Bill's Poker Blog

Weeding Out The Weak

Bill Rini — Thu, 02 Feb 2012 05:35:02 +0000

You would think that by this stage in the evolution in the online poker industry people like this would be unable to find jobs. Sadly, they’re still out there. And they’re still spamming poker websites with crap like this.

Subject: business proposal

Message Body:
HI PARTNER,
DO YOU KNOW XXXXXXX NETWORK?

XXXXXX IS ONE OF MORE IMPORTANT POKER NETWORK IN THE WORLD, WE HAVE MORE THAN 100 SKIN AFFILIATE ALL OVER EUROPE AND THOUSANDS OF PLAYERS ON LINE, BUT OUR REAL STRENGTH ARE VERY HIGH COMMISSIONS TO OUR AFFILIATES AND MANY TOURNAMENTS DAILY….

IF YOU WANT TO WORK WITH U.S. WITH A YOUR PERSONAL WEBSITE (SKIN) OR AS A SIMPLE AGENT, CONTACT U.S. WITH MAIL OR WITH SKYPE (XXXXXXXXX).

WE WILL FIND THE RIGHT SOLUTION FOR YOU!

Marketing Office
XXXXXXXXXX
Malta

I was going to do my usual deconstruction of this Epic FAIL but, dammit, the FAIL speaks for itself. Who writes “us” as “U.S.”?

Trying to Unsubscribe From Zynga Email Alerts

Bill Rini — Wed, 01 Feb 2012 21:43:01 +0000

I’m not sure why I’ve recently started to get a ton of Zynga emails telling me my friends are playing the latest and greatest Zynga game and want to invite me to play too. Regardless of the reason, I was tired of getting spammed so I clicked on the Unsubscribe option at the bottom of one of the emails. Below are the options on the webpage the link sent me to.

I’m at a total loss as to what the differences are between the options.

I’d like to unsubscribe from Zynga emails.

Yes, I would like to unsubscribe from all Zynga emails.

I’d like to unsubscribe from ALL Zynga emails.

Wait, what the hell is the difference between unsubscribing from Zynga emails and unsubscribing from ALL Zynga emails? Isn’t that the same thing? Are there Zynga emails and then some sort of other form of Zynga emails?

I’d like to unsubscribe from ALL Zynga emails. I do not want to receive emails from any Zynga game I play or any new Zynga game.

WTF?!?! Okay, the first sentence is the same as the option above it but what the heck does that second sentence mean? So are there Zynga emails, ALL Zynga emails, Zynga emails from games I play, and new Zynga game emails?

How much does anyone want to bet that no matter what option you select, Zynga will come up with a new category of emails to send you that somehow isn’t covered by any of the three above? Sort of like, “Hey, we know you said you didn’t want to receive any sort of communication from us under any circumstances but . . .”

ANY2LDO

Bill Rini — Tue, 31 Jan 2012 08:40:50 +0000

Saw this outside a shopping mall a few months ago. Finally got around to downloading the pics off my iPhone :-)

The Death of Poker Media?

Bill Rini — Tue, 31 Jan 2012 06:33:17 +0000

I swung by Commerce last weekend to get in a little Omaha and, as is my habit, I picked up copies of CardPlayer and PokerPlayer magazines which are always available in the casino. It’s a habit that goes back for nearly as long as I’ve played live poker in the local Los Angeles poker rooms.

When I was a beginning player I loved reading the strategy articles. I always enjoyed Roy Cooke and the other authors handing over little tidbits of advice on how to improve your poker game.

After I got involved in the online poker industry, I started to pick up the magazines to see who was advertising what promotions. They became more like industry or competitor research. I still found the articles interesting but poker on the internet had exploded by that time and there was more poker strategy articles available than one human being could ever possibly consume.

As I picked up the most recent editions of these two great poker publications I noticed they seemed a tad light. Very light.

Of course, light is relative. The last time I was a semi-regular in the LA card rooms was back in 2006 before I left for Gibraltar. Back then a copy of CardPlayer magazine was pretty hefty. How hefty, I don’t know because I never really took the time to inventory the magazine but I remember it being thick enough that it was too big to fold up or easily slip into your pocket.

That’s not the case today. The Jan 25, 2012 (Vol 25/No 2) edition of CardPlayer that I was holding was a mere 68 pages (including front and back covers). I was able to fold it over twice and put it in my jacket breast pocket.

