Re: Party CFO conversation: Trip report
 

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In short: My impression, along with the impressions of a lot of other people, I guess, was that Party regards us primarily as a hassle, and that they see their business model as catering to an ever-rotating group of recreational gamblers. This conversation would seem to strengthen that impression.


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That is the dumbest business model ever. There are practically no successful businesses that don't get most of their revenue from a core of long-term loyal customers.

If they really believe that, they are doomed to failure.

Re: Party CFO conversation: Trip report
 

i like how everyone is talking about all the "pros" leaving party. wow, really? ok then, see ya guys!

Re: Party CFO conversation: Trip report
 

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i like how everyone is talking about all the "pros" leaving party. wow, really? ok then, see ya guys!

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I like even more how everybody talks about 2+2ers being "the pros", LOL.
Being a menber of a (no longer)exclusive club doesn't do the trick....

Re: Party CFO conversation: Trip report
 

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The skins had be free-riding Party. Party did all the marketing to get fresh meat to the games and the skins did close to nothing. Once a new player gets knowledgeable he leaves Party and goes to a skin to play under rb. So Party had to pay the cost to get new players. Most new players bust and the long term players tended to move to the skins. This just had to stop sometimes.

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Well put. ... volume players will likely return to Party from the skins.

Longer-term, however, the picture seems much less clear to me and Party appears (given the information available at this moment) to be relying on low-volume recreational players. ... will drain more money per customer, but these same customers likely have fewer $$ to spend on gambling, and will of course go broke faster than if the -EV bets like BJ weren't offered. In other words, Party seems to be banking on a constant stream of new guys with a few hundred/thousand to blow, and long-term I don't see where you find them.


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Great post above as noted, and long-term they plan to find them where every other B&M casino and sportsbook and online sportsbooks has found them. They're us. We're everywhere.

Good poker players don't have leaks? Don't bet football? Don't play bj and craps? Sure we do.

The key point was killing off the free-riding of the skins. Had to be done from a business POV. Whether or not they offer rb depends on the demands of the market and any new competition that may threaten them.

Plenty of players are going to gambool it up at the casino tables, and poker players 'tilt off' a few there as well after a bad beat. Party'd rather have that $200 steam loss rather than you giving it to a poker pro with no leaks. JMHO.

Naj

Re: Party CFO conversation: Trip report
 

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Moreover, relying on recreational, low-volume players would seem to violate Malmuth's rule for successful cardrooms: "Regular players are very important to a cardroom, simply because they are the core around which the games are built. If there were no regular players, it would be almost impossible to start games, and assuming that a game could be started, it would break very quickly.

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I do not think this is applicable to almost all online games, with the only exception of high stakes games with a small player base.
If you are only getting a small number of new players coming in (by 'new', I mean entering the site/casino, not new to the whole thing) then it can be hard to get games going and maintaining them is obviously important. However when you have 100's or 1000's of players playing for fun at a particular limit at any time, this does not matter nearly as much imo, if at all.
The only exception is getting new tables started - but do new tables get started by serious multitablers at the moment anyway?

quite a few good points in this thread.

Re: Party CFO conversation: Trip report
 

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Re: Online Poker : 75% of loosers [Re: Big Game Frank]
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I read a report from an analyst from Goldman Sachs who is in contact with the management of Paradise Poker (owned by UK company called Sportingbet).... Sportingbet/Paradise management told the analyst that only 8% of their accounts have won money.

Another stat: Party Poker said the top 10% of their customers give them 70% of their rake...

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I worked this out for single-table tournaments a while ago and decided that any number in the 80-95% range is plausible for the percentage of losing players. It depends on exactly how much the average winner wins (the average "winner's" ROI) and the exact rake paid (I used 10%). It seems as though most long-term STT players stick with a level that gives them a 10-20% ROI, which makes the 8% long-term winners number seem even better.

I have a problem with the way the second statement is being interpreted. Any group that is paying 70% of the rake is necessary playing in 70% of the tournaments. So that implies that the top 10% of the players, in terms of rake generated, are playing 70% of the games. People have been implying this top 10% of rake-generators is the winning 10%, or at least close to it. There's no way this could be true. Either the 70%-of-rake-by-10% number is wrong or, if it is correct, those top 10% of rake-generators are split in terms of winners and losers. If 3/5 of the top 10% of rake generators were winning players, that leaves 42% of the games being played by winners. Therefore 58% are played by losers, adding up to 8% for the house. This also says that 4% of the players are high-volume losers.

