On July 1, 2012, the Microgaming Poker Network will introduce a new rake allocation model they are calling True Value. It’s a dual-layer rake distribution, which will change the how rake is allocated to operators on their network.
In a press release Lydia Melton, Head of Network Games at Microgaming said, “What sets True Value apart from other networks’ solutions to the valuation problem is that it uses a dual layer system, which does not impact the players themselves. Any players earning rake-based promotions, like bonuses, will clear those promotions at the same rate on True Value as on the current method”
So rake will no longer be allocated to operators simply on a volume but they’ll be using a model that includes volume and the player’s win/loss ratio.
If this sounds familiar, well it is, the Bodog Poker Network and the polarizing Bodog recreational poker model has included a dual layer system since the idea was introduced a couple of years ago.
While what Microgaming is doing is not new in any way; we should commend them for taking positive steps to promote a rake distribution model that is friendlier to the poker eco-system.
It’s a smart move to make the changes in such a way that the players won’t feel the pain; they’ll still earn their bonuses and clear promotions at the same rate as before. Some operators could feel the pinch of the True Value system if they’ve focused their energies on acquiring net-withdrawing over net-depositors. While exact details haven’t been revealed but we can safely speculate that poker companies on the network who focus on the net-withdrawal players will see their allocation of rake cut under the new system.
Back in 2010, Odman described his model to EGR Magazine:
“The root of the problem is the way rake is distributed among players, and that is where the Bodog Network intends to address the problem,” Odman says.
Losing, casual players are the type of players poker networks want, but Odman says “the way the rake is currently split, winning players get a (too) large proportion of the rake” and skins on the network end up having to slash their margins to put the rake back deals on the table needed to attract high-raking, winning players. This progressively erodes the money left in sites’ marketing budgets to spend on attracting losing, casual players, starving networks of the liquidity they need to grow in a sustainable manner.”
When asked of the Microgaming change, Jonas Odman said, “The contributed method of rake attribution is a step in the right direction since players with a loose style will be worth more to operators than tight players. This is good from an entertainment point of view because loose players make the game more fun to play. It is slightly different than our system, and also Ongame’s Essence model, which both focus on player results rather than style, rewarding operators who bring net depositing players to the network. But since most loose players are net depositing players the effect will be similar.”