It got me curious so I sat down and really looked at what was in these 68 pages.

Front Cover: 1 page
Masthead: 1 page
TOC: 1 page
Advertising Index: 1 page
Tourney Schedule: 5.5 pages
Advertising: 28 pages
Content: 30.5 pages

Only four online poker rooms had ads in CardPlayer; Lock Poker, Poker Host, America’s Poker, and Carbon Poker. CardPlayer had a full-page ad for their own free poker site but I don’t really count that since it’s a house ad. In total, seven pages were purchased by online poker sites.

Ads for land based casinos made up 19 full pages.

The remaining two pages consisted of smaller ads for things like CardPlayer Cruises, CP Poker School, Kardwell playing cards, Poker Media Consulting, etc.

Before I go any further I want to make it very clear that I am not singling out CardPlayer. As I browse around online poker news sites I notice a scarcity of any sort of advertising. It’s an industry-wide issue.

Part of the problem is that many poker media outlets got too fat on affiliate fees and placement fees. The amount of money online poker sites were willing to shell out for premium placement of their affiliate ads on the biggest poker media sites (both print and online) simply couldn’t and can’t be matched by any other sort of advertiser.

Many print magazines just kept adding pages and pages to their magazines in order to accommodate all of the people who wanted to advertise. Online sites sold out their inventory and then began charging poker sites an insertion or placement fee for increased exposure on their site.

This left little room for any sort of diversification of advertising income streams. In other words, GM, Coca Cola, Budweiser, and any other non-poker related advertiser were priced out of the market. When Black Friday hit there were no unaffected advertisers on the poker media customer list. All their bets were on online poker.

Granted, selling online poker to Corporate America was never an easy task. Not only were they priced out of the market but there is/was the issue of associating their brands with something that was, at best, morally objectionable and, at worst, blatantly illegal.

But that raises the issue of cause and effect. Was Corporate America scared away from associating their brands with poker or were they scared away from associating their brands with poker media that closely associated itself with online poker?

One could make the argument that poker is already somewhat acceptable to Corporate America. ESPN has an entire section dedicated to poker. Many newspapers carry syndicated poker content. They don’t give this exposure to poker out of the kindness of their hearts. They do it because, in theory, they are able to make money from it. Some advertiser is buying an ad on that syndicated column which makes it, in theory, profitable for them to pay the author for the content.

In some ways it reminds me of the dotcom crash. I remember when Yahoo was commanding super-premiums just to get your ad on their website. And just a few years later their sales dropped like a rock wen the dotcoms crashed.

Was it because nobody was advertising online? Ehrm, well, sort of. The problem was that the stupid dotcoms, flush with investor cash, stopped outbidding each other for prime Yahoo real estate when the money dried up. Since that was the only type of business Yahoo had been accustomed to, their sales reps were unaware that the phones dialed out as well as in. Their sales reps had never courted customers before. They were order takers.

The dotcom crash hit them hard because they weren’t organizationally structured to go out, hat in hand, begging for business. Likewise, I think the poker world needs to wake up to the fact that ads aren’t going to sell themselves. If the phone isn’t ringing the sales reps need to be hitting the phones and the pavement selling the ad space.

But are any of them doing that? Not from what I can see. I visited several of the largest online poker news sites and they’re all running ads for online poker sites. Some, even though I’m accessing the site from the US, are running ads for sites that aren’t even available to US players. One news site, which shall remain nameless, still has links to Full Tilt, UB, and Absolute room reviews in their footer (in their defense, they link to 404, page not found, pages).

I find it difficult to believe that this ad space can’t be sold to non-poker related businesses. The demographic of poker players is a highly coveted demographic for advertisers.

Or has the poker media yet to come to terms with the fact that the days of easy cash are over? Are they holding on, waiting for US legalization, hoping to command those outrageous premiums again? Have they burned their bridges to the legitimate world so badly nobody in Corporate America wants to touch them?

Whatever the answer, the one thing I do know, is the market weeds out those that fail to adapt. There are plenty of flamed out dotcoms that could have survived if they would have read the writing on the wall. Now all we can do is sit back and see who is paying attention to the winds of change and who is doubling down on their bets.

Guaranteed Solution To Stop Sharks From Eating Sports Book Fish

Bill Rini — Mon, 30 Jan 2012 18:11:34 +0000

Don’t offer poker!!!

