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Casino Gambling Web News Story Deceiving For Online Casino Gamblers

Bill Rini — Mon, 10 Aug 2009 08:06:31 +0000

I know it may be hard for some of you to imagine but I’ve made a few mistakes. I’ll pause for a moment to allow some of you to come to grips with that or phone your therapist and work out what that means for you but I’ve said it and it’s out there.

Are we all better now? Ok, let’s continue . . .

Larry Rutherford at Casino Gambling Web doesn’t seem to be as willing to admit his errors. In a piece (and the choice of that word is intentional) he wrote on Casino Gambling Web titled “Full Tilt Online Poker Bonus Deceiving For Online Casino Gamblers” Mr Rutherford blasts Full Tilt Poker because he didn’t read the terms of the first time deposit bonus.

The site advertises a 100% match bonus on a first time deposit. That would leave many online players to assume that when they deposit $100, the casino would match that $100. This is where the deception of the site comes into play.

Actually, no. That is where his inexperience playing poker comes into play. On most poker sites a first time deposit bonus is either released incrementally as you hit certain milestones (like on Full Tilt Poker) or you have to complete the entire bonus to receive any part of it. Admittedly this is different than for online casinos which often comp you the money up front and then require that you give them so much turnover before any of it will be released to you. In fact, some poker sites even use a similar strategy to get low roller customers to come back to the site. They’ll deposit X dollars into your account and then you just have to play Y number of hands in order to release the money for withdrawal.

But the standard in the online poker industry, especially for first time deposit bonuses, is for the player to either earn off the matching portion incrementally or to completely earn it off before being released. The fact that the “Staff Editor” of a major gaming news site wouldn’t know that is somewhat scary. But even worse is that when he’s later informed that this is all in the terms and conditions when he signed up instead of investigating whether this is a fundamental difference between casino and poker offerings (which it is – and I’ll tell you why in a moment) he repeatedly calls Full Tilt “deceptive” and “deceiving.”

Now, Mr. Rutherford, should you read this, allow me to school you on why poker rooms and casinos offer different types of bonuses. When you play casino games you play against the house. That means if you lose your entire stake the casino still wins. Let’s look at the math:

100% sign up bonus up to $100 at a casino

Deposit = $100
Bonus = $100
Amount in your account $200

Since the casino has the house advantage in all games and you play all games against the house all they’re risking is that you’ll defy the odds and actually win. In which case they lose whatever you won plus the $100 they fronted you. But the odds are you will lose not only your $100 but the $100 they gave you. But since you’re losing it back to them, they’re risking $100 to make $100 in a game where they already have a huge edge.

Now, let’s look at how an online poker room operates. Online poker is played against other opponents. The house only takes a small rake collection as a service fee for providing the game. So if you lose $100 only a very small percentage of that might end up in the hands of the house. The rest is goes into the hands of other players. That’s why they can’t offer that type of bonus!

If they gave you the $100 bonus up front there would be nothing stopping players from simply dumping their money to another player after agreeing to split the winnings. It would be open season on online poker rooms.

But Mr. Rutherford isn’t content with just blaming his ignorance of online poker on Full Tilt Poker. He goes on:

If that was the only deception at the site, it may suffice, however, there was more to follow. Full Tilt claims to have twenty-four hour customer service. Upon e-mailing the customer service department to find out why the match bonus was not immediate, we received an automated response acknowledging the receipt of our question.

after a couple of hours and no response from a live agent that could help with the question, we proceeded to e-mail the site again, this time sending our question to a different department. Still, no response.

In fact, their twenty-four hour service actually turned into almost twenty-four hours before we received a response. The response was detailed, pointing out that in the terms and conditions of the sign up process, the confusing rules for receiving the sign-up bonus were listed.

For players that are looking to get into the world of online casinos, beware of sites such as Full Tilt Poker. Do the homework necessary and find the casino that truly gives a 100% match bonus with no strings attached upon signing up.

So the second deception was that they claim to have 24 hour support but don’t immediately respond with detailed resolution to his problem. Find me one casino of any size that does. He doesn’t state it in the article but most CS auto-responders say that they’ll attempt to resolve your issue in 24 hours so not only did Mr. Rutherford not pay attention to the terms of the deposit bonus but even after they responded within their standard turnaround time he labels them as being deceptive. A lot of very valid complaints can be lodged at the online gaming industry but this simply isn’t a case of the room doing anything wrong.

My favorite part is his last sentence:

For players that are looking to get into the world of online casinos, beware of sites such as Full Tilt Poker. Do the homework necessary and find the casino that truly gives a 100% match bonus with no strings attached upon signing up.

Yes, stay away from these shady operators like the second largest card room in the industry. Oh, and stay away from PokerStars the largest room in the industry because that’s how their first time deposit bonus works too. Oh, and iPoker’s skins all pretty much operate the same way too so stay away from the third largest operator. Oh, and Party offers the same thing so stay away from them too.

Wait . . . wouldn’t it just be easier to recognize the fact that online poker and online casinos have two different bonus schemes because they make money two entirely different ways?

I would hope that someone from Full Tilt reads this and has the legal department slap CGW’s wrist for putting this kind of stuff out there.

