Hey Dikshit

[CORed]

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You're forgetting the fact that pros are mostly useless customers, since they don't put any of their own money in. What Party is looking for is new money, not people to take money out of the system forever.

Common sense 101

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As long as there is a difference in skill level, ther will always be winners and losers in poker games. However, if the losers do not continue to deposit, or new losers come in with new money, the player base and total bankroll of the players will decrease. New money coming in is essential to both the cardroom and the pro player. If the less skilled players drop out, and are not replaced by new unskilled players, the less skilled winners will become losers, and the win rate of the best players will decrease. It is in the interest of both Party and winning players to bring new money into the system. It is not in the interest of the winning players for the cardroom to offer house-banked carnival games that transfer money directly to the house without the winning players getting a share.

I think it is very likely that we have reached the peak of the poker boom. This doesn't mean that the sky is necessarily falling, but it does mean that games are likely to get tougher, especially at higher stakes. One of the problems with internet poker is that it makes it harder for the fish to fool themselves. In live games, their poker funds are not separate from pocket money, most don't keep good records, and it is easy for them to kid themselves that they are winning or "just about enven". In an internet cardroom, the history window in the cashier will tell them the cold, hard truth: They have deposited way more money than they have cashed out. Some may decide that they are getting their money's worth in entertainment, but some will either quit, or start reading and working on their game. I'm not one who believes that all the fish will necessarily quit: After all, casinos continue to get slot customers, but I think the best of the poker boom may well be behind us. I'm glad I didn't quit my day job.

The problem with the winning skin players for Party is that they were generating little revenue while taking money out of the poker system. The skins and their affilliates, instead of bringing in new fish, were largely taking the winning players away from Party, so that instead of the full rake, Party was getting only the cut from the skins. Whether Party's move was good business or not remains to be seen. I certainly don't like the sneaky, underhanded way they went about doing it, but I understand why they did it. It doesn't seem to me that they are totally abandoning the winning player. They increased the number of tables we are allowed to play from 4 to 10. I think they are saying to the winning player, "You can play here, but we want you to pay the full rake". If the winning players choose to go elsewhere, it's not great for Party, but it's probably not a fatal blow.

[daveymck]

Party needs to do three things to grow its income.

1 Get new players.

2 Retain the players it has.

3 Earn more money from the current base.

I suspect at the moment the measure and things they are looking to put in place are more aimed at 3, it may conflict a bit with aim 2 and piss off some players but I suspect in a couple of weeks when everything has calmed down and the waters become less muddy that things will be back to normal except the skin multi tablers will be party multitablers probably with less of a rakeback/loyalty bonus but with some.

[EStreet20]

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Only money regularly deposited into the system contributes to the rake

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Whether money is newly deposited or sitting in an account for a year, once you play with it it contributes to the rake. I think this poster means that cashing out profits offsets some of the rake you pay (in party's eyes from a profit sesne). But if they don't expect winning players to cash out they shouldn't operate a gambling website.

Party's ideal cutomer is a compulsive gambler, twice as hooked as your average heroin addict, who sucks at poker (or who prefers blackjack and "sidebets") and has millions of dollars.

Good luck all,
Matt

[kiddj]

[ QUOTE ]
Party's ideal cutomer is a compulsive gambler, twice as hooked as your average heroin addict, who sucks at poker (or who prefers blackjack and "sidebets") and has millions of dollars.

[/ QUOTE ]
This person is much more valuble than multiple sharks, playing multiple tables around the clock. Regardless of the rake. These sharks will eventually probably bust-out thousands of recreational players who don't have an endless bankroll, or (after losing) think that online poker is rigged.

When I put my 1st $100 on Party, I lost it within a few weeks playing $0.50/1. It was over 2 years before I played there again; and the only reason I did is because I learned the game and was finally winning. If I didn't have the desire or ability to learn the concepts of correct play (which I suspect a HUGE majority of people don't), I would have been done forever.

The more fish there are (or a high fish/shark ratio), the more Party makes.