Really. It’s that simple.

Most sports books offer poker to their customers as a way to keep players from discovering other poker sites. They understand the tendency for there to be cross-over players from sports betting to poker and they’ve attempted to keep their sports book players from wandering off to other sites for their poker playing.

That’s all fine and dandy but there’s an attitude in the industry that the sports book owns that customer or at least that customer’s betting action, which is an incorrect assumption. It’s sort of like your local cable company selling you bundled internet, cable television, and phone and then getting upset when you start canceling your premium cable channels because you’re spending too much time on the internet to watch as much television as you used to.

Rather than improving their cable channel lineup or providing you extra value, now the cable company wants to restrict your use of the internet in the hopes that you’ll spend more time watching television and move back up to your old package. They call their new internet offering, Enhanced Internet, and claim they are removing the internet’s clutter out of your way. Of course, Enhanced Internet involves blocking YouTube, Facebook, and downloading of movies and music.

That’s basically what’s happening right now with sports book customers. They’re being sold a bundle of gambling products but the sports book wants to control how and where the players lose their money and direct them to the products where they have the highest profit margin. This is an understandable business strategy but it’s not exactly honest when they say the changes are for the benefit of the player.

If the situation were reversed and the sports book’s customers were the sharks gobbling up the fish and then turning around and donking off their poker winnings in the sports book, there isn’t a single sports book that would be complaining about how unfair the game is. Not one.

I mean, you never hear sports books and/or online casinos lowering their sports or casino edges to help keep their customers gambling longer, do you? Do they handicap sports bets to make them more fair for customers who are bad at sports betting? Are there any casinos that will lower the house edge in their games in order to keep players gambling?

The problem with poker and sports books and casinos is that they’re two entirely different types of business. Yes, they’re all considered gambling, but games you play against the house and games like poker where you wager against other players are like night and day when it comes to how the room makes money.

Unfortunately, sports book operators think like sports book operators and casino operators think like casino operators. Neither thinks like a poker room operator.

That’s why I proposed that sports books and casinos should just get out of the poker room business unless they’re going to run their poker room like a poker room.

You can’t run a poker room with the same mentality that you run your sports book. It doesn’t work. Eventually the entire poker ecosystem will collapse under the weight of the sports book’s heavy handed attempts to make poker players act in a manner more agreeable to the sports book.

A lot of this tinkering the sports books want to do is based off the entirely false assumption that they are entitled to the player’s action. By that I mean that if ABC Sports Book sends a player to ABC’s skin on XYZ Poker Network, ABC falsely assumes they own the poker action. They view every dollar lost at the poker tables as a dollar lost from the sports book.

But if ABC didn’t offer poker there’s no guarantee that the money would have found its way to ABC. Let’s say that I have $200 to wager with every month. I put $100 on ABC and bet sports and I take the other $100 and put it on my favorite poker room and play poker.

Now ABC starts offering poker and my full $200 goes onto ABC. ABC is assuming that the $100 I spend on poker is money they are entitled to win from me in the sports book. They don’t understand that they gained whatever action they’re getting on my poker play as a bonus. That was money that was going elsewhere before.

But when you hear the sports books and even the poker networks talk about it, they speak in terms of owning the action. For instance, they say stuff like, “Our players are losing money to the sharks,” but the players don’t belong to the sports book. If the sports book didn’t offer poker the player would be playing on a different site losing that money. All they did was provide an incentive (convenience) for betting sports and playing poker under the same roof.

Or, what if I start off betting $200 a month on sports at ABC and really get into this poker thing. If I start spending $100 a month at their poker tables ABC views whatever money I lose to other players as money out the window for them. But in reality, if they didn’t offer poker I would have cut back my sports wagering by $100 anyway and been giving my poker business to someone else.

That’s why they’re trying to make poker behave more like games against the house. When they say that they want to handicap the game or even the playing field, what they’re really saying is that they want to figure out a way to make the players churn the money and generate more rake rather than losing it to players who are not going to give it back to them in the sports book or casino.

The big challenge for sports books and casinos is coming to grips with the fact that they need to treat their poker offering as a completely separate and independent entity. They have to quit thinking about them owning the customers and all of their action, and think about it as if they were building up a stand-alone poker business.