To deceive someone is to have the intent to mislead them. In this case, a casino player who is used to a different bonus system goes to Full Tilt and doesn’t read any of the terms and conditions of the bonus might find it confusing but there is nothing deceptive about it since they go to great lengths to explain how the deposit bonus works if one were to look. I mean, the link to the deposit bonus is above the fold, front and center, on the homepage. It’s not like they’re hiding the information.

Maybe the next post he writes for CGW is “Understanding Deposit Bonuses Before Sending Your Money to an Online Site You’ve Never Used Before.”

Photocred to greggoconnell

Update:

I normally don’t like to go back and edit posts because it distorts what information was available at that snapshot in time but here I am merely clarifying what was said earlier by posting a screen capture of the Full Tilt Poker homepage so people can see how damn easy it is to find out what the terms of the first time deposit bonus are.

In this photo it’s clear that the “100% bonus up to $600″ is a link and it’s highlighted in such a way that it actually invites people to click and learn more.

How to Become a Rakback Affiliate

Bill Rini — Tue, 30 Jun 2009 03:44:31 +0000

At the meta level there are really two major ways to get into the rakeback game:

1. Develop your own accounting system and go negotiate deals with all the major poker rooms

2. Use a pre-packaged backend solution like Poker Affiliate Solutions (PAS) and set up your own rakeback site.

Even though I have a lot of industry contacts and the technical skills to write my own backend, for Rakeback Report I went with partnering with Poker Affiliate Solutions. I’ve read a lot of good things about them in the poker affiliate circles and I have been very impressed with them.

But a large percentage of the readers of this blog are other poker bloggers or owners of smaller sites who might be interested in offering rakeback but don’t have the time, energy, or expertise to know how to go about it.

I guess the first step is to determine whether or not you actually want to offer poker rakeback. I think it’s an interesting alternative for some poker bloggers because as I wrote several years ago in a post called The Futility of Affiliate Programs for Poker Bloggers poker blogs really don’t convert well. Most of your readers are already die-hard poker players so slapping a banner ad up for a well-known poker room isn’t likely to get many clicks.

But offering rakeback is something that might convert for a lot of sites since their readers might click on a link to the same poker room if there is a rakeback offer involved.

Mind you, the payouts are much smaller for rakeback affiliates but the conversions are much higher. In case, you’re not sure how this works, allow me to explain. Let’s say ABC Poker is paying out affiliates 35% of the monthly gross revenue (MGR) of each player you refer. A rakeback affiliate simply offers to refund 32% or 33% of the rake to the player and keep the difference for himself.

And whereas a typical poker blog might get a signup every month or two (or even less frequent depending on your traffic) a rakeback offer might get 3 or 4 players signing up every week. And they’re less likely to be complete newbies which means you have less of a chance of the player going onto a site, stacking off their initial deposit in the first hand, and then never returning to the site. Players seeking out rakeback deals tend to play pretty frequently which means they become a source of steady revenue.

So how does one go about becoming a rakeback affiliate without the hassle of the do it yourself approach? Well one option is to piggy back on an existing rakeback affiliate. For instance, you can become a sub-affiliate at Rakeback Report simply by signing up for a rakeback account (you don’t need to actually play) and selecting the “Tell A Friend” menu item.

There you would be given an HTML link with a referral code that you could insert into any sort of advertising you wanted. Banner ads, emails, and obviously text on your site. You can even use the backend system to create a custom landing page if you so desire.

So what’s in it for you?

Well if the players you send generate between $0 and $14,999 in rake then you get a 2% cut of the MGR. Between $15,000 and $49,999 you get 3%. Over $50,000 you get 4%.

Obviously these amounts seem small in comparison to the 35% that you might get for referring a player directly but chances are you’re signing up a player who would have never signed up under a non-rakeback deal. So instead of looking at it as the difference between 4% and 35% a better way might be to compare 4% against 0%.

Even if you don’t want to offer it to everyone you can always sign up and create your links for friends. They still get the same high payouts except you get a piece of the action.

And everything is pretty much handled by PAS and Rakeback Report. Your referred players have a backend system where they can choose what rooms they want rakeback on and monitor their MGR. Payouts are handled by PAS so you don’t have to keep spreadsheets and ship money every month to your rakeback players. For the most part, it runs itself.

So if you’ve been thinking that you might want to start offering rakeback to readers of your blog/website but haven’t been sure how, simply go to Rakeback Report:

1. Sign up for a new account

2. Go to Tell A Friend and copy the links into any ads you want to run

It’s that easy!

Photocred to greggoconnell

Why Affiliates Will Always Trump Online Poker Rooms

Bill Rini — Tue, 05 May 2009 18:55:34 +0000

Before I got into the online poker industry I was always amazed at how much money poker rooms threw at affiliates. I thought they were stupid because most of the sites that were promoting them would have been happy to take a flat CPM deal if some site hadn’t been dumb enough to offer to give a flat rate referral or a lifetime cut of the MGR.

After having worked in the industry for several years I’ve come to the conclusion that online poker sites aren’t stupid. They just lack the internal framework to compete with affiliates.

