There has been an interesting debate over the last months about rake distribution, rakeback, and how different poker networks are treating winning poker players. I would like to take this opportunity to clear some misconceptions about Bodog Network’s unique rake distribution formula, and why it is actually good for winning players.
In the B2B relationship between poker networks and poker operators, winning players have historically been overvalued. As all winning players know, the more casual players there is on a poker network, the more attractive the network will be. However, the way the revenue (rake) has been split between operators has not reflected the true value of the players the operators have brought to the network. Operators with a high proportion winning players have gained from this, while operators with more casual players have lost. Because of this, the operators have competed aggressively for the winning players, often with rakeback. When more money is spent on retaining winning players, less money is spent on attracting casual players.
Poker networks have tried to solve this in different ways. Some have banned rakeback and tried to police it, some have tried to cap rakeback, and some have even allowed their biggest operators to ring-fence their players to stop intra-network competition. None of this has worked out very well.
Most poker networks are now addressing this problem in a new way, but there are different schools: the two most extreme examples are the “Bodog Network school” and the “Playtech/Boss Media school”. (Microgaming has taking a cautious approach by making only a marginal change, and I think their rakeback problems will persist.)
Bodog Network is going to solve the root of the problem by changing the way the revenue is split between players at each table, to better reflect the true value of the players. Playtech and Boss Media have chosen another strategy. They will keep the skewed way of splitting the rake, and then fine operators who gain too much from it. It is obviously an inferior model but it was probably easier to implement. The problem for the operators with this model is that winning players might actually cost money. Some operators have already reacted by shutting some of their winning players out – it is an understandable reaction, but at the same time it is hurting these networks’ credibility. I am a winning poker player myself, and I would not want to be treated like this.
Bodog Network’s model is different. Operators on Bodog Network can never lose money because they bring a winning player to the network—the value of a player cannot be less than zero. A winning player will be worth very little, but at least something. To run a profitable business, operators will have to invest in marketing and try to attract casual players to the network. If they succeed, they will be making more money than they would on any other network.
It will be interesting to see if other poker networks are going to join the “Bodog Network school” or the “Playtech/Boss Media school”.
Enough said about B2B. How will this affect the winning players? There are two clear advantages for you:
• There will be a big pool of casual players for you to play against.
• No operator on Bodog Network will stop you from playing.
You will have to win the money at the tables yourself though, and not rely on rakeback or other awards. I think the big pool of casual players will increase your ROI to fully compensate for that, but time will tell.
Fair enough? Well, it’s poker.
Jonas Ödman is Vice President of the Bodog Network.