I mean, you don’t see Caesars Entertainment going around at the WSOP trying to get people over to the casino games, do you? Of course not. Caesars treats poker as a completely separate business unit. They realize that there’s money to be made building the WSOP brand. And while it may cannibalize some of their other gaming, it is also bringing in business they would have never had access to without poker.

On the other hand, you don’t see too many sports books known for their poker room offering. Nobody seems to be running their poker operations like they’re trying to be a market leader in poker.

Online sports books and casinos need to come to terms with the fact that as the popularity of poker increases that many of their players will divert some of their gambling money to poker. They can either accept that and try to offer the best poker playing experience for their players and keep some of that action (via the rake) or they should just abandon poker altogether.

It’s playing that middle that’s hurting the game. Forcing players to gamble on their terms rather than how players want to play has consequences. You can only force so much onto the players before the freedom, selection, and quality of games on other sites outweighs the convenience of doing all of their betting under one roof. And since that’s really the only thing holding most of these sports book poker rooms together, it could be a fatal mistake for them.

Last Week’s Twitter Updates

Bill Rini — Mon, 30 Jan 2012 18:04:18 +0000

RT @Barry_Carter: Is there that little to write about in the world of poker? http://t.co/o56k768W << Yes, too many "news" sites are SEO bait #
RT @relevantorgans: Don't understand the hoopla over Wikipedia blackout. We blacked it out here years ago. << Same w/ Thailand and YouTube #
RT @taylorcaby: I've enjoyed reading Maddox for like 15 years. His take on SOPA: http://t.co/m4PjR2N1 << Maddox Rocks! #
Following up on a previous tweet, change SOPA to UIGEA, his points have parallels with what's going on in poker http://t.co/BJV0pgMX #
RT @pokerprof: Poker Scandal Part 4 @pokerplayernws http://t.co/dRgln6tN <#
Kim Dotcom is in jail awaiting a fate that FTP lawyers say he coulda avoided by changing his name to Kim Dotnet << LOL http://t.co/74lT49s1 #
Upgraded to TweetDeck 1.2 and . . . ugh! What a mess. #
Do you think I’ve ever had an abortion? I don’t play poker on the Internet, either. << Barney Frank in the NYT. http://t.co/Kgpm2o5S #
Any former TweetDeck users have recommendations on what to replace it with now that it's been Twitterized? #
“@PokerScout1: Playtech #poker revenue down 20% in 2011 http://t.co/5MbhXAOC” #
Poker Job: Event Coordinator – World Poker Tour http://t.co/Jl5L1Vbs #
RT @SavagePoker: RT @ScurrilousMay: Congrats @warrenlush Let's not kid anyone, he usually picks up the tab! << Here, here!! #
RT @PokerScout1: Online #gambling could be worth $5 billion to Zynga http://t.co/xVpmlFqI << highly doubtful. #
Poker Job Opp: PR Director – Asia – Bodog http://t.co/cSaAaZId #
Zynga: "a creatively, and I would argue morally, bankrupt company" -> Forbes’ contributor Paul Tassi http://t.co/qKm7OF44 #
RT @hardboiledpoker: moon colony is fantastic news for online gambling! << Nope, still illegal on the moon. Lotteries and horse racing ok #
Poker Job Opportunity: Marketing Manager – ClubWPT.com http://t.co/owwMw4CV #
Poker Job Opportunity: Webmaster / Interactive Web Producer – ClubWPT.com http://t.co/WQb3Ufjw #
RT @pokerprof: Twitter Commits Social Suicide – http://t.co/LGZ83iBJ <#
Phil Ivey Wins 2012 Aussie Millions $250,000 Super High Roller http://t.co/IHEbsTf9 #
RT @GingMQuinto: I see a lot of "nipple-showing" shirts on men << Same as at the office. #

If you would like to get these updates in real-time, follow me on Twitter.

Looking for a Job in the Online Poker Industry?

Bill Rini — Sun, 29 Jan 2012 21:42:47 +0000

I just wanted to highlight some of the new jobs listed over at PokerJobSearch that might be of interest to those of you considering working in online poker.

Event Coordinator – World Poker Tour
PR Director – Asia – Bodog
Head of PR – PokerStars
Marketing Manager – ClubWPT.com
Webmaster / Interactive Web Producer – ClubWPT.com
World Series of Poker Internship

Jonas Odman, VP of Bodog Network and Anonymous Tables

Bill Rini — Mon, 23 Jan 2012 17:10:09 +0000

I just got done reading Inside Poker Business’ interview with Bodog VP, Jonas Odman and I really thought it was very interesting. Mostly because Bodog reveals their true motives for creating anonymous tables.