Affiliates live or die by being good at what they do which is to convince people to come to their site and then to be able to direct those players to another site. In the beginning it was easy, you slapped a few ad banners on your site, created some content, and collected the cash.

But as the market became more and more competitive amongst the affiliates they had to get better and better at performing their job. That involved driving larger amounts of traffic to their sites and improving their conversion rates.

Obviously different affiliates have taken different paths on driving the traffic to their sites and most have begun investing in their own conversions via freerolls, rake races, and other methods designed to provide a unique and compelling reason for a player to click on that link and download a piece of poker software.

The one thing most successful affiliates have in common is that they’re better at their job than the poker rooms are. You would think that new signups being their lifeblood and the fact that they are grossly better funded than the affiliates that it wouldn’t be difficult for them to be better and more efficient than their affiliates but generally that isn’t the case.

The online poker sites have more or less turned into branding machines. Instead of concentrating on luring players in they blast out their branding message via as many media outlets as they can afford and then hope enough people will type in their URL into their browser or at least know the brand well enough to click on the affiliate banner on a poker affiliate site they may already be visiting.

I think the best way to illustrate this point is to cite just a few mistakes that online poker sites have made:

1. Not buying out 2+2 in the early days of online poker. Maybe someone approached MM and he didn’t want to sell or maybe nobody even asked him. Whatever the case 2+2 has blossomed into one of the most trafficked poker sites on the internet and even though it could use a big overhaul up in terms of monetizing traffic one can’t argue with the numbers.

2. Not buying out PokerNews or creating a well-funded competitor. I’ve heard rumors of PN being on or not on the auction block a few times over the years but they remain independent and bigger than ever which means anybody who balked at their price probably walked away from a bargain.

3. Not creating a poker coaching site. Granted, Full Tilt now has their poker academy but that was only after PokerStrategy.com became the most trafficked informational poker website on the internet.

And not only did the online poker sites not do any of the above they helped create these powerhouses. Not just from affiliate revenue but if you’re a decent sized affiliate and call up any major poker room and tell them you’ll throw a few hundred new signups their way if they host a $5,000 freeroll that’s only open to your players the online poker site can’t set up the tournament fast enough. In essence, the online poker sites picked up part of the marketing costs of acquiring the players they were paying the affiliates to acquire.

It’s not that the people at online poker sites are stupid. In fact, I’ve met some absolutely brilliant people in the industry. It’s that they’re always two steps behind.

Since Otis is busting my chops about Facebook and Twitter at the moment, let’s take social networking as an example.

Someone will create a successful poker related business model using Twitter. I’m sure of it. I’m equally sure that it won’t be an online poker room.

The reason why is that there will be some people within the online poker sites who are all over Twitter. They’ll be Twittering fools. And they’ll mention it to this or that executive who may or may not have even heard of Twitter and perhaps, just maybe, they’ll throw some token resource at it. Maybe someone will be authorized to tweet an hour or two a day. As a result the effort will be half-assed and so will the results which leads the poker room to believe that it’s a wasted effort.

On the other hand affiliates see Twitter as a possible source of driving more players and for them that means more possible sources of revenue. They’ll put more resources into than the online poker site and experiment around with models until they find something that works.

By the time Twitter starts becoming a big enough buzz word in the industry that CEO’s and other top level executives hear about it and start asking why nobody is doing anything about Twitter the affiliates will already dominate the space and the online poker rooms will do one or both of the following things:

1. Pay the affiliates a lot of money for the players that they’re pulling in from Twitter.

2. Attempt to start their own Twitter marketing channel and either do what the affiliates are currently doing but less effectively or they’ll start from scratch and repeat all of the mistakes the affiliates made long ago and have already learned from.

Again, I don’t say that because I think that the people who run online poker sites are stupid but my predictions are based on what how I’ve witnessed blogging, Facebook, and just about every other online phenomenon develop.

The problem is that most online poker sites throw their best and brightest at staying ahead of the competition on the known playing field. The unknown, or untested playing fields are mostly ignored.

Right now, my guesstimate would be that 90% of the online poker rooms have less than one full-time person devoted to social media. Many sites might have a Facebook page but it probably only gets a few hours of month devoted to it. Many sites have blogs these days but how many are nothing more than marketing channels where all they blog about is promotions, their own events, and bonuses? Many poker site blogs don’t even allow comments. How social is that?

Almost every time I’ve heard someone on the operator side of the industry discuss something like blogs, Facebook, or similar technologies I’ve heard the following phrase (or something like it) spoken, “We should do it because it would be good for SEO.”

Affiliates don’t start social media or blogging because it’s good for SEO. They do it because they know they can drive traffic with it. In order to drive traffic they need to create something compelling, sticky, and of value for the readers. Since they approach the challenge from a completely different objective they usually get radically different results. And take a guess who’s going to get better results; Let’s do it for the SEO or How can I make money off of this?

I wouldn’t even lay the blame at the feet of the poker rooms though. The industry is so new and evolving so rapidly that quality people are rare. There simply aren’t enough bright, creative, and business minded people to go around the industry. So if given the choice of throwing your best and brightest at untested technologies with unknown potential or throwing them at keeping you in the fight with your competition the ROI says to put them on keeping up with the competition.