I'll make up some numbers of my own, here. All of this is a simplification, but it may prove useful.

Say you have 1 table of 10 fish, badly playing away. They are generating $100 in rake per hour, with each fish on average losing $10 per hour.

Now add 10 sharks to the equation. We have 2 tables, each with 5 sharks and 5 fish. So now $200 in rake is being contributed, but the average fish is losing $30 per hour, while the sharks are making $10 an hour each.

The question is, is this good, or bad, for the poker room? They're making twice as much money, which sounds good. But will they make twice as much in the long run? Or will too many of the fish quit playing altogether, or play many fewer hours, thus lowering the poker room's income in the long run?

If the average fish, the average losing player, ends up playing half as much as he would have without the sharks present, then the poker room breaks even. Less, they lose money and want the sharks gone. More, they make money and want the sharks there.

I think nobody actually knows the answer to this. Variance makes it difficult for most players to even know if they're winning or losing players, and some players will keep right on playing large numbers of hours no matter how much they lose, and some will allocate a certain amount to lose and then never play again once it's gone. Nobody really knows what the net effect would be of removing the winning players from the system.

[Petomane]

Over the last few days Party has become incredibly better - it is to the benefit of EVERYONE to get rid of rakeback.

Quite frankly, whether you call it rakeback or bonuses or whatever, it should go to the fish, not the pro's -the pro's are making money anyway.

I joined Party & Empire years ago, probably before rakeback existed or I knew it existed. Then I kept reading here about people boasting about how much rakeback they're getting and I thought this can't be good for the game and it can't last. David Ross was making pretty good money and he gets money on top of that? Why? It'll ruin the game quicker if you ask me.

The most important thing for poker is to keep the casual player coming and rakeback to the pro's was defeating that purpose.

As far as I'm concerned, the rakebackers and affiliates were a bunch of parasites sucking the lifeblood out of poker.

Even though I play 35 hours a week on Party, I was not given any bonus this month. But I had a pretty good month, so in spite of no bonus, I ain't going away, am I? I'd rather the bonus go to some losing player, because he's my bonus in the long run.

[Freudian]

[ QUOTE ]

I joined Party & Empire years ago, probably before rakeback existed or I knew it existed. Then I kept reading here about people boasting about how much rakeback they're getting and I thought this can't be good for the game and it can't last. David Ross was making pretty good money and he gets money on top of that? Why? It'll ruin the game quicker if you ask me.

[/ QUOTE ]

Ruin for who?

You seem to forget that rakeback not only goes to huge winners, it also goes to marginal losers (who end up breaking even or winning slightly because of rakeback). Furthermore it means a smaller amount of money goes from the poker room to non playing affiliates and instead a larger amount goes to actual players.

Now if you wanted to argue that Party should cancel all affiliate payments and use the money they save to lower the rake for everyone, I would agree it help. But that hardly is going to happen.

[primetime32]

[ QUOTE ]

The most important thing for poker is to keep the casual player coming and rakeback to the pro's was defeating that purpose.[ QUOTE ]


Please explain this one to me.

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I'd rather the bonus go to some losing player, because he's my bonus in the long run.

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Why can't there be fish and rakeback/bonuses at the same time? I play at a number of sites and the amount of fish in the pond is pretty high. They are high at the sites that offer rakeback and bonuses and they are just as high at a site like pokerstars which offers no rakeback.

Rakeback should merely be used as an incentive to keep players around.

[Dave D]

The MTT is usually my home, but I ventured out today for fun. I'm going to try to respond to OOO's main point.

I understand OOO's point about the "source" of rake being the fish, and that makes perfect sense. Everyone is paying rake, but the fish are basically providing it for the pros, the pros are using the fish's money to pay the rake. That's all well and good. You're also saying that if the pro/fish ratio becomes too tilted towards pros, Party makes less money because everyone plays tight and the people fueling the system (fish who deposit) all die off and stop depositing. This is all well and good, however...