IPB:To what extent is the industry, and Bodog in particular, now moving too far in favour of ‘handicapping’ the game in favour of the fish?

JO: It is the other way around. The unfair tools have handicapped the game in favour of winning players, and we have now managed to stop that. I am sure other poker rooms will follow in our footsteps, or join our network, especially those who are a sportsbook first and foremost, as they do not want their players losing on poker all the time.

Ding, ding, ding, ding. We have an answer. Bodog’s changes are at least partially driven by Bodog trying to launch this Bodog Network which still hasn’t gotten off the ground since 2009. To date, they don’t seem to have signed up any other poker rooms to join the network.

So it seems that they’re trying to differentiate themselves in the poker network market space by making themselves seem more attractive to sports books that are afraid of players losing their money to other players rather than forking it all over to the sports book.

IPB:What else needs to change in online poker to make it more recreationally friendly?

JO: The key question is why recreational players play. Most competitors seem to think it is because they ‘hope to win’ and build their campaigns around that. I disagree, I think they want to have fun and be entertained and are actually willing to pay for that entertainment. Inevitably part of that experience is winning from time to time but it’s not the primary driver. Our job in the industry is to focus even more on the entertainment aspect, otherwise these players will choose other forms of entertainment.

This is untrue based on my own personal experience speaking with poker room operators. In fact, some places call their recreational players, “entertainment seekers.” I don’t know why Jonas thinks Bodog is the only poker room who has figured this out. I’ve written about it many times in the past. In fact, here’s a post I dug up from 2009 in which I specifically note that the motivation for recreational players is entertainment and that poker rooms would be wise to make their poker offerings more game-like. Likewise, Kim Lund has been shouting into the wind about this for a long time now as well.

Most poker room operators are aware of what Kim and I are saying. It’s not like I’ve ever had any gaming exec say, “Damn Bill, I never thought of that.” Free poker sites like Zynga and subscription poker rooms like CalShark and ClubWPT are a testament to the fact that players want to play poker even if there’s no money involved. For them it’s a game, it’s entertainment.

The problem real money gaming operators have with this concept is that the poker ecosystem is not easy to understand. The grinders are the ones who generate revenue for the poker room. They play lots of games and generate rake. However, there would be nobody to play against if the recreational players were not pumping in new cash into the poker ecosystem.

The knee-jerk reaction by poker rooms was to cater to the high-raking players since they were generating so much revenue for the poker room. This is quite a logical response as many poker rooms were started by or run by people out of the casino and sports book parts of the gaming industry.

As the industry matured, the poker rooms began to realize and appreciate that poker was a totally different kind of beast and that the recreational players were feeding the money pipeline that produced rake. At first most poker rooms tried to use the same promotions and incentives that they used for grinders to lure in the recreational players but they either have already realized or are quickly becoming aware that they don’t simply have good and bad players, but two entirely different types of motivators.

The big question is how poker rooms will address the fact that players play for different reasons. Poker rooms don’t necessarily need to turn poker into a first person shooter game but in order to lower the attrition rate and increase the number of players who make more than one deposit but it’s clear that they need to treat their recreational players differently and cater to the entertainment seekers.

If you’ve ever watched the WSOP or WPT on television you know that the coverage is heavily edited. They don’t show many fold, fold, fold, raise, fold, fold hands. Why? Because it’s boring for most viewers. Yes, there are some hardcore poker players who feel that it isn’t “real poker” or it distorts the game but millions upon millions of people love it. So who do you cater to? Is it the hardcore poker players who want to debate whether or not donk-betting the flop was the correct line for Ivey or the millions of poker fans who just like to watch the drama?

That’s why I could appreciate the brilliance of Full Tilt’s Rush Poker. It eliminated all of the boring hands and gave many players exactly what they were looking for. I’m not privy to Full Tilt’s data so I don’t know if this flattened the attrition curve for new players or even if the game was popular with entertainment seeking players but I love the fact that they were willing to try something new.

Conversely, what I really dislike about Bodog’s solution is that it kills any form of socialization. Poker is a social game. The players that they’re claiming to cater to want to interact and socialize with other players. Making everyone anonymous destroys that. I don’t understand how you can claim to be designing the game around recreational players and eliminate one of the aspects of the game that recreational players love.

