Online Poker Poker — 21 January 2010

I just ran across this article on Bluff about Tell Gaming offering stakes in their poker room for loyal players.

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arrow 3 Did We Learn Nothing From The Dotcom Boom?

Online poker site and casino www.tellgaming.com is giving players the chance to earn a stake in the company by simply playing on the site. Players can earn ‘ownership units’ in the company as they actively participate in games.

Players on Tellgaming.com already have a 20% share in the company and were rewarded with a share of a €30,000 dividend payment earlier this year. An extra 5% of equity is now on offer.

During the dotcom boom days this was usually the plan of last resort for sites that really didn’t have any sort of value proposition. I can’t even remember the names of the companies who tried this because they usually didn’t stick around long enough to seep into my memory.

I’m not predicting the collapse of online poker but it is telling that companies are beginning to resort to what has already failed in the past.

I’ve never really understood the end-game. So let’s say you keep giving out these ownership units. At some point you have to either stop because you’ll give up too much ownership in the company or you keep doing it and keep diluting the existing shares so you can issue new ones.

And I really don’t understand the business logic behind it. If the owners are confident that the site is going to grow and increase in value then why would you give up the equity so cheaply? I would rather give up 20% equity to an investor who’s going to give me a bunch of cash so I can keep expanding the business. Giving up your equity as a PR stunt or to lower your costs of a loyalty program seems like a rather poor business decision if you expect the asset to appreciate in value.

What’s next? A poker room that allows you to cash in your loyalty points for 50lb bags of dog food and will ship it to you anywhere in the world free?

Editor’s Note: It has been brought to my attention that the original version of this article appeared on eGaming Review’s site for which I think they should get some credit. Poker site to reward players with equity

 Did We Learn Nothing From The Dotcom Boom?

About

Bill Rini has been working in the online poker industry since 2004. He was a product manager for poker at Full Tilt and was the poker room manager at PartyPoker. Currently, Bill is the Head of Online Poker for WSOP.

 

Bill has been blogging about online poker since 2003 and is considered one of the leading authorities on the online poker industry.

 

“I like What Bill Rini said in his blog” – Doyle Brunson

 

“In other news, we had Bill Rini write an absolutely home run blog.” Daniel Negreanu

 

“Industry insider Bill Rini has one of the most popular blogs in poker, with thousands of subscribers and fans regularly coming back for his universally respected insight into the industry” – Barry Carter (News editor for PokerStrategy, Co-Author: The Mental Game of Poker)

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About Author

Bill Rini has been working in the online poker industry since 2004. He was a product manager for poker at Full Tilt and was the poker room manager at PartyPoker. Currently, Bill is the Head of Online Poker for WSOP.

 

Bill has been blogging about online poker since 2003 and is considered one of the leading authorities on the online poker industry.

 

“I like What Bill Rini said in his blog” – Doyle Brunson

 

“In other news, we had Bill Rini write an absolutely home run blog.” Daniel Negreanu

 

“Industry insider Bill Rini has one of the most popular blogs in poker, with thousands of subscribers and fans regularly coming back for his universally respected insight into the industry” – Barry Carter (News editor for PokerStrategy, Co-Author: The Mental Game of Poker)

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