchase of PokerStars this summer, it made headlines all across the iGaming world. The industry lauded the sheer size of the sale price as confirmation of iGaming’s profitability. Legislators in the U.S. became excited that the world’s largest poker site could now bring the tax-paying masses to the virtual felt in their state too.
Within the community of PokerStars’ regular players, however, the optimism was more guarded. The price Amaya paid to acquire PokerStars was heavily financed by debt and is nearly five times the $1.1 billion in revenues the site had in 2013.
Many wondered out loud if a publicly traded company with so much debt – and answerable to shareholders looking for an immediate return on their investment – could resist the temptation towards a short-term increase in profits at the expense of the long-term growth strategy which built its player base and is widely credited within the community as the reason for the site’s success.
The Unstoppable Force Meets the Immovable Object
Dedicated poker players are generally considered to be an inelastic demand source. While that may be true to some extent, there are limits.
PokerStars has made several changes since its acquisition by Amaya that have been criticized by the site’s regular players as making it harder for them to turn a profit:
The introduction of Spin & Go tournaments
A decrease in the value of the PokerStars VIP club for “Supernova Elite” (SNE) level members
The implementation of currency conversion fees for cash outs and withdrawals not in USD/EUR/GBP/CAN
However, at the most the arguments against each of these changes can only be said to have a tangential effect on a player’s profitability: Spin & Go tournaments divert recreation traffic away from games grinders prefer; SNE benefits as a package are still better than what you could find on any other site; your bank would charge you a currency conversion anyway. None of these directly affected the amount of money a player could take off the table.
A rake increase, however, is like someone reaching down into your pocket and taking money out of it. That is a very different concept from Spin & Go tournaments causing a 10% decrease in site traffic for your chosen game.
Up until now, calls for protest action against the PokerStars changes have been largely derided within the community as ineffective and counterproductive. It appears, however, that money being taken directly off of the table is a game changer.
As more and more respected members of the community take to Twitter to voice their displeasure and their fears for the long term health of the game, it seems as though PokerStars is beginning to toe the line between maximizing short-term profits and alienating the long-term player base.
It remains to be seen if anything will come out of this new player outrage. Regardless, it will be very interesting to see what changes, if any, PokerStars will choose to make.