Here Bodog has not added value. Instead they’ve removed value. Recreational players are not going to notice that they lose money less quickly so it is doubtful that players will even realize the benefit. Because, really, HUDs don’t give that much value to change this equation very much. If a very skilled player is playing against a lesser skilled opponent the lesser skilled opponent is still going to lose money (in the long run). Whether a HUD gives the better player a 0.5BB/100 advantage or 1BB/100 advantage is really of little consequence in the eyes of the recreational player.

In fact, one of the reasons many players like playing on sites that are mainly pools of casino and sports book players is because those guys love to gamble it up and will chase hands when they don’t have the odds. They love coming from behind and winning a big pot. That’s why they play. Making the tables anonymous does absolutely nothing to change this losing behavior.

Anybody who has read my blog for more than two minutes knows I’m not anti-poker rooms or against poker rooms making money. That’s my job. I’ve been saying that the industry needs to innovate going back to some of my very first blog posts in 2003/4. But this isn’t innovation. This is just brute force attempting to change the game to the poker network’s benefit.

I would much rather see poker rooms roll out something like Rush Poker than enforce a mandatory anonymous tables policy. Rush Poker added value. Players enjoyed the game. More importantly, if the idea failed Full Tilt would have shouldered the cost of developing and promoting a flop. Things like anonymous tables and convoluted loyalty point distribution models (Ongame, iPoker) force the cost onto others. Players either are penalized or forced to play in a gaming environment that they don’t like. They can’t opt-out other than to leave and go play elsewhere (or not play at all).

Anonymous tables and similar restrictive policies are treating the symptoms of the problem rather than the problem itself. If poker rooms want to lower attrition rates and keep players playing longer on their sites they need to do something innovative that increases the entertainment value of the site.

Zynga Ready for Real Money Gaming or Trying to Hide Failures?

Bill Rini — Sat, 21 Jan 2012 01:19:31 +0000

Last September I wrote about why I didn’t think Zynga would be a major player in real money poker. I cited several reasons and among them was that they weren’t serious about real money gaming. They had not hired a single name out of the online poker industry. I left the door open though and said that when we began to hear about Zynga making moves my opinion on their future in the real money gaming sector would change.

Several months later Zynga’s poker product manager confirmed that they had no aspirations to become a real money gaming platform.

And now, just a few months after they wrote off the real money gaming market, they’re making waves that they might have changed their mind and are actively looking for partners in the real money gaming space.

Many in the poker world are breathless at this but it’s not really that exciting. First off, you have to understand the situation Zynga is currently in. They just floated an IPO which flopped big time. The share price dropped 5% on the first day of trading and it hasn’t much recovered since then. Today the stock trades around $8.50 (down from the IPO price of $10).

Zynga is under pressure to report something positive to get the price back up. All of those institutional investors who bought Zynga stock aren’t happy with getting this turd dumped in their laps.

So how does Zynga go from saying they have no interest in real money gaming back in November of 2011 to saying that they are investigating partnerships just two months later?

In the past you’ve denied any plans of shifting to a real-money platform. Are you still sticking to that, even if it’s a few years down the road?

Zynga’s business model is free-to-play and we monetize the virtual goods. That’s our business model. We have no interest in going after the real-money space. We have been able to build a very nice business for ourselves with our heads down focusing on our existing business model.

–Zynga Poker General Manager Lo Toney via PokerNews

Part of it can be attributed to the fact that Zynga’s management has some issues. Just prior to Zynga’s IPO the media was full of reports about overworking employees, an alleged move to force early employees to give back stock options or be fired, accounting gimmicks, and that sources within Zynga confirmed that the company basically steals their ideas from their competitors.

Last year, for the first six months of 2010, Zynga amortized revenue from virtual goods using an expected useful life of 14 months. In other words, $5 of fertilizer a Farmville player bought anytime over the past 14 months would be spread over the next 14 months, so that Zynga booked about $0.36 of revenue per month.

But for the first six months of this year, Zynga shortened its amortization schedule to 11 months instead of 14 months. This means that, for every $5 of Farmville fertilizer sold, the company will book $0.45 of revenue per month for 11 months.