1. You're talking about Party. You're telling me *the* (arguably) fishiest site on the internet has any forseeable problem with luring enough fish. If party is in *any* danger of a problem, then imagine what the situation is for the next tier of competition like stars. Now imagine what it must be like for full tilt and Bodog etc But those sites are only growing, I don't think this is a problem. I don't think party is anywhere *near* that kind of situation. They might be having issues with *growth*, but if you grow 5% one year, and 4% the next.... You're still growing...

2. A more subtle point. You're basically assuming that methods of attracting fish and pros must inherently be mutually exclusive. That is, you either cater to the fish, or the pros and party is choosing the fish. This is wrong for two reasons:

A. I consider myself a "pro", at least that I make money off the site. I have signed up around 5 friends. 1 was break even, 1 is a winning player (but only after about a year), and at least 1 is a HUGE loser. I know for a fact that he has stopped playing, and he lost around 400 in the system. I'm probably the "worst case scenario" for Party. I'm sure tons of pros attract losing players by telling their friends "it's so easy, I've made so much", and the friends lose a ton of money. So my point is, every player, winner or loser, has value as a means of attracting others. I have a friend who set himself up as an affiliate (doesn't pay any rakeback to people who sign up under him) where he basically signup bonus whores them, and gives that money to them to start. He tells me 90% of those people usually bust in a month and don't come back, and maybe 10% become producers for him. My friend is definatly a pro (he lives off online/BM), and has a HUGE network where he's probably signed up several hundred players who are friends of friends of friends. If you alienate my pro friend, you cut yourself off from literally hundreds of potential players.

B. I think the key is basically marketing. Basically, party needs to either implicitly or explicitly treat its two types of customers differently. I don't think going after the two types of players is neccessarily mutually exclusive. All party needs to do is secretly reward the better players, ie let the affiliates move skin accounts to party and keep the same deal they had before. Just don't tell the fish about it. Same as it was before. Just like BM casinos do it, they never advertise their poker rates, or that you might get a Comp for whatever, they just do it for their returning players. I'm sure there's plenty of people who go to a B&M and don't even know there's a poker rate, and pay the full rate. Oh well, sucks for them, like many things, if you do some research you get paid.

Or they could even do it explicitly, like I think they are, by offering these wierd points bonuses which are basically based on play. The second way is a little annoying because people like knowing x amount of work is going to get y reward, but whatever.

3. I think this whole argument is WAY WAY assuming that the world market for poker is even NEAR saturated. I *seriously* doubt that's true, and I think it's all about marketing right now, just like it was a year ago. Time magazine recently had an article where they cited a reputable source that said something like 25% of the population of the US had been to a casino LAST year. That number is probably lower than this year. That's the US ALONE, roughly 75 million people. Witness the explosion in real estate value in Las Vegas (though I don't wanna go too far and say it's all gambling related, whatever). Party has ONLY 9 million accounts. Nevermind the world market, especially in places where gambling isn't as restricted as it is in the US generally. I think there's still COLLOSSAL room for growth for party. So the issue becomes marketing to the general population. Cutting out rakeback I think is *nothing* compared to the gains the could still make in the world market. Yet possibly alienating members and making them leave, only hampers their ability to expand, see 2A

4. No one has talked about the competition with other sites. The bottom line is, not everyone (even "pros") knows/believes Party is the best site in terms of fishyness. Though I've never personally played on stars, everyone pretty much knows that Stars has party beat in just about everything, except the fish ratio. By alienating its base, all party does is give people reason to say "hey, i'm going to stars", or some other site. In the MTT forum, I'd guess around 1/3 of our posts are from other sites, namely stars. That's a lot. Anything that makes your base leave, only fuels other sites. I think when we're talking about online poker, and the pros, we are talking about a zero sum game. Yes I know what I said earlier about the market, but that really doesn't matter. The world computer market is huge too (not nearly as many people have computers as could), but Dell still activly tries to bring in new customers and still probably sees every customer lost to HP as a bad thing. Further, once you buy a Dell, and nothing bad happens, you're more likely to stay a Dell customer in the future. HUGE RADICAL CHANGES (like taking away rakeback) just makes your customers want to substitute what you're providing with someone else's almost as good product (quality of Dell computers aside). Party really shouldn't have given its users any reason to try to substitute its product.


