Thursday was a busy day for those of us that follow the poker world. Social media and the forums were lighting up early and often after PokerStars announced they would be raising the rake for certain games and ending their Battle of the Planets Sit & Go promotion.
On its own, the rake hike may not have not been met with the heightened level of opposition it ran into on Thursday, but the rake increase didn’t occur in a vacuum. Thursday’s news comes on the heels of several other recent, unpopular moves by PokerStars, which seem to have reached a crescendo on Thursday.
To no one’s surprise, raising the rake (rake being a sacred cow of sorts among players) has been met with the most opposition.
So how big of a deal is this?
Before I get started I should point out that I’ve been advocating that the online poker sites were too player-friendly and giving away too much to their high-volume players: I addressed this very issue in an article on another site back in February that now seems quite relevant to the current discussion.
Everyone should take a deep breath
The outrage was among the harshest and most widespread we’ve ever seen leveled at PokerStars in the history of the company, with many players going so far as to say they are done with PokerStars (a sit-out protest is even being planned) and will take their business elsewhere.
Among the detractors, the overarching theme seemed to be that the company has gone from the most player-friendly site under the Sheinbergs, to just another poker site looking for a cash grab at the expense of the players under Amaya Gaming.
A number of people are also expressing the belief that PokerStars’ monopoly in many markets emboldened the site and is the reason behind the decision to start “squeezing” the players.
The problem is, most of the criticism was and is conjecture. A lot of hand-wringing about what people think will happen, with very little in the way of evidence to back up their claims. It may feel good to vent, but making ridiculous statements like the games are now unbeatable at PokerStars so I’m going to move my bankroll to another site that charges the same rake isn’t solving anything.
Another thing that amazed me throughout the day was the level of concern over what seems to most outside observers to be a small change.
How is it that poker players, bastions of resiliency who have suffered through a $20+ million cheating scandal, UIGEA, and Black Friday, feel a rake hike in select games (which only bring the rake up to industry standards) is what will destroy poker? And not just online poker or PokerStars, but live poker as well.
Breaking Down the statement(s) from PokerStars
PokerStars Head of Corporate Communications Eric Hollreiser sent me a statement addressing the recent changes that have been implemented, focusing on Thursday’s rake increases in particular:
“In recent weeks, PokerStars has made several changes which have upset some players. We’ve heard these complaints and are genuinely listening to the feedback. No one likes higher costs, particularly when times are getting tougher.
In recent years, we have heard many high-volume, professional poker players say that the games are tougher now and it’s harder to win than in the past. This is one of the reasons we’ve actually reduced rake, which helps the ROI of these players. But that’s not making the games any softer, which is what would *really* improve ROI.
Instead, we need to invest in new ways to improve the poker economy.
Our growth initiatives require significant investments in areas of marketing, promotions and product innovation. The funding has to come from many places and it is perfectly reasonable that some of it comes from the income we derive from providing the best online poker platform in the world.
If we can grow poker, everyone will benefit. Even our competitors will benefit, because in a rising tide, all ships rise.
Finally, it has to be said that our rake, our foreign exchange rates and our VIP program are all more competitive than those of our major competitors.”
Hollreiser’s comments (which were later expanded upon by Michael Josem in a 2+2 post) seem to indicate that PokerStars’ current point of view (and strategy moving forward) is that the old way of doing things has fallen short of expectations.
For years PokerStars has given players what amounts to an equal seat at the table when discussing these types of policy changes, and as Hollreiser stated, some of these past changes like reducing the rake “helps the ROI of these players. But that’s not making the games any softer, which is what would *really* improve ROI.”
These statements make the recent changes seem like they have been in the works dating back well before Amaya.
Voices of reason
During the hours following the announcement the reaction was almost unanimously negative. However, as the day wore on there appeared voices of reason who attempted to quell the uprising and explain why the rake increases were not the end of the world that some were making them out to be.
While nobody was happy the rake had been increased (increasing the rake is not much different than the government increasing your taxes, in that even when necessary you’re not happy about it) there were people who tried to explain the logic behind it and put it into perspective.
Poker pro Rupert Elder broke ranks with many of his peers early on, offering up his opinions (with some data) on why the changes weren’t a very big deal. Elder’s Twitter timeline on the topic began by putting the change into simple, easy to understand terms. That was followed by a quick comparison of PokerStars’ new rake and that of their competitors.
PocketFives.com owner Adam Small posted a flurry of tweets on the topic later in the day, criticizing the critics, particularly the reactionary outrage that was on display. Small’s dozen or so tweets is perhaps the best summary on the rake hike in my opinion, and luckily Chris Grove collected all his tweets for easier reading.
Jon Augiar was another person who found the reaction to the changes to be misplaced, noting that we need to look at changes of this sort from the business’s point of view as well as our own.
Adam Krejcik of Eilers Research had a similar opinion, and a quick perusal through the replies to his tweet shows many people are taking a more cautious approach to the change, and at the end of the day found the decision to be unsurprising.
So what happens next?
Reading through the 2+2 thread, a lot of people are intimating that PokerStars recent decisions have opened the door for a new competitor to emerge. But is the door really open?
PokerStars is considered the best in the business on a number of fronts. From customer service, to tournaments, to software, and prior to today’s rake increase, on that front as well, it was PokerStars and then everyone else in virtually every category.
Since Black Friday, PokerStars was the easy choice (the only choice in some people’s minds, which ironically helped them create the monopoly that these same players are now decrying after several years of laughing at anyone who played anywhere but PokerStars): Not only did they have the best product, but they were also charging less than their competitors!
888, iPoker, and partypoker now have an opportunity to not only compete with PokerStars in terms of rake, but to better them if they make a bold decision. But this is only a single piece of the puzzle, and it’s unlikely that these focused rake increases are going to suddenly prop up one of PokerStars’ competitors, or cause PokerStars to falter.
Considering their inability to compete with PokerStars on the other fronts mentioned above, this is an opportunity PokerStars’ competitors should certainly seize upon – it’s their one chance to really differentiate themselves from PokerStars (something they could clearly market) and offer players a better value than PokerStars – but at the same time it’s hard to envision the rake increase being the impetus to the doomsday scenarios some people are warning of.
Let’s not forget that even after being caught cheating players out of millions of dollars, UltimateBet was still a well-trafficked site. Poker players still head to the Venetian Poker Room even though Sheldon Adelson is trying to block the return of online poker to the U.S.
Point is, many poker players tend to go wherever they can get the best game, and even with the rake increase that’s still going to be at PokerStars because right now the rake is basically the same across every site.