PokerStars Flattens Payout Structures, Retriggering Payout Debate

Late last week, PokerStars announced that it would again be flattening its payout structures in an ongoing attempt to award more rewards and wins to a larger number of players. As PokerStars goes, the industry follows, so it’s worth checking in on the latest changes sure to effect the online-poker world. The changes go into effect today.

PokerStars Casino LogoNews of the additional payout-structure flattening came via a Stars blog post on Thursday by the site’s poker operations manager, Mike Jones. Here’s how he summarized this latest adjustment:

“Looking back to the 2002 – 2006 period, most tournaments paid about 10% of the field. This was a carryover from brick and mortar poker, and that was fine at the time. Providing a smooth transition from live to online poker was one of the most important considerations back then, and 10% payouts helped to facilitate that transition. There were some serious flaws though: there was often significant deviation from the 10% target; a huge portion of the money went to the final table; first place received too much, the jumps in final table prizes were too severe; the pay tiers were often very large, meaning that large swaths of finishing positions received the same prize; most importantly, nine out of every 10 people who played walked away with nothing to show for their investment of time and money.

“My colleagues and I thought we could provide a better poker experience for most people. We narrowed the pay tiers so that there would be less deviation from the 10% goal, and introduced more granularity in the non-final table prizes, so that, for example, someone finishing in 300th place in the Sunday Million was paid more than someone who finished in 500th place.

“Over the years there was further evolution. We moved money away from first place. We moved money away from the final table. We smoothed out the huge pay jumps. We introduced even more granularity to the pay tiers. Anyone remember when 10th-18th all received the same prize? That used to be a thing. We changed that, too. We eventually decided that we didn’t want 90% of the field walking away with nothing and we paid more places.”

All this is historically true and accurate, with the caveat that all the info is presented within the sphere and mindset of where PokerStars wants to go with its future market efforts. As has been the case for the last three or four years, that means catering to the more casual player, the “net depositor,” in industry terms.

That tends to be the majority of players, who lose small amounts over time, and Stars and other sites continue catering to that audience. It’s a prudent marketing move, and as Jones continued, it was made quite clear. Here’s the part where Jones detailed the changes, which increase the papyout tier by an additional 2% in most of the tourneys to be affected:

“It’s clear to us that paying more places has a direct benefit to most of our players. PokerStars runs a great many large-field tournaments and paying, for example, 1 in 8 players instead of 1 in 10 means that lots more people are paid who would have otherwise had a losing experience. We want more people to have more fun by winning more often, so we’ve continued to make changes big and small: we moved from 10% to 11.1% to 12.5% to 14.2% to 16.6% gradually across the years. The last time we did this was early 2017 when we moved the payouts in most tournaments to 18%, or 1 in 5.5 players.

On September 11, most tournaments on PokerStars will be changing to deeper payouts. Tourneys that have been paying 12% will change to 14%; 14% will change to 16%; 16% will change to 18%, and 18% will change to 20%.”

In proportional terms, it’s more like a 10% to 15% expansion.

It’s easy to get on board with the hinking of Stars and other sites: Make more players feel good more often, and they’ll stick around far longer. There’s also no reason that the “10%” figure should ever have been an absolute; just because that was the standard back in the early brick-and-mortar days doesn’t mean there was anything inherently correct about that value. People with some knowledge of pokr history know that 10% itself was an adjustment; many smaller, earlier events were winner-take-all or paid out predetermined percentages to just a couple or three top spots.

Nonetheless – and as one would expect – reaction to the Stars announcement has ben decidedly mixed. The money to be paid to the extra cashing spots has to come from the top few finishers, usually first place and the final table. That’s generally the realm of pros and grinders. To a tee – and very much in line with the reaction to previous structure flattenings by all sites – these grinders view the latest changes as an attack on their ROI (return on investment).

There’s some merit to that argument, but not too much. Neither PokerStars nor any other site is bound to ensure the profitability of any subset of its players. Instead, as has happened before, it’s really a story of balancing the playing field in a zero-sum, predatory game. There are many ways to do that balancing, but it always occurs with cost… and complaints.

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