On the other hand, successful affiliates operations are often are born out of some very bright, creative, and fanatical person putting all of his or her energies into untested technologies and making an idea work. They live, breath, sleep, and eat their idea until one day they wake up and they’re clocking six or seven figure checks every month (or they go broke).

A lot of this is hardwired into the culture of the poker rooms. Most of the poker passion in a company is devoted to the retention side of the business. Poker players understand poker players so they are put into roles like poker room management, retention promotions, VIP, CS, etc.

On the other hand, the acquisition side of the business is run by traditional marketing people who may or may not have any particular passion for the game of poker. That’s not to ding marketing people but they’re expertise is buying media, organizing campaigns, and branding. They don’t necessarily have or have to have a passion for the game.

In fact, Raphael Arnold, CEO of Netrefer said something very similar, “While most operators were recruiting general marketers, spending money and hoping for the best; the affiliate, spending their own money, were learning to market in creative and frugal ways, becoming an important part of the industry’s growth,” which is notable not only for it’s truth but for the fact that I think he broke my own record for run-on sentence of the year.

On the acquisition side it’s easier for the marketing guys to partner with affiliates who do understand the customers and who are willing to develop innovative business models than it is for them to come up with these ideas on their own. For them it involves a lot less risk if they simply buy the customers from the affiliates. Besides, most of them are coming from other industries where they are used to spending to get. You buy television. You buy print. You buy CPA. You buy CPC. Actually creating organic traffic or viral content is not really the specialty of most marketing people.

It’s very similar to something I keep hearing over and over again when I talk to poker room operators. They’re all complaining that PokerStars and Full Tilt are dumping so much money into this or that market that they’re being pushed out of markets where they used to dominate. And my answer is always the same “You better come up with a strategy to counter that because their money supply is endless and they’re going to keep spending until they’ve completely choked you out of the market.”

And the funny part is that let’s say that Full Tilt comes into Imagistan and starts buying up all the media there. As an affiliate for Full Tilt your job would, on paper, get more difficult because Full Tilt is recruiting players directly and cutting you out of the chain. Sure building the brand helps you but once people know who Full Tilt is they can type in fulltiltpoker.com as easily as they can click on a link on your site.

But the affiliates are thriving in these new markets. The more money the poker rooms spend the more money the affiliates make because the affiliates leverage the bigger trend in poker awareness instead of going for the easy kill conversions. Affiliates figure out how to get long-tail search results and push themselves up the SERPs so as more and more players get into poker and start searching for poker related stuff they get out there where the poker rooms aren’t.

At one of the SEO panels I attended this week one of the roundtable members, Bob Raines spoke about how Everest Poker targeted a German celebrity who hosted some poker thing in Germany and the how well that did for them. From what Bob said Everest had no relationship with this celebrity but they recognized that people would put his name and poker together in searches and they captured a lot of traffic.

Perhaps Everest and Bob Raines are an exception to the rule here but I can tell you that most poker rooms marketing departments wouldn’t even think about trying to monetize a celebrity who wasn’t signed to represent them.

I just tested this out but I did a search on “boris becker poker.” Boris Becker is obviously a well-known German tennis star but he’s also a poker player and PokerStars signed him as a representative. Although the PokerStars Blog comes up as the first result and PokerStars.tv comes in at fifth PokerStars doesn’t own another result in the top ten for that phrase. Pokerati ranks higher than PokerStars.tv!

A motivated affiliate or a poker team with an aggressive acquisitions strategy would try to rank all over the top ten for that. Who cares if he’s affiliated with PokerStars if you can slide in there and steal their thunder by ranking #1 or #2 for that term and forcing those searchers to your poker room instead of PokerStars? Let them pay for sponsorships while you feast off of their SEO laziness. What kind of coup would it be for Full Tilt to rank #1 or #2 for “boris becker poker” when PokerStars was paying to create the keyword phrase?

Most poker rooms don’t have a SEO strategy outside of the ultra-competitive keywords. They all slug it out and spend ridiculous sums trying to rank for terms like “online poker” while the affiliates are out there making millions off of ranking for keyword phrases like “best party bonus.”

I just did a search on “best party bonus” and PartyPoker isn’t even in the top 10 results. And that was the first phrase that I snapped off when I tried to come up with a phrase that people would actually search for but most poker rooms would never optimize for.

I could go on for pages listing similar examples but the point is that in the online poker space affiliates do it better and faster than the online poker sites can. Perhaps that will change at some point but at the moment most rooms are too focused on other parts of their business.

The bottom line is that in order for online poker rooms to remove affiliates from the value chain they will need to do it better than affiliates do. They’ll need to buy out the sites that are already doing it better than they are and hire brilliant, cutting-edge, people to run their online campaigns.

But most won’t do that. Maybe the Full Tilt’s and PokerStars have that kind of money but your average poker room is going to keep paying out affiliates to do what it should be doing because it’s economically a sounder proposition.

Eventually though that will become a problem; What’s that saying about never picking a fight with someone who buys ink by the barrel? In today’s world you should never compete with a company that buys pixels by the terabyte.

The whole value model will need to reevaluated. When non-public companies shift their focus from market share to profitability there will be a lot of affiliates who find themselves in the crosshairs of online poker rooms.

