Party's anit-rakeback stance

[grimel]

Why does Pary care what the affiliates do with the money?? I play Party for the bonus $$ and split to where I have rakeback accounts.

AP told my affiliate how to correct their technical screw up (why they couldn't just move me into his column I don't know) by resigning up with a new name. AFTER playing out my bonus and starting a new bonus with the new account. That is wanting business. Party seems to be wanting to become smaller.

[Tuco]

Party wants to be attractive to investment bankers who dont really understand the world of affiliates and rakebacks. They are floating a multi-billion dollar IPO.

Tuco.

[kenberman]

[ QUOTE ]
Party wants to be attractive to investment bankers who dont really understand the world of affiliates and rakebacks. They are floating a multi-billion dollar IPO.

Tuco.

[/ QUOTE ]

I think you're seriously overestimating how 'complicated' this situation is. it's quite simple, and any banker working on the deal will figure it out in 15 minutes.

[balkii]

the reason party discourages rakeback is:

players who already have party accounts are leaving party to join another skin, or closing existing party accounts and resigning up under affiliate who give them rakeback. this means that party isnt attracting new players, but instead is giving money to affiliates who arent attracting new players.

[Losing all]

[ QUOTE ]
Party wants to be attractive to investment bankers who dont really understand the world of affiliates and rakebacks. They are floating a multi-billion dollar IPO.

Tuco.

[/ QUOTE ]

I really don't understand the logic of this. Unless they plan on ending the entire affiliate program.

lets show our banker the books with rakeback- Affiliate Fred has 10 players that generate 10K a month MGR. fred gets $3K from party, Fred pays $2500 to his players, Fred makes $500, PARTY makes $7000. Banker- "I piss on this company"

No rakeback- Affiliate Fred has 10 players that generate 10K a month in MGR (if non have left or cut down on playing time due to change) Party pays Fred $3K, Fred makes $3K(maybe), Party makes $7K (maybe). Banker- "I'll take 50,000 shares"

Anyone care to explain how option 2 looks better to Wall st?

[lorinda]

You missed the bit about Fred only having two customers last month and taking eight people from Empire who were paying 100% rake and stealing 30% of the rake from the site by getting those same people to sign up under their pet goldfish's name.

This is not how all affiliates work, but this is the part that the stock market will see.

Lori

[lorinda]

Anyone care to explain how option 2 looks better to Wall st?

Option 1 has inflated figures.

If Party charged double the rake and paid 50% rakeback, then they would have double the revenue (and double the costs) and appear to be double the company.

The current scenario is a version of that and the stock market would consider it naughty.

Lori

[Losing all]

Gnomes would seem to be a bigger issue on the bonus side of things. I wish they could stop it, but I don't see how they can. The dude doesn't have any bogus accounts, the dude just wnats his (very) small piece of the pie. The dude might need a real job. Boo

[Gotmilk]

[ QUOTE ]

If Party charged double the rake and paid 50% rakeback, then they would have double the revenue (and double the costs) and appear to be double the company.

[/ QUOTE ]

Lots of companies offer discounts to large customers and don't have to deal with those criticisms?

[b0000000000m]

Huh? Absolute revenues are not really that important. Everyone knows you net it out, so I don't think there would be any benefit.

[StellarWind]

The accounting and IPO issues have been mentioned.

There is also a fundamental business issue that may concern Party. Vastly oversimplifying, Party has two kinds of affiliates. "Fisherman" affiliates catch fish and bring them to Party in exchange for a fat commission and pay no rakeback. Fisherman are extremely important to Party. Party dominates the industry despite being mediocre or worse in every business function except marketing. Much of this is due to the efforts of the fisherman.

Rakeback affiliates provide rakeback to serious players. Rakeback affiliates create relatively little new business for the Party network although they often move that business around from skin to skin. Rakeback affiliates have limited value to Party.

When the rakeback affiliates began to advertise in a very public way a crisis developed. I suspect Party correctly fears that the rakeback affiliates will eventually drive most of the fisherman out of business. That is simply something Party cannot allow to happen. There need to be affiliates who spend a lot of money recruiting fish with advertising and cool websites. That can't happen on the affiliate's share of current rakeback deals.

Party is playing a very dangerous game here. There are a lot of hungry young sites that would like to grow. The biggest obstacle they face is their small size which makes their games unattractive and deprives them of the revenue streams they need to do serious marketing. Party is making it a lot easier for anambitious site to grab a bunch of serious players at relatively low acquisition cost. Once this process starts it could easily snowball as more players create more games and more revenue--which in turn brings in even more players.

Once such a process starts it may be very hard for Party to reverse it. It seems unthinkable now that Party could lose its grip on the market, but it very easily could.

[sublime]

wind-

as usual you seem well versed on the subject. i have a question for you. these 'fisherman', are they signing up players and selecting the % of MGR offering, or are they snatching up the quick $65?

[JohnnyHoldEm]

[ QUOTE ]
Why does Pary care what the affiliates do with the money?? I play Party for the bonus $$ and split to where I have rakeback accounts.