And that, in turn, means that Zynga’s reported revenue from these sales is considerably higher than it would have been had Zynga left its amortization schedule unchanged. (It also means that revenue in the 5th quarter will be lower, because all of the revenue from today’s sale will already have been exhausted).

So, how much revenue has Zynga’s accounting change contributed to the company this year?
$27 million!

Zynga has booked $522 million of revenue so far this year, so $27 million might not seem like a big change. But it’s big enough to wipe out the company’s $18 million of profit for the year.
In other words, had Zynga not changed its accounting, the company would have lost money for the first six months of 2011.

via Business Insider

There are also rumblings that Zynga’s core businesses are faltering. Recent comments by Sterne Agee analyst Arvind Bhatia seem to indicate that Zynga’s cost of acquisition far exceeds the lifetime value of the players they’re acquiring

Zynga’s marketing budget for the first nine months of 2011 was $120 million, which he said was almost entirely dedicated to acquiring new customers. “We also know that they had 3.4 million unique players in the September quarter, which is up from three million at the end of December 2010,” he explained. “In other words, they added 400,000 additional payers and they spent $120 million to acquire them.”

That’s $300 a head, yet each one spends an average of just $150 over the 12 to 15 months they stay with the company. You don’t have to be a rocket surgeon to see a pretty big whole in the equation. “That math won’t work for very long,” Bhatia said.

So, Zynga’s recent decision to look into real money gaming seems more of an attempt to divert attention away from other problems the company is experiencing. They’re trying to excite the market with news about possibly entering a multi-billion dollar market in order to take the focus off of the state of their existing business.

As All Things D puts it:

As with any new entrant in the space, Zynga will have to fulfill several requirements, meaning any major rollout is still months away.

The San Francisco-based social games maker will have to wade through a maze of state, national and international regulations. It will have to secure the correct licenses, and it also needs the right technology to make betting over the Internet secure.

For either of these last two requirements, a partnership or acquisition of an online gambling organization or other technology would make the most sense, instead of starting from scratch.

As I’ve said in the past, I’m not suggesting that Zynga can’t be a major player in real money gaming. What I am saying is that they’re not even close to being ready at the moment. Today’s announcement brings them a step closer to being ready but there’s still a lot of ground for them to cover before we can even begin to speculate how many virtual goods players would be willing to wager for real money.

If Zynga is really serious about entering the real money gaming markets a few things will likely happen. Consider any of the following the next step for Zynga:

1. Zynga acquires an existing online gaming operator

2. Zynga hires someone with real money gaming cred to head their real money initiatives

3. Zynga partners with a US land-based casino

Because without any of the above happening, Zynga is still not even remotely prepared to enter the space.

Phil Galfond’s, Let’s Make Some Changes

Bill Rini — Fri, 20 Jan 2012 20:36:19 +0000

Phil Galfond recently wrote an excellent blog post that I both wanted to draw some attention to as well as respond to as Phil invited other people to share their thoughts.

In a nutshell, Phil covers several different annoyances and problems with the way online poker sites operate. At the meta-level he seems to be focused on two major issues:

* Player tracking software
* Bumhunting and tables breaking when the mark leaves

While I agree with Phil on many of his points I disagree with his logic because I feel that Phil sees the poker landscape through Phil’s eyes. There’s nothing wrong with that. If you’re a Razz player, you’re likely to see Razz problems and solutions. Phil is a high-stakes player so he sees problems from a high-stakes player’s perspective.

How would you feel if you were playing poker for fun, just lost a $10k stack, and the 5 people at your table instantly sit out? Takes a little bit of the fun out of poker, I would think.

I completely agree that this would piss me off as a recreational player. I would not view this as a positive experience. But how many recreational players donk off $10K? The vast, vast majority of poker players don’t even have a $10K bankroll. That’s sort of where I think Phil sort of views this through a different set of eyes than I do.

But his point is valid. Even if we’re talking about $100, nobody wants to feel like the mark at the table. However, whether you’re looking at the problem as a $100 problem or a $10K problem can make a significant difference in how you address the issue.

In talking about poker tracking software, Phil says:

What’s more important, by far, is that they are scary. If a recreational player saw what your screen looked like while you played against them, how much less would they be excited to play? And some may not understand what a HUD is… some will talk about how the internet pros use programs that play for them or cheat, and use that as a reason not to play online. Obviously, that’s not what we’re doing, but we can’t prevent people from thinking that.

