How does Absolute stay in business?

[jrz1972]

I play .5/1 6-max. Every raked hand (0.25) gets me 0.10 in bonus money, but my share of that rake is only 0.04, so it would appear that Absolute loses about 0.06 on every raked hand, per player.

I understand that sometimes the rake is more than 0.25 and sometimes a hand gets raked but not enough to count toward the bonus, but still. Even when the rake reaches 0.50 (which requires a 10 BB pot), Absolute is STILL losing money on the hand for every bonus-player at the table.

Add in The Thing That Must Not Be Named, and I don't see how this is a sustainable business model.

The only thing I can come up with is that AP counts on a certain number of low-level players to eventually migrate to higher limits where they become profitable. If that's the case, it means that higher-limit players are subsidizing the play of low-limit players. I'm not sure how long that can go on.

Anybody have any insight into this? Obviously I am complaining about Absolute's marketing. It's just that it almost seems too good to be true.

[cmstaab]

I've wondered the same thing for a while... and they've offered the bonuses for so long that if they pulled the offer back they would lose a HUGE percentage of their player base.

[Uglyowl]

I have wondered the same thing myself. Is there anyone who plays there without a bonus. I think people with RB is less than 50% though.

The $.50/$1 and $1/$2 games are the games that are losers for them. All the others make up the losses at that level. I don't see that much though. Tourneys seem break even for them (less the freerolls are more losses)


Obviously they have a plan and there is something we are overlooking.

[Arnfinn Madsen]

I think they make a profit on ring games, they lose on the low limit and no limit tables but not very much and they make money from 2/4 and up. In addition their bonus is not very good for SNG's and tourneys, so I guess they cash there.

[Eder]

They get access to free $$ (deposits) to more than offset the couple hundred low limit bonus whores. Even depositing players money in short term money markets can be very lucrative. Currency markets can be even more lucrative. Absolute probably has about 8 - 10 mill available to screw around with interest free...wish I did!

[Synergistic Explosions]

Absolute is the exact opposite of Party. They are aggressively rebating their players most of the rake they pay, while Party is aggressively consuming as much of each players deposit as is humanly possible.

Just different business plans is all. One doesn't have the extreme greed built in.

[Uglyowl]

[ QUOTE ]
1 point will be awarded for each $1 of tournament buy-in fee.

[/ QUOTE ]

Is this for the entire cost to enter the tourney or just their fee.

Never played a tourney on Absolute yet so don't know.

[Arnfinn Madsen]

Just for the fee, so they basically give a 10% discount on tourney fees.

[SlantNGo]

There were rumors in the past that Absolute was built off a Ponzi scheme and offer the bonuses to pay off cashouts... Not that I believe it or anything. Personally, I think they're just operating under smaller margins and counting on player loyalty.

[SoftcoreRevolt]

One thing that surprises me about Absolute is that they release their bonii every 10 dollars. They'd stand to lose a lot less from low level fish who can't clear an entire bonus, but can clear half of it, and still have the same huge number of bonii.