I just ran across this article on Bluff about Tell Gaming offering stakes in their poker room for loyal players.
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
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Hi, my name is Bill Rini and this is my poker blog. I've been blogging about poker and the poker industry since around 2003-ish. Like most people I started out playing poker as entertainment in home games whenever we wanted to sit around and smoke cigars, drink beer, and eat pizza, and needed a good excuse. I started playing online shortly after the first online card rooms opened and it wasn't long before I was playing 20, 30, or even 40 hours a week or more. One day I received a phone call about a program manager position at Tiltware which was the company that consulted to Full Tilt Poker on software development and marketing. After Tiltware I spent about 2.5 years working at Party Poker where I was the poker room manager.
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