That doesn’t necessarily mean the poker rooms will be successful. I could buy 2+2 and drive it into the ground. Many of these affiliate sites need an independent management structure that allows them to be out there on the cutting edge. But fi they start buying the right properties and getting the right management in it will be very difficult to compete for all but the biggest affiliates.

Like I said from the beginning, poker rooms aren’t stupid. They just have their attention focused elsewhere at the moment.

Photocred goes to extranoise

The Online Poker Industry’s Love Hate Relationship With Rakeback

Bill Rini — Mon, 20 Apr 2009 12:01:31 +0000

Exclusive Report
Learn how you could make a living playing poker.

There’s probably no single topic that divides the online poker industry more than rakeback [what is rakeback?]. Seriously, in many companies rakeback is a dirty word. At one company I know it’s jokingly referred to as “The Unmentionable” by the poker staff because to even say the word rakeback generates a negative Pavlovian response within the organization.

Other sites publicly denounce rakeback but then offer promotions and/or bonuses that essentially amount to rakeback. They might call it value, or commission, or fee but it’s still rewarding players for generating rake.

And lastly you have the rooms that use rakeback aggressively to acquire and retain players. For them it’s a tool they use in order to compete against better-funded poker rooms that can buy up all the media in a market and shut them out of traditional marketing channels.

The affiliates are also in a similar battle over rakeback. Traditional affiliates detest rakeback. They spend a lot of money creating valuable content that they might not otherwise be able to produce if they had to give the lion’s share of their affiliate fees back to the players.

On the other end of the spectrum you have the rakeback affiliates who don’t mind working on slim margins because they can still make money on the sheer volume of players. Also most rakeback affiliates don’t create expensive content (tournament coverage, actual journalists, etc) so they operate with far less overhead than the traditional affiliates.

Who are we forgetting here? Oh yes, the players. The players are a little less divided. Either they know about rakeback and love it or they have no idea what it is and probably don’t even care.

Can’t we all just get along?

In reality, almost everyone has a valid argument. The problem is that the online poker industry hasn’t really grasped the fact that one size doesn’t fit all.

A rakeback affiliate and a traditional affiliate provide two completely different types of functions. A large poker news site is likely to have tons of content that rates highly in search engines and will attract newer players when they search for certain keywords or follow a link sent to them by a friend. Yes, hardcore poker players also use their content but most don’t click on the affiliate links.

But the rakeback affiliate is also providing a function. The rakeback affiliate is catering to a more sophisticated poker player. The rakeback affiliate aggregates valuable (higher raking) players and provides them with customer support, specialized promotions (rake races, etc), and serves as a single interface for the poker room.

So on one side you have the traditional affiliate who can send a large volume of players but the traditional affiliate normally doesn’t even know who they are nor do they tend to have any sort of ongoing relationship with them. On the other side you have the rakeback affiliate who sends fewer players but knows all of the players they send (to the degree that they have their contact info and pay them every month) and maintain an ongoing relationship with them.

Unfortunately, most poker rooms offer only one model of compensation. Send us players and we give you a cut of the rake.

And the poker rooms are stuck in the middle. They don’t want to anger their traditional affiliates by condoning rakeback but they don’t want to lose their best customers to competitors that do allow it.

And because there is no simple answer, poker rooms either take a hostile stance, shamelessly offer rakeback to anybody who asks, or try a middle ground that ends up being so convoluted that even David Sklansky can’t work out the math of how their system works.

So what’s the answer?

I’m not sure I have an answer. I have some thoughts but not necessarily an answer that will work across the board. It’s a difficult problem because you have to raise the switching cost for the players while still keeping the affiliates happy.

One of the other major problems comes out of the fact that most of the existing affiliate models originated from a different era and are outdated in today’s current landscape. The affiliate model was devised at a time when the US was essentially the only market, rakeback was unheard of, the poker player community was rather immature and unorganized, and most sites didn’t have the capital to conduct large media campaigns.

All of those parameters have changed since the inception of affiliate programs but the poker rooms have yet to evolve. If anything they find themselves being in the uncomfortable position of providing a commodity service.

With online poker rooms receiving anywhere from 20% – 50% of their new sign-ups from affiliates and the old 80/20 rule whereby a small percentage of affiliates send the majority of the traffic, the online poker sites really don’t have the leverage to change things on their own.

But by the same token, the traditional affiliates are going to have to come to grips with the fact that a player who they sent to XYZ Poker two years ago when he was a newbie to poker who is now 18 tabling small stakes games and raking $15,000 a month wants some of that rake back. If the affiliate doesn’t cut him a rakeback deal then he’ll quit playing on the site and go to one where a rakeback affiliate will give him a deal. So they can either have 5% of $15,000 or 100% of $0.

To be fair, many affiliates have seen the writing on the wall and are making just such a change to their business model. Many of the coaching sites and educational sites require that you link up your account with them with your account on the poker room so they can track your progress and pay you out bonuses and such. Some of those sites have either already implemented or have discussed offering incremental rakeback whereby players start off with zero rakeback and either as a function of time or MGR are offered a higher and higher percentage.