If you’re sitting down at an online poker table with $10K and you don’t know what PokerTracker or a HUD is, well, knowing what they are probably wouldn’t save you anyway.

But the bigger issue is by this rationale of thinking anything that offers one player an advantage over another can be viewed as being unfair. As I point out in this post in response to Kim Lund and Taylor Caby, access to knowledge is the biggest edge in the game. Isn’t someone who gets coaching from Phil at an unfair advantage against someone who has never been coached? If I read this or that book about poker, don’t I have an edge on someone who hasn’t?

The argument is a slippery slope. Eventually they’ll be asking players to take IQ and poker knowledge tests to make sure that players are evenly matched.

While Phil says that he doesn’t think poker tracking software and HUD’s should be banned, he only does so because he thinks banning them would be unenforceable.

I look at it a different way. I say, integrate poker tracking software into the poker client. If the big concern is that it offers an unfair advantage (which I don’t believe) then eliminate the advantage by giving the same tools to everyone.

In fact, why haven’t any of the poker rooms either bought out the existing poker tracking software developers or developed their own? They’re considered standard tools for online poker players and most poker rooms, for reasons similar as to those Phil cites, have no restrictions on using the software. Owning the software would give poker rooms much better control over how the tools are used.

Phil’s observations and ideas on bumhunting and tables breaking when the mark leaves are interesting and he’s obviously put a lot of thought into them but he’s approaching the problem too much like a high-stakes pro. He spends a lot of time exploring somewhat convoluted ways of preventing both of the above annoying behaviors when a much more simple solution exists.

In fact, he finally gets to part of it in bullet point number five when he suggests Must Move tables. Don’t most of the problems go away if you just employ land based card room solutions?

What if you ran your online poker room just like an offline poker room? You want to play $100 NL? There’s a board. Your name goes on the board and you either take the next available seat or you lose your place and have to wait at the bottom of the list again.

If you don’t like your table you can request a table change just like you do in a brick and mortar poker room. You don’t get to pick which table you get sent to though. You get sent to the next available table with a seat open.

Sure, it’s going to be frustrating for people attempting to pick tables according to the number of fish but that’s how live poker rooms operate and it works for them.

Phil spends a lot of time trying to resolve the issues around heads-up games but that’s not where a lot of the site’s overall games are played nor is it a huge revenue source for the poker rooms. In other words, because he plays a lot of HU, he sees this problem as a much bigger issue than it really is for the entire poker playing pool. All that’s really needed is a system that provides a fair way for people to compete against each other HU and that doesn’t allow certain players to horde HU tables waiting for fish.

IMHO, the most valuable suggestion Phil puts forth is in #6 Rewards/Promotions for Game Starters and Hands Played. I’ve long been a critic of calling what exists today, “loyalty” programs. They don’t really reward loyalty. They reward raw play. The more you play the more points you earn.

But, there are many actions that provide value to the poker room which are more akin to being a loyal player. For instance, as Phil suggests, players who are willing to start games are more valuable than players who will only sit at a full table. So let’s reward them for that. Why not award loyalty points at a higher rate for players who do things beneficial to the poker ecosystem and penalize players by awarding points more slowly for actions which are detrimental to the poker ecosystem?

For instance, why not award loyalty points at double the normal rate for a player who starts a table and plays short-handed until it fills up? Or why not penalize players that sit out when the fish leaves by taking back points for every hand they sit out? Even if you’re morally opposed to taking back points you could give those players a weighted penalty which would lower the amount of points awarded when they sit back in.

Players who attempt to angle shoot the system by sitting out of games, habitually short-stacking, etc would have much of their edge negated by the fact that they are earning loyalty points more slowly and thus moving up loyalty levels slower. Likewise, players who are starting games, playing during normally off-peak hours, or demonstrating other behaviors that benefit the poker ecosystem would earn loyalty points at a faster rate.

Overall, I wish more people would analyze the game the way Phil does. I think it’s healthy for the entire poker community. Whether or not we agree or if the solutions are commercially viable is not really relevant. It’s the discussion of these issues that adds value to everyone.

It would also help if the poker rooms were more open to discussing these topics as well. Instead of just rolling out a rake calculation change maybe they could explain their thinking to the poker community so everyone better understands what is good and what is bad for the poker ecosystem. I think more players would be willing to accept some limitations if they can see what the overall purpose of the change.

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