Run It Once Poker Open for Business
The focus of the poker world lately has been on the January opinion issued by the Department of Justice on the Wire Act, but believe it or not, other things have been going on! One thing that the Wire Act hubbub has distracted us from is the official launch of Phil Galfond’s Run It Once online poker room. Galfond, a long-time, successful poker pro, announced his venture something like two and a half years ago and after periods of silence, several public updates, and a closed launch, the site finally opened to everyone (in eligible jurisdictions, of course) last week.
Aside from the announcement of the site’s launch date (February 6th), the last topic Galfond discussed in an update post was the rake structure at Run It Once. For most of the people who have been following the progress of Run It Once, it is a touchy subject, as those people are most concerned about rake.
“A poker site shouldn’t simply charge whatever it can get away with,” Galfond wrote. “A poker site’s pricing decisions should be guided by their values and beliefs.”
Galfond has approached things in terms of “net rake,” that is, how much rake someone pays after rewards. As he put it, €500 in rake with no rewards is the same as €5,000 rake with 90 percent rakeback. Thus, one question was whether to set rake low without offering rewards or to set it higher and have rewards. To wit:
In early meetings on this topic, we reasoned that however we reached our net rake numbers, the professional players would figure it out and judge us on our bottom line. We felt that this demographic, so long as we didn’t make anything inconvenient for them, would be somewhat indifferent to how we structured things so long if the end result looked good.
We assumed that casual players wouldn’t be sensitive to the base rake rates we were charging, but would be highly responsive to a well-designed, engaging rewards system.
In reality, I believe that while professionals like to think they are indifferent to rewards mechanisms and simply judge them based on expected value, most of us will still have a good time if a fun rewards system forces us to. We’re only human, after all.
So, we decided that all types of players would get more enjoyment out of a fun system that achieved our net rake targets through higher base rake and high rewards. And even if the price sensitive players were indifferent to the rewards mechanism, it would still be better for them if the price insensitive players had more fun by seeing rewards coming their way.
One of the most difficult parts of the rake system for Galfond was to strike a balance between making pros happy and recs happy. Who do you reward? Galfond like the idea of rewarding recreational players more, as not only does it makes things more fun for those players, but their rewards tend to flow to the to the pros in the long run at the tables, anyway.
“The major downside to heavily rewarding recreational players is that you’re lowering your pricing for the group of players who care least about it and raising your pricing for the players who pay the most attention,” he said. “In fact, generally speaking, a number of recreational players don’t know about rewards programs, and many leave their rewards points unclaimed, which means added profits for a poker site at the expense of unaware recreational players.”
Thus, Galfond and his Run It Once team decided that everyone would be rewarded equally. But even that isn’t so simple because they needed to figure out how to design the program. Galfond wanted it to be fun, transparent, engaging while not distracting from poker play, easy to collect and always claimed, and visible to everyone.
Random – Yet Consistent – Rakeback, If That Makes Sense
What Run It Once came up with was a 51 percent rakeback for all players via a program called “Splash the Pot.”
It is a simple system. At the beginning of a random hand, chips will rain from out of nowhere and juice the pot. The “splashes” will range from one big blind to 1,000 big blinds. Whoever wins the hand gets the extra chips. That’s it. Galfond explained some of the benefits of the program:
Splash the Pot is highly visible (you can’t get much more visible than having your rewards thrown on the table in front of you), fun, and equitable. Unredeemed rewards are a thing of the past, and all reward money goes back into the poker economy immediately.
This also adds new dimension to a game that some of you may fear is getting too close to “solved” – another test of your ingenuity at the table. Adjust to the splashed pots better than your opponents do, and you’ll increase your bottom line.
He admitted that some players might not like adding variance to their rewards, but from his experience playing in high-stakes cash games, he has found that the occasional goofy, wilder hand makes for a more fun session. He added that most hands won’t be splashed and most splashes will be small.
As mentioned, with Splash the Pot, rakeback at Run It once will be 51 percent. Base rake will start at 5.75 percent at the lowest stakes and decline to 4 percent at the highest stakes.
There was no mention of rake and rewards for tournaments, as right now, Run It Once is only spreading cash games.