An Analysis of Different Poker Rake Distribution Systems by Jonas Odman
Poster: SySAdmin
Posted on September 13, 2010 at 6:07:01 AM
An Analysis of Different Poker Rake Distribution Systems by Jonas Odman
LONDON, September 13, 2010-- When Bodog Network presented the concept of a new rake distribution
system last year there was enormous debate and, inevitably, flattering
imitation. But as they say 'the proof is in the pudding' and we can now
assert that we are delivering on our promises to players, affiliates and,
next year, to other operators.
As we hoped affiliates with a high proportion of net depositing players
now earn more money from their revenue share deals than before and the
all-important 'leisure' player is also much better supported.
Ongame Network, iPoker Network, and Microgaming Network have systems
designed to achieve the same thing but in different ways, and in this article
I will give my view on the strengths and weaknesses of the different systems.
Most agree that the old way of splitting the revenue between operators
was skewed, and operators/affiliates bringing in net depositing players were
not rewarded enough. The root of the problem was the way rake was assigned to
players in the back-end, and that is where Bodog Network has addressed the
problem. Bodog Network is the only poker network which has stopped splitting
the revenue per hand. Instead, at the end of each business day, Bodog Network
uses a proprietary algorithm to split the revenue which rewards net
depositing players. And unlike all competitors' models, the Bodog Network
model works for all players from day one.
Ongame Network call their system Essence. Based on the players' results
and playing style during the last 90 days, players are assigned a
coefficient. The rake is split per hand, just like the old system, but the
coefficient is used to correct the flaws of the old system. A player's share
of the rake will depend on both his coefficient and his opponents'
coefficient in that hand. This is the second best rake distribution system in
the industry but there are some obvious problems with it. Firstly, it takes
90 days before the system starts working, so new winning players will be
assigned much more revenue than old winning players. Secondly, we know that
50 % of the players never make a second deposit-these players will not stay
long enough for their operators to be fully rewarded for bringing them in.
Thirdly, the system can and will be abused-by creating a new account on the
network every 90 days, winning players with under the table rakeback deals
can sustain too big a value for their operators/affiliates.
Microgaming Network and iPoker Network have a blunt system where
operators with too many winning players are fined each month. The networks
are basically keeping a rake distribution formula they know is wrong and then
punish operators who benefit too much from it. This creates big problems for
operators who get fined, because it is impossible for them to then split that
cost between the operator's affiliates with revenue share deals. Some
operators have reacted by blocking winning players which is a natural and
understandable reaction but at the same time bad for the networks'
reputation. Why would anyone want to play on a poker site or network where
winners get blocked?
All systems, including Bodog Network's, have in common that they lack
transparency. However, from an affiliate's or an operator's perspective, the
old systems were not that transparent either. Yes, players with 1) hand
trackers and 2) knowledge of how the network split the rake between operators
could calculate their share of the rake (and hence their rakeback), and now
all networks are removing that transparency. Here it is important to remember
that the rake distribution models were only meant to regulate the business
relationship between a poker network and an operator, as well as an operator
and an affiliate with revenue share deals. Rakeback deals were just an
unwanted consequence which is now being dealt with.
Net depositing players are the bread and butter for a poker network, and
it is a good thing for online poker that poker networks are starting to
acknowledge that. This will lead to more healthy poker ecosystems and in the
long run all players will benefit from this.
Jonas is the Vice President of Bodog Network
(http://www.bodognetwork.com)
Ed Pownall, ed@bodogbrand.com, +44-7825-064776
Source: BodogNetwork.com
Ed Pownall, ed@bodogbrand.com, +44-7825-064776
LONDON, September 13, 2010-- When Bodog Network presented the concept of a new rake distribution
system last year there was enormous debate and, inevitably, flattering
imitation. But as they say 'the proof is in the pudding' and we can now
assert that we are delivering on our promises to players, affiliates and,
next year, to other operators.
As we hoped affiliates with a high proportion of net depositing players
now earn more money from their revenue share deals than before and the
all-important 'leisure' player is also much better supported.
Ongame Network, iPoker Network, and Microgaming Network have systems
designed to achieve the same thing but in different ways, and in this article
I will give my view on the strengths and weaknesses of the different systems.
Most agree that the old way of splitting the revenue between operators
was skewed, and operators/affiliates bringing in net depositing players were
not rewarded enough. The root of the problem was the way rake was assigned to
players in the back-end, and that is where Bodog Network has addressed the
problem. Bodog Network is the only poker network which has stopped splitting
the revenue per hand. Instead, at the end of each business day, Bodog Network
uses a proprietary algorithm to split the revenue which rewards net
depositing players. And unlike all competitors' models, the Bodog Network
model works for all players from day one.
Ongame Network call their system Essence. Based on the players' results
and playing style during the last 90 days, players are assigned a
coefficient. The rake is split per hand, just like the old system, but the
coefficient is used to correct the flaws of the old system. A player's share
of the rake will depend on both his coefficient and his opponents'
coefficient in that hand. This is the second best rake distribution system in
the industry but there are some obvious problems with it. Firstly, it takes
90 days before the system starts working, so new winning players will be
assigned much more revenue than old winning players. Secondly, we know that
50 % of the players never make a second deposit-these players will not stay
long enough for their operators to be fully rewarded for bringing them in.
Thirdly, the system can and will be abused-by creating a new account on the
network every 90 days, winning players with under the table rakeback deals
can sustain too big a value for their operators/affiliates.
Microgaming Network and iPoker Network have a blunt system where
operators with too many winning players are fined each month. The networks
are basically keeping a rake distribution formula they know is wrong and then
punish operators who benefit too much from it. This creates big problems for
operators who get fined, because it is impossible for them to then split that
cost between the operator's affiliates with revenue share deals. Some
operators have reacted by blocking winning players which is a natural and
understandable reaction but at the same time bad for the networks'
reputation. Why would anyone want to play on a poker site or network where
winners get blocked?
All systems, including Bodog Network's, have in common that they lack
transparency. However, from an affiliate's or an operator's perspective, the
old systems were not that transparent either. Yes, players with 1) hand
trackers and 2) knowledge of how the network split the rake between operators
could calculate their share of the rake (and hence their rakeback), and now
all networks are removing that transparency. Here it is important to remember
that the rake distribution models were only meant to regulate the business
relationship between a poker network and an operator, as well as an operator
and an affiliate with revenue share deals. Rakeback deals were just an
unwanted consequence which is now being dealt with.
Net depositing players are the bread and butter for a poker network, and
it is a good thing for online poker that poker networks are starting to
acknowledge that. This will lead to more healthy poker ecosystems and in the
long run all players will benefit from this.
Jonas is the Vice President of Bodog Network
(http://www.bodognetwork.com)
Ed Pownall, ed@bodogbrand.com, +44-7825-064776
Source: BodogNetwork.com
Ed Pownall, ed@bodogbrand.com, +44-7825-064776