View Single Post
  #5  
Old 01-11-2005, 06:28 PM
grinin grinin is offline
Junior Member
 
Join Date: Mar 2004
Posts: 8
Default Re: why do some rakebacks have sliding percentage scales

The short answer is supply and demand. The bigger players (in terms of MGR) can command a higher percentage than the smaller players because affiliates will fight for their business.

There are basically the same fixed costs associated with each player, say for example $25 per month to service each player. If player A has a $200 MGR and Player B has a $2000 MGR, the affiliate is paid $60 and $600 for the two players by the poker room. If he pays 50% rake back then he is making $5 on player A and $275 on player B. Obviously what he would like, would be for Player A to sooner or later turn into a Player B, but those are few and far between. Also, many Player B's are not simply recreational players, they will demand a higher percentage and since the affiliate is making far more off Player B's to begin with he can afford to offer a better rate to these players.

There is time, effort and risk involved in running the affiliate business. It is probably not worth it to most affiliates for less than a $50 profit per account per month.