POKER

Daniel Negreanu, PokerStars and the Death of the Online Pro

TAGs: Daniel Negreanu, PokerStars

Daniel Negreanu talks to Joey Ingram and Dani Stern about his attempts to help bridge the gap between the players and the executives of Amaya, and the prognosis doesn’t sound good.

The first time that Daniel Negreanu made the final table of a European Poker Tour (EPT) Main Event was in Season 7. It was in the Kursalon in Vienna, Austria. He finished fourth.

Daniel Negreanu, PokerStars and the Death of the Online ProI remember the event well. It was my first. PokerNews hired me, who in turn were contracted by EPT/PokerStars, to provide coverage of the event. A few months earlier I was an employee of DB Schenker. One of the largest freight logistics companies in the world.

My first impression of the event was one of plentitude. Why were there so many people employed to cover a game of poker? At my time with DB Schenker we had all become kings of cost cutting. We had to survive the economic crisis of 2008. Here in Vienna someone somewhere was making some injudicious decisions when it came to EBITDA.

A few months later I get a call to work for the World Poker Tour (WPT) in Venice. It turned out that I was working by myself. Here was a company that understood the need to keep costs as low as possible. I felt at home.

Some people will point to an EPT and say that it is the best poker tournament in the world because they spend more money on costs. There are those that will say that the WPT is lacking because they scrimp and scrape. I agree with those sentiments. However, they both need to strike a better balance. PokerStars/EPT go overboard on how they spend their money, and the WPT go too far when it comes to cutting costs.

Before the privatisation of the British Railway (BR) system life working for them was a doddle, in the same way that covering an EPT for PokerNews is. Experienced railwaymen ran BR. Nobody cared if the trains ran on time as long as people, or product, made its way from A to B. Nobody cared about profit. Everyone had a job for life. Why stress about such generalities?

When the decision arrived to privatise BR something absorbing happened. Companies that knew very little about the rail industry acquired us. They saw the potential to turn an unprofitable business into a profitable one.

When a corporation buys a railway company, you would imagine they would want to instil railwaymen in their key positions? How else would they learn about running a railroad, and, therefore, improving performance? But this didn’t happen. Instead, they hired people who knew how to cut costs and create impressive EBITDA numbers.

These companies weren’t interested in performance.

These companies weren’t interested in people.

These companies were only interested in profit.

Intelligent people understand that a decrease in performance and a reduction in workforce morale will slowly eat into profit. But these same intelligent people know that they can show impressive EBITDA numbers before the rot sets in. Leaders like this are thinking very short term, and not long term. Short term thinkers aren’t interested in negotiating and holding dialogue with their employees because that could be very damaging to EBITDA. Long term thinkers know that this is crucial to the success of the company.

In my experience of cost cutting the attack comes in a series of waves. The people who knew nothing about the railways and their tradition would look at spreadsheets. They would employ 80/20 thinking and attack the biggest costs first, followed by a grab everything you can mentality. In the rail industry, the Super Nova Elite (SNE) players were locomotives.

“Take 40% of the fleet out of action.” Came the orders from above.

Each person who failed in that task would be replaced by someone else more suitable. Very few of those instructed to make such drastic changes were experienced railwaymen. It created fear. Those that were experienced were too frightened to speak out against the CEO and his army, and so they pushed on through even though they knew, long term, they were crippling the company.

At the lower level of the business, it was a disaster. Middle management didn’t want to appear to be insubordinate, and so they towed the party line and tried to rationalise the decisions being made by the balance sheet men at the top. The people at the rock face didn’t have any impact whatsoever. Nothing seemed to make sense. There was miscommunication and confusion everywhere you looked.

Then another wave of attacks.

This time directed on a more personal level.

Railwaymen’s individual earnings that were additional to their actual salary were blinded away. There was a history of these payments. Some of this history went back decades. The trade union fought tooth and nail to protect their employees rights. They won some and they lost others.

When the gong was finally hammered. Survey what you have left. You have a business where mistrust is in the core. The heart of the company is rotten. The employees believe they are living in a world of infantilism. There is no trust. There is no morale. There is a worry that the business is going down the pan. They help take it that way because by this time they no longer care. All the while the rich just keep getting richer.

I kept thinking about this when I was listening to Daniel Negreanu, Joey Ingram and Dani Stern talk about the impending changes at PokerStars. There was an infidelity that seemed eerily familiar. What started out as a thimble of distrust and anarchy has turned into a cauldron of annoyance, frustration and bewilderment.

I have to applaud Amaya cynically.

They are playing a perfect game of poker, and once again it reminds me of a game I was deeply immersed in during the economic crisis of 2008. Back in that time when nobody wanted to buy steel, we had to cut costs. Even the most ardent trade unionist could see that if we didn’t take out resources we would fold.

What the management did next was brilliant.

It reminded me of a classic Only Fools and Horses sketch where Rodney and Del Boy were in a heated argument over something when Del Boy started to utter that immortal line, “Your mother told me on her deathbed.” When Rodney interrupted by saying, “I don’t believe it, Del. Last week when we were arguing about who should go and get the fish and chips you said that mother said on her deathbed…tell Rodney to go and get the fish and chips.”