That does seem to be the model that makes the most sense as both an affiliate and the poker room spend most of their money trying to acquire players. Once the player is in the door the longer they remain a customer the more profitable they become.

So where does that leave blogs, news sites, and everybody else who doesn’t have a one on one relationship with their players?

Well, as I mentioned, the 80/20 (probably more like 90/10 in most cases) rule is in effect when it comes to affiliates. The overwhelming majority of affiliates simply don’t send enough players. From a business perspective it would make sense if they ended MGR deals for any affiliate not generating X number of signups per month and then putting in some stringent rules that took any incentives out of trying to scam the room on the CPA deals.

As for the upper 10% or 20%, I think the poker rooms should just buy them out. I know that sounds crazy but over the long run it would likely be cheaper than paying them out as affiliates. I mean, listen, I see a lot of these affiliates around Gibraltar, Malta, and at conferences and many of them are doing quite well. If there’s that much money in the value chain then as long as you can buy the company for a reasonable price then it’s a good investment.

Another alternative would be for the poker rooms to force a rakeback scheme on the traditional affiliates either by policy or via offering so many bonuses that went against MGR that the net effect was the same for the player and the affiliate.

I know some larger affiliates who read that might gasp a bit but as rakeback becomes more widespread within the poker world the players are going to force their hand eventually anyway. When player attrition rates (churn) start increasing most affiliates are going to have to make a choice between making up for that by pumping more new customers through the door or conceding that they have to split some of the profits with the players.

Well, technically, there’s another option which is for the affiliates to hit the poker rooms up for a larger percentage to compensate them for the higher churn rates but sooner or later they’ll reach a point where the poker rooms can’t pay them a large enough percentage to compensate them for the churn losses. Plus there’s the fact that the poker room will likely take note of the lifetime value of the players being sent and put their own throttle on how much they are willing to pay for similar caliber players.

Like I said earlier, there aren’t any easy answers. The industry is maturing and like it or not rakeback will likely be here with us for awhile. Love it or hate it players are going to increasingly demand rakeback. It should be interesting to see how the industry responds.

photocred to adam*b

Bonus Whoring vs. Getting a Paper Route

Bill Rini — Fri, 10 Jun 2005 19:57:15 +0000

Abulafia made some interesting observations in a post that was in response to some of my previous bonus whoring commentary. Specifically he says:

I’ve lost count of the amount of posts I’ve read of people multitabling to clear bonuses. Sitting down and baking in the glow of several screens on a Saturday morning to hit up some site for a monthly comp. And a large percentage seem to run close to breaking even. Sitting down for a morning og 8 table grind doesn’t strike me as a way to work on your game. And it sure as hell seems like a waste of a Saturday morning.

Wouldn’t a paper route be more profitable? It would sure as hell beat the hourly rate.

To test this theory out, I pulled an email from a promotion Paradise sent me in April for a 50% reload bonus, $50 max. Here’s the details of the offer:

Promotion Details: The Bonus Amount will be added to your Pending Bonus account where it will be held and automatically released to your cash account based on these easy requirements: For each raked game (minimum $0.25 rake) you play, you receive 1 point and at 100 points we move $10 from your Pending Bonus account to your cash account. You continue to collect points until you receive 100% of your Bonus money. Maximum bonus is $50. There are no deposit fees using VISA, MasterCard, NETeller or FirePay.

So, in order to earn a $50 bonus one would need to play 500 raked hands. Now, assuming that your game is at the level at which chasing a $50 bonus would put a nice little zing into your bankroll, we’ll assume that you only have the skill to play one table profitably. We’ll also assume that you get dealt 60 hands per hour. In fact, I think I’m being a little conservative here since most low limit games will see the river with multiple players which adds considerably more time to the total. But, let’s just go with 60 hands per hour for the sake of argument.

500 hands / 60 hands per hour = 8.3 hours of play to clear the bonus.

$50 bonus / 8.3 hours = $6.02 per hour.

According to the Department of Labor’s website, the minimum wage in California is $6.75 an hour and the US government minimum wage is $5.15.

At least in California, Abulafia’s contention that a paper route would be more profitable is actually pretty accurate (plus in sunny California you’re likely to get a nice tan and peddling your bike around every morning is highly likely to produce health benefits). Of course, this assumes that you break even and as we all know, in poker, there’s no guarantees of that.

I could go through the math for multi-tabeling but let’s just say that it doubles the win rate to $12. I’m pretty sure a unionized grocery clerk makes better than $12 an hour (and you have far less chance of getting rivered by a two outer). What about four tables? Well, if you can play four tables at X limit then you would be +EV working on moving up in limits over chasing bonuses anyway. Getting good at multi-table play for the purpose of chasing bonuses is like getting a degree in mathematics so you can calculate the correct change faster in your job as a street vendor.

What about the people who actually can beat a particular limit? Well, first off, much like Abulafia’s post confirms, my personal observation is that most of the blog and message board posts I’ve seen indicate that a significant percentage of the folks doing the bonus whoring are break-even players. Those that are better than break-even players need to look at the +/- EV considerations that I mentioned in this post.