AP told my affiliate how to correct their technical screw up (why they couldn't just move me into his column I don't know) by resigning up with a new name. AFTER playing out my bonus and starting a new bonus with the new account. That is wanting business. Party seems to be wanting to become smaller.

[/ QUOTE ]

it simpele and fact party hafe no interest in affiliate biz to not go to what is states in terms before what is said in agfreement.

wnen hou ouberak that they care. then they take your sineup and you ano longer have him. and you agree tin the terms before when you said affiliate signup.

grow up, thats is the way it si and you agreed.

[wdbaker]

[ QUOTE ]
[ QUOTE ]
Why does Pary care what the affiliates do with the money?? I play Party for the bonus $$ and split to where I have rakeback accounts.

AP told my affiliate how to correct their technical screw up (why they couldn't just move me into his column I don't know) by resigning up with a new name. AFTER playing out my bonus and starting a new bonus with the new account. That is wanting business. Party seems to be wanting to become smaller.

[/ QUOTE ]

it simpele and fact party hafe no interest in affiliate biz to not go to what is states in terms before what is said in agfreement.

wnen hou ouberak that they care. then they take your sineup and you ano longer have him. and you agree tin the terms before when you said affiliate signup.

grow up, thats is the way it si and you agreed.

[/ QUOTE ]

Holy Shite man, was that some new form of English, can we get an interpreter???

Customer Service at Party doesn't talk that bad...

One Street at a Time
wdbaker Denver, Co

[Emperor]

You have hit it on the nose. There are hundreds of companys who use "affiliates" or othe multilevel marketing techniques. Those companies all heavily discourage stealing one anothers customers/downline (they are one and the same in theory), they will discontinue a business relationship if you violate this.

Party started the whole "affiliate" thing really half-assed. You can tell that there was no research done on how the best MLM companies work. Now they are trying to undo the damage.

Personally I think it would be in their interest to find a happy medium, such as allowing rakeback for players that play x number of hands/month, or adopting a progressive MLM plan like PokerChamps.

[[censored]]

[ QUOTE ]
Party wants to be attractive to investment bankers who dont really understand the world of affiliates and rakebacks. They are floating a multi-billion dollar IPO.

Tuco.

[/ QUOTE ]

Having worked on many an IPO in my former job I can tell you this 100% incorrect. GAAP easily deals with this.

[Shoe]

I fail to see how rakeback has anything to do with going pubulic, it's all about party trying to keep a bigger slice of pie for themselves.

[Freudian]

[ QUOTE ]
[ QUOTE ]
Party wants to be attractive to investment bankers who dont really understand the world of affiliates and rakebacks. They are floating a multi-billion dollar IPO.

Tuco.

[/ QUOTE ]

I think you're seriously overestimating how 'complicated' this situation is. it's quite simple, and any banker working on the deal will figure it out in 15 minutes.

[/ QUOTE ]

15 minutes? Try 5 seconds. "We have marketers that work on a commission based on the profits we make on the customers they bring".

[wateronrock]

Nice post StellarWind.

I agree with you that market share could potentially shift quickly in this industry.

A bunch of multitablers who play 60 000-90 000 hands a month is precisely what many sites need to build a customer base. So the advantage is twofold in that we play more hands because of the rakeback incentives, AND we don't play at other sites.

Although Party takes in huge sums of revenue, I would be leery of paying such a large price for an enterprise who's future is so uncertain.

[SinCityGuy]

[ QUOTE ]
Nice post StellarWind.

I agree with you that market share could potentially shift quickly in this industry.

A bunch of multitablers who play 60 000-90 000 hands a month is precisely what many sites need to build a customer base. So the advantage is twofold in that we play more hands because of the rakeback incentives, AND we don't play at other sites.

Although Party takes in huge sums of revenue, I would be leery of paying such a large price for an enterprise who's future is so uncertain.

[/ QUOTE ]

Believe me, there's going to be a lot of competition from other sites if Party continues this crusade. For instance, UB is fully aware that their affiliates give rake back, and they seem to welcome it.

[grimel]

23,786,934 or so companies have sales people that make a residual if the customer keeps coming back. Once the affiliate is paid Party shouldn't care what the affilate does with his money. More than one salesman takes a client out to lunch/golf/bar to keep the wheels greased. If anything Wall St should understand Party has hit the "big time" quickly.

[grimel]

[ QUOTE ]
A bunch of multitablers who play 60 000-90 000 hands a month is precisely what many sites need to build a customer base. So the advantage is twofold in that we play more hands because of the rakeback incentives, AND we don't play at other sites.

[/ QUOTE ]

AP has such a grasp of this point they told my affiliate to have me reup under a different name because they had a tech foul up - AFTER I work off my current bonus. They noticed $1000 MGR in the first week then it dropped off while they figured out what the screw up was. Game Grids has it figured out with the VFP, I made sure to get my 10hrs even though I was out of town most of the week.

[grimel]

1) learn to type in some semblence of English
2) I don't have a rakeback account at any party skin
3) learn to read along with typing, I asked a question
4) you grow up and learn to comprehend what is written

[grimel]

Are they stopping payments to the affiliates?