So the bottom line is. If Party were smart, they would have allowed their affiliates to transfer existing accounts to Party, and maybe set up some sort of deal with the affilaites as far as their %. That way, they wouldn't have alienated their existing pros, and yet done the right thing for themselves busineswise (obviously) by getting more rake. The whole skin idea never really made sense to me, but whatever.

[thuja]

The big picture here is that Party Gaming is trying to take care of the Empire "problem". We (Empire's core customers) are just pawn's in the big picture.

Party gaming was evasive about its business relationship with Empire. In Party Gaming's 200 page IPO prospectus, Empire online isn't even mentioned even though the propectus dwells in great detail on a dozen other potential risks the company may face. The fact that Party Gaming was mute about its business relationship and obligations to Empire in the prospectus was enough to make me pass on purchasing Party Gaming shares.

The nature of Party Gaming's business relationship with Empire online became an issue with the investment community about a month ago when Party Gamings big competitor Sportsbetting PLC made a 780 million britsh pound takeover offer for Empire. The takeover soon fell apart when Sportsbetting realized how fragile Empire's position was with Party Gaming. Empire has an office staff of 16 and the server, cashier, website, & customer service are all done by Party Gaming. Sportsbetting was hoping to get all of Empire's customers to switch over to its Paradise Poker website. I'm sure they were also scared that Party Gaming would also try to lure Empire's customers back. Sportsbetting cancelled the takeover bid.

From a common sense perspective Party Gaming is the logical business partner for Empire. From a business perspective Sportsbettings aborted takeover of Empire was very bad for Party Gaming. First because it highlighted to the investment community the serious issues Party had with its skins. Secondly it was very bad because the price Sportsbeting offered for Empire was huge. If Party Gaming was to purchase Empire, Empire would want a simliar price.

Now this is where Party Gaming got down and dirty. On Saturday October 8, the had their shutdown and separated the skins. No one was told about this not even Empire. Party Gaming issued a press release on Saturday and said that they were upgrading the system, and that they where adding casino games (but not until 2006) and as a technical consequence, the skins had to be separated immediately.

OK now, name me one single public company that has issued a press release on a Saturday.

Co-incidentially, Empire had it's quarterly earings report scheduled for release to the market on Monday October 10. With the stock market focused on Empire, and the fact the Party Gaming had just cut it loose, Empire's stock was down 33%.

Also Party Gaming, reached out to the rakeback people and tried to put together deals to steal Empire's customers away over the weekend.

So, it doesn't take much to see that Party Gaming has put a gun to Empire's head. I'm certain Party Gaming's CEO is saying to Empire onlines CEO right now that Empire has 3 choices:
1) The can sell out to Party at Party's lowball price
2) or they can renegotiate the terms of their operating agreement such that Party gets the majority of Empire's revenues
3) or Party Gaming will win all of Empire Gaming's customers back through an aggresive and competitive rakeback program

As you can see, the big picture is all about Party Gaming's relationship with Empire. We, (Empire's customer's) are just the collateral damage in the fight.

Make no mistake the online pro's are very highly prized customers coverted not only by Party and Empire, but also the 100's of other online sites. Any poker website would kill to have the skins players as there own customers. This is illustrated by the 780 million british pounds Sportsbetting offer for Empire. If we are such suboptimal customers, why make such an offer?

I think that there is strenghth in numbers. We should seek out the best rakeback situation, the marketplace will offer us as a group. Think of it this was: Sportsbetting was willing to pay 780 million british pounds for the right to have us as it's customers. Why would they (or anyone else) not want to lure us away from Empire with a better rakeback deal, and save them the 780 million british pounds aquisition cost?