And just because it seems like this needs to be a disclaimer I put on every post on this topic . . . taking advantage of a bonus isn’t the same as bonus whoring. Whenever the sites I play at offer bonuses I throw a few dollars in and try to get the bonus since I’m going to be playing there anyway and I’m not changing anything about the games I play or how many hands I’m playing. Bonus whoring is skipping around from site to site chasing bonuses. The site that slammed me recently, Bonuswhores.com defines a bonus whore as:

“A Bonus Whore is someone who takes maximum advantage of the free money that poker sites will offer you for action at their site.”

Despite how BonusWhores.com defines it, the money isn’t free (the first rule of economics is there’s no such thing as a free lunch). Players make tradeoffs chasing bonuses. As a better than breakeven player taking advantage of a bonus at a site I already play at, I’m giving up interest income on my money and accepting the risk that this offshore company I’ve just sent $1000 or $2000 to isn’t going to go belly-up tomorrow and take all my money. I weigh those tradeoffs and decide whether or not I’m making a + or – EV choice. Bonus whoring, on the other hand, is unconcerned with whether or not the choice is + or – EV. The fact that bagging groceries at the local supermarket has a higher EV than the Paradise $50 reload isn’t a consideration for the bonus whore. They view it as free money and will go Neteller funds over to Paradise and crank out their 500 hands and move on to the next site offering a bonus.

In a way, it shouldn’t be surprising to anyone that most bonus whores are break-even players (or worse). Bonus whoring is a results focused activity and anybody who knows anything about poker can tell you that being results oriented is a major flaw in any poker player.

It’s All About Class

Bill Rini — Wed, 18 May 2005 04:10:19 +0000

Last week I made a tongue-in-cheek comment about my post regarding bonus whoring being the cause of the Empire crackdown.

It seems my recent post on bonus whoring has set off a industry-wide chain of events resulting in many players being booted from online poker sites. Ok, maybe I’ve got delusions of grandeur (actually, I’m quite sure of it). Anyway, it looks like Empire and UB have sparked widespread panic in the online poker world by cutting off people who are generating negative rake. Don’t get me wrong here but . . . GOOD!

Well, it appears my blasphamy didn’t go unnoticed (tip of the hat goes to one of my new favorite bloggers, asia K). Detective Grinder posted that I tipped off Empire. Yes, Empire was totally unaware of this whole bonus whoring thing until I spilled the beans. I’m such a jerk! Of course, my post was a tad more subtle than, say, being a regular on a site called BONUSWHORES.COM! Empire would have never figured it out if it hadn’t been for that pesky blogger. :-)

What made it even better were the responses. Oh, I can’t do them true justice by paraphrasing so I’ll quote them directly:

steve_bev writes:

Well, then, I hope he gets cancer.

Don’t hold back, man! Let it out.

OK, but seriously, it’s hard to believe that chasing bonuses loses the sites that much money. Unless I have a HUGE day at the tables, my PT stats show I’m getting just about the rake I’m putting in. So they’re making money on the other nine guys feeding the rake while I’m there. And the money I’m winning comes from the other players, not the site (unless Party is employing Props who’ve only read the first chapter of Hellmuth’s book).

Ahhh, the fallacy that if I’m the only one doing it, it must all even out. steve_bev, you model of compassion, what if the other 9 guys at the table are all bonus whores too? Kind of ruins your logic (and I use the term loosely here), doesn’t it?

Also, it seems that you’re admitting you can’t do better than break even? Spend less time jumping sites and more time learning the damn game!!!!! Wait, don’t do that. What’s your Party screen name?

Plus, eliminating the bonuses would destroy some of these sites. His own blog entry says it’s not about site loyalty when it comes to bonuses, to which I say–”Exactly!” I’ve got 20 online poker sites on my hard drive, and I give business to all of them. Cut out the bonuses and what will I do? Stick to one or two of them.

I guess the true tragedy here is that steve_bev doesn’t even realize he’s making the opposite case of the one he’s attempting to make. If you have 20 online poker sites on your hard drive and eliminating bonuses forces you to only play one or two, won’t those one or two be really happy because instead of losing money on you they’ll be making money on you? It’s not like the sites losing money are going to weep that you are no longer allowing them to lose money on you.

So the other 18 places I play every month will lose business… how does he think this helps online poker? What will happen is the whole industry will converge even more–there will be the Party Skins, Crypto Skins, and not much else… the little guys will just buy each other out to survive as a third minor skin unless they’re swallowed up by a bigger one. But without offering bonuses and encouraging play, their player membership will dry up.

Yes, oh master of the twisted logic, they will lose your money losing business! So, is the logic that they should lose money on a larger base of customers rather than make money on a smaller one? I’m gonna take a wild guess they don’t allow you to operate the register down where you work.

No, what will happen is that bonus whores will get kicked off sites one by one and be forced to play at one or two sites where they haven’t been kicked out of where the house will actually be earning a profit on your play. The market won’t dry up because they won’t stop giving out new player bonuses. They’ll just close the accounts of people who bonus whore. New people will keep coming and bonus whores will be kept in check.

Meanwhile, looks like I better stockpile as many Absolute bonuses as I can, and I guess I better hit up the Games Grid 5k…. just so I can go the next year without a reload bonus if it comes to that.