What happens when the players split for the 10 other sites that offer rakeback?

[Synergistic Explosions]

[ QUOTE ]
Are they stopping payments to the affiliates?

What happens when the players split for the 10 other sites that offer rakeback?

[/ QUOTE ]

Party is like crack cocaine, nobody actually ever leaves once they get addicted.

[grimel]

I played long enough to clear a please come back bonus in Feb/Mar and long enough to clear this month's bonus. I'll play again at the next bonus - maybe.

[Benholio]

[ QUOTE ]
the reason party discourages rakeback is:

players who already have party accounts are leaving party to join another skin, or closing existing party accounts and resigning up under affiliate who give them rakeback. this means that party isnt attracting new players, but instead is giving money to affiliates who arent attracting new players.

[/ QUOTE ]

Bingo. I agree with this completely.

What was intended to be a way to bring in new players, has turned into a way to reward frequent players. Now that rakeback is on the way out, frequent players will be left without any real rewards.

I guess the question is, will Party replace what rakeback became (frequent player reward) with something even remotely comparable? If not, will there be any real consequences for Party?

[didymus]

[ QUOTE ]
[ QUOTE ]
the reason party discourages rakeback is:

players who already have party accounts are leaving party to join another skin, or closing existing party accounts and resigning up under affiliate who give them rakeback. this means that party isnt attracting new players, but instead is giving money to affiliates who arent attracting new players.

[/ QUOTE ]

Bingo. I agree with this completely.

What was intended to be a way to bring in new players, has turned into a way to reward frequent players. Now that rakeback is on the way out, frequent players will be left without any real rewards.

I guess the question is, will Party replace what rakeback became (frequent player reward) with something even remotely comparable? If not, will there be any real consequences for Party?

[/ QUOTE ]
Hopefully with more bonuses lol.

[FlopMe]

If rakeback becomes a thing of the past for all skins, they will probably see an increase in the popularity of the High-Hand and Bad-Beat Jackpot games.

If I lose rakeback at Empire and/or Eurobet, I will certainly move back to Party to play in the High-Hand Jackpot games.

[lorinda]

I guess the question is, will Party replace what rakeback became (frequent player reward) with something even remotely comparable? If not, will there be any real consequences for Party?

I've always claimed they will, but sadly the economists amongst us seem to say otherwise.

There will not be any consequences for Party, but applications at colleges next year might go up.

Lori

[mcozzy1]

[ QUOTE ]
If not, will there be any real consequences for Party?

[/ QUOTE ]

Online poker is a very dynamic industry. There is constant change. It would be a mistake for IGM to assume that they will continue to be the dominant force.

IGM is still making a lot of money off people with rakeback deals; and it works out for affiliates and players as well. If IGM completely eliminates rakeback, that creates an opportunity for another site to bring in a lot of new business. If UB got a few more pros on board and they all decided to mount an aggressive ad campaign, they certainly could catch up to Party.

Players don't have any loyalty to Party Poker. They're either going to go where they get the best deal. I certainly will do my best to convince fish to play sites other than Party if there is no rakeback.

[Rudbaeck]

[ QUOTE ]
I guess the question is, will Party replace what rakeback became (frequent player reward) with something even remotely comparable? If not, will there be any real consequences for Party?

I've always claimed they will, but sadly the economists amongst us seem to say otherwise.

[/ QUOTE ]

I think they will. Once a place like Games Grid takes off Party has to take notice. It's simply not possible to maintain a near monopoly with that kind of profit margin.

As the fish will never understand rake cuts or 'rake free' sites bonuses, hourly payments, freerolls galore etc etc is the way to go.

If Party started giving back 75% of the rake in various forms as those listed above they'd still be a very profitable company by any measurement. And it's pretty much has to happen. If Party doesn't then someone will (hopefully) do to Party what they did to Paradise.

When you sell a $12.99 service for $4000 someone will undercut you.

[i wanna be me]

[ QUOTE ]
When you sell a $12.99 service for $4000 someone will undercut you.

[/ QUOTE ]

This is absolutely correct. The ONLY advantage Party currently has is its marketing - along with the exhibition of economies-of-scale (i.e. the brand recognition/cost saving/promotion range that comes with having such a huge clientele.

This is a great short-term advantage, but when people: a. eventually get frustrated at extremely high rakes relative to their competition, b. get a service taken away from them (rakeback) they are used to receiving, and can receive from a competitor, or c. realize (through word-of-mouth and advertising) that there are actually better alternatives to Party - which will inevitably happen - Party's comparative advantage within the industry will dwindle.

the poker industry will become a perfectly competitive industry with time. you heard it here first.

[StellarWind]

This would not be a bad time for the U.S. government to wake up and legalize online poker.

I'm a little tired of watching the huge American market being handed to foreigners while U.S. gambling businesses watch helplessly. It's a lot of jobs and a huge dent in the trade balance.

[AncientPC]

But the government has a moral incentive to protect us from bad things!

*sigh*