The phrase ‘economic crisis’ was used as an excuse to override trade union agreements, and take the piss. The company managed to take far more costs out than it ever needed all on the back of a faith agreement they had with the trade unions. The same is happening in poker only the phrase isn’t ‘economic crisis’ the phrase is ‘recreational player.’

Make no mistake about it, these changes, and all the changes that have happened in the past few years – they are all about EBITDA. And I am reminded of a conversation I had with Talal Shakerchi, who said although the changes have escalated since Amaya bought Stars, the changes were introduced as soon as PokerStars gained a dominant position in the marketplace.

“The changes didn’t start with Amaya; this started once PokerStars established its dominant market position. We began to see fewer promotions, less added seats in sats, encouragement of more profitable {for PokerStars} and less skilful poker, etc. They always seemed to be looking for ways to squeeze a bit more out of the system.” Said Shakerchi.

PokerStars are playing a very efficient game of poker.

The Role of Daniel Negreanu

I have repeatedly written about the need for the formation of a players union. It’s the only way to unite professional and recreational players alike. A 72 hr strike is admirable, and it shows the ability to create change quickly, but it’s not a long-term solution.

During the interview, there were constant references made to the halt of player meetings between PokerStars and the people who make them rich. I was always sceptical of these meetings having been involved in one myself when with the WPT. It was clear that the company was willing to listen to the players, but the final say on changes would rest with the enterprise. This isn’t a negotiation. This isn’t debate. This is lip service.

Daniel Negreanu once said that he has so much money he would never be able to spend it in his lifetime. I imagine PokerStars pay him well, but I am sure he will survive if he didn’t have that monthly check. But he is currently caught between a rock and a hard place. He is a player who wears his heart on his sleeve. He remembers where he came from. He is also a PokerStars employee. He knows how important they have been to his rise to fame. He will feel a sense of loyalty to both parties. I could see that he was wracked with angst during the interview.

Negreanu would be the perfect leader of a player’s trade union, but he would have to leave PokerStars to take on that role. Why should a multi-millionaire take on that hassle? Because he loves the game, that has provided him with those riches. He wouldn’t be spending so many hours communicating with everyone about this debacle if that wasn’t so.

What Negreanu cannot continue to do is try to appease both sides. It won’t wash. Eventually, PokerStars will cut him adrift and throw his carcass in the corner with all the dead SNE’s.

He is the right man for the job because of his status within the game and his relationships within PokerStars. It is clear from my viewpoint that Amaya bigwigs are directing orders down to middle management, and they are implementing them without the belief that they will work. It’s why the communication has been a shambles. I have seen it before. There are no guts to these changes. There is no transparency.

Negreanu raised an important question, but never answered it. He asked if he could do more good staying with PokerStars? I think he could do more good leaving PokerStars and becoming a voice for the whole of poker.

The Death of the Online Pro?

When you put things into perspective, the three-way between Ingram, Negreanu and Stern was nothing more than a chinwag beside the water cooler. It’s such a tragedy that this is happening. Why is it so inconceivable to have an Amaya representative on that call? It’s also, I think; I sure sign from PokerStars that they couldn’t give a fuck about the professional online poker player. They are nothing but a pain in the ass.

Negreanu consistently made reference to significant changes that will come in 2016. He could not talk about what they were, but he was excited about them. Thin slicing his behaviour it seemed likely that these promotions will be designed to attract more recreational players. Dani Stern mentioned that 441 players made SNE last year, earning somewhere between $50-70m in bonuses. PokerStars don’t care about losing that custom. But they do care about saving $50-70m, particularly if they are confident that by axing professional’s bonuses they can use that dollar to invest in more marketing campaigns directed at attracting more players like my Dad.

I came away from that call with the inkling that someone high up in Amaya has said, “fuck the pro.” It seems as if everything is geared up to make profits, and there is a belief that the pro eats away at this profit. The logic doesn’t make sense to those in the trenches, but it’s the vibe that I get. If I were an online poker player, I would seriously be considering a new vocation in life. It’s about to become as reliant as an ice lolly vendor at the peak of Mount Everest.

Where is the Competition?

Going back to my conversation with Shakerchi and he said the only reason PokerStars started abusing their power was because they had such a large share of the market. If this is true, then a strike will not change their behaviour. Daniel Negreanu said he believed the player’s strike could do more damage, than any intended good, and I think that’s true. The players are giving the hierarchy the opportunity to assess what life would look like without them.

I am surprised at the lack of movement with PokerStars competitors. Here are 2,000+ disgruntled poker players, and I haven’t seen any form of propaganda designed to lure them away from their troubles and into some new promised land.

Why is this?

Is this because the other online poker sites don’t want professional poker players on their sites? Do they also have plans to turn the game of poker into a different type of game that blurs the edges and makes it more like craps? I don’t know what’s happening, but their silence is deafening.

You can cut this up any way you like. It’s a classic case of Robin Hood with one difference. Robin Hood used to rob the rich and give to the poor. He kept his arrows in his quiver whenever he could. PokerStars are firing them with abandon. They don’t want to rob the rich to give to the poor. They don’t want any rich unless the rich have positions within the hierarchy of Amaya Gaming Inc, and unfortunately, I don’t think that’s the right place for Daniel Negreanu to be moving forward.

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