Of course, learning to play the game well enough that you don’t need bonuses to keep playing doesn’t seem to have crossed your mind. Can’t say I’m surprised though by the illogical thought processes displayed in just one post.

Here’s a sample of what the other “nice” folks had to say:

What a pompous stupid fucking idiot.

I’m sorry Pauly, I may replace your Jacques Cousteau of poker bloggers quote with the one above as the tagline for the site. I think it rolls off the tongue a lot better :-)

Did you see his picture on his blog?? What a damn tool. Are you snorkeling you fuckin idiot?

No, it’s scuba diving you dolt. A snorkel is a short open ended hose. A scuba regulator is a mechanical breathing device used to supply compressed air at ambient pressure while submerged under water.

Some are clueless blogging douche bags playing $5/10 and $10/20 – which is why I will bonus whore until I can withstand the variance required to take all of douche bag’s money.

I highly doubt you’ll ever make it to that level but I can’t wait for the day when you get the cahones to try.

I know the types of folks who are likely to make more quotes like the ones above aren’t likely to make it this far into the post but I don’t think bonus whoring is evil. Other things I believe:

I believe that many people use bonuses as a crutch for not being able to play worth a damn.

I believe that people who have 20 poker sites on their machine are taking advantage of the system and shouldn’t be surprised that the industry has finally begun to crack down on them.

I believe that stopping the abuses is in the best long-term interests of the online poker rooms.

I believe that if poker rooms quit chasing new users via weekly bonuses long enough to look at where their money is coming from they’ll start trying to increase customer loyalty with high MGR players by offering rakeback [what is rakeback?] or other programs.

I believe that if someone saying bonus whoring is -EV upsets you so much you wish cancer on them, you’re a sad and bitter person.

Peace!

The Wisdom of Bonus Whoring

Bill Rini — Tue, 03 May 2005 14:41:30 +0000

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One of the common topics you’ll see mentioned in the poker blogosphere is bonus whoring. Of course, bonus whoring is the act of playing on a particular site in order to take advantage of a reload or some other type of promotional bonus. Many people chase bonuses from site to site and even include bonuses in their monthly win/lose figures. The more I’ve thought about it though, the more I’m beginning to question the wisdom of bonus whoring.

At the micro-limits the benefit if substantial. Someone with a $100 bankroll who deposits an additional $1000 solely to get a 10% reload bonus would double their bankroll (assuming they withdraw the $1000 after they clear the bonus). A player who plays $5/$10 and deposits an additional $1000 into his $3000 bankroll solely to get a 10% bonus would only increase his bankroll by 3.3%.

For someone playing .05/.10 the game selection options are fairly equal across all sites since the lack of skilled competition at that level is fairly normal. The micro-limit player is giving up very little EV by playing at one site vs. another. At higher limits this EV trade-off can be substantial. If site A has 10 games spread at a particular level with a fairly good mix of good and bad players one is +EV over playing at site B which only spreads three games at the same limit with a much tougher group of opponents.

One common bonus whoring tactic is to play limits lower than the person’s normal game. Say for instance I normally play $5/$10 and I sign up at FullTilt with $600 to get the 100% new signup bonus. Six hundred is far too small to play $5/$10 so I drop down to $1/$2 or $2/$4 in order to play lots of hands and clear the bonus. Let’s assume it takes 10,000 hands to fully clear the FullTilt bonus. Here’s the math:

10,000 hands winning at a rate of 2BB per 100 hands

@ $5/$10 total winnings = $2000
@ $2/$4 total winnings = $800
@ $1/$2 total winnings = $400

Even if you only jump down from your normal $5/$10 game to $2/$4 you give up $1200 to make $600. Now one might argue that someone making 2BB per 100 hands at $5/$10 should be able to smash a $2/$4 game for more than 2BB per 100 hands but by how much more? 2.5BB? 3BB? Even at 3BB per 100 hands your 10,0000 hands nets you $1800 including the bonus which still leaves you down $200 vs. just playing your normal $5/$10 game.

Of course, you could always deposit a proper bankroll for your limit at each site but it would seem that if you were a $5/$10 player and had $3000+ deposited at 2 or 3 different sites you would be much better off playing $10/$20 or $15/$30 than you would be chasing $100 and $200 reload bonuses. There’s also the issue to consider that you are constantly playing against weaker opponents which does nothing to improve your game.

The ultimate justification will probably come from those who choose to move their entire bankroll between sites. But even here, you’re tossing months of PokerTracker data out the window in order to chase a relatively small bonus amount. One could make that case that you might make more knowing your opponents better than you would from the bonus given a sufficiently high enough limit. It’s probably the most compelling argument for bonus whoring but when combined with the need to constantly move one’s funds from site to site and the downtime between moves, I would personally find it to be a bigger pain than it’s worth.

All in all, I’m pretty sure that the only benefits of bonus whoring are:

1. You have a very small bankroll and play micro-limit poker making the bonuses a substantial percentage increase in your bankroll.

2. You’re adding additional funds to an existing account where you regularly play.

3. You are changing your site of choice on a permanent or semi-permanent basis.

Other than that, it’s probably -EV. If anyone has a pro-bonus whoring argument I haven’t considered, please leave a comment as I would love to be proved wrong on this one.

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