Using these numbers (this is nowhere close to a fully-defined system) gives:
6% are high-volume winners
4% are high-volume losers
2% are winners who only play occasionally
88% are losers who only play occasionally

Anyone like this way of looking at it? Does this make any sense?

SlimP

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Well, I still think that only about three out of five high-volume playes make money. The high-volume players are exactly as valuable to Party as the fraction of rake they pay. No more, no less. Why would you expect them to continue to allow us to exploit their loss-leader for games with a definite house edge? If the $4.99 early-bird buffet gets too popular, the casino gets rid of it. The senior citizens complain, but they still show up to play slots just the same.

Right now, the higher concentration of fish on the newly-separated Party platform is way more than +2.5% ROI for me, so I sure as hell don't miss rakeback. Does anyone else feel this?

SlimP

Re: Party CFO conversation: Trip report
 

What I get out of this thread is this:

Party wants to use their brand and playerbase to launch a full scale casino in addition to their poker room, and ultimately sees the online casino business as a more profitable avenue than poker. Unlike the casinos they own (planetluck/starluck/others?), party has the most well known brand in online gaming and can transfer over the "fish" to a gambling avenue that generates party more money.

Party does not see the 2+2 type of poker player as the "future" of its revenue stream. While this customer will make them money, it's "sub-optimal" in that it does not fit in with their strategic plan of using their brand to convert current customers to casino games. I don't think party views pros/semi-pros as a "hassle" so much as not being its primary area of focus, and thus being called "sub-optimal." Clearly there is interest in attracting 2+2'ers to the site, but I would not expect party introducing lavish programs to keep the 2+2'er playing on the site.

From a business point of view, this makes sense. Party is hedging their bets in case the poker boom dies down; they are diversifing their business to include a casino in addition to poker. Remember, they are a public company who is trying to model their business to make shareholders happy. Investors are worried that poker is dying - party's stock is falling apart - they are engineering a plan to diversify their gaming platform so to please the investing community.

That's my take.

-dustyn

Re: Party CFO conversation: Trip report
 

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it's not about fresh money coming in

they make their money on rake, so all that matters is the number of games/hands being played at a time for what average stakes...

the more games/hands/higher stakes, the more rake they collect

if u sit 10 people at a table with $100 each, eventually pp would have all 1k of the money if u all sat there and played long enough...

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Not if someone won all the money before that happens.

Re: Party CFO conversation: Trip report
 

"My impression, along with the impressions of a lot of other people, I guess, was that Party regards us primarily as a hassle, and that they see their business model as catering to an ever-rotating group of recreational gamblers. "

1090 posts and this is a mystery? Almost the entire financial burden of (online) poker is born by these recreational players.

This is why 8-tablers are so unwelcome. Every dollar they cash out represents ~$10 that the site needed to find in new deposits.

Re: Party CFO conversation: Trip report
 

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Moreover, relying on recreational, low-volume players would seem to violate Malmuth's rule for successful cardrooms: "Regular players are very important to a cardroom, simply because they are the core around which the games are built. If there were no regular players, it would be almost impossible to start games, and assuming that a game could be started, it would break very quickly. Put another way, regular players — both those who play very well and those who play mainly for recreational purposes — are the "glue" that keeps the poker tables full.

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While that may be true for B&M cardrooms, I don't see the parallel online. Especially at the lower limits, turn-over at the tables is a lot higher than at a B&M. If a game breaks, you can find another in a minute.

I think that what is more important to Party in the long run is the semi-regular, the guy who plays for a couple of hours 1 or 2 days a week. This is the online equivalent of the tourist who goes to Vegas for a week every year. He may play some poker, but he also plays craps and 21, and his wife plays the slots and shops. Or lately, they both just play the slots or video poker, see a show, eat a lot of food. These folks are the bread and butter of Vegas casinos.

In Vegas, you have to walk past some slots on your way to and from the poker room. Party now has the equivalent with a little action available while waiting for the next hand. Side bets and 21 are just the beginning. And they are an excuse for self-denial for the fish: "Oh, I'm about even. What I win at poker I lose on the side bets." Time for another deposit bonus so he can chunk another couple hundred in there.

I would think that this would be the ideal customer for Party. They want a semi-regular player who enjoys the action, including some -EV stuff, and is willing to deposit another $100 or $500 or whatever whenever his BR gets low.

Professionals generate a lot of rake, but they also have a really annoying habit of making regular cashouts for icky stuff like paying bills. Rent money is not raked money. So I can't see Party going out of its way to cater to or attract people who withdraw more than they deposit.