iPoker’s New Revenue Assignment Method Begins Sunday
Over the last few years, online poker rooms and networks have struggled with how to attract the perfect poker player. For a long time, rewards were thrown at high-volume players, as poker rooms would naturally want to attract players who keep their games going. But more and more, operators have moved towards becoming more appealing to the “recreational” player, the type of player who cares less about winning and more about having fun. To that end, the iPoker Network will be implementing a new rake distribution scheme this weekend in an attempt to have the best of both worlds. This new Source Based Rake (SBR) system is set to be implemented on February 1st.
Normally, a network credits the revenue generated by a player (cash game rake or tournament fees) to the poker room through which they are playing. In a traditional rake contribution method, put simply, if a player on Everest Poker contributes ten dollars in rake during a session, the iPoker Network attributes those ten dollars to Everest Poker (how the poker room and network split that money is a mystery to me). Pretty easy. But there are problems with this method, one of which is that it encourages poker rooms to recruit high volume, highly skilled players.
While at first blush, this may not seem like a problem, poker rooms have begun to see these strong players not so much as sharks, but more like leeches. Sure, they keep games going, sitting for hours at a time, but the strongest players suck money out of the poker economy. They deposit, win money from lesser players, and cash out their profits. Yes, they contribute to the rake, but when they drain opponents of their chips, they take that money off the site. That’s the theory, anyway.
Recreational players, on the other hand, are not consistent winners. They aren’t necessarily “fish,” but they are not dominating their competition. They play mostly for entertainment. As such, when they lose, they are generally willing to reload and try again. And the more money they keep depositing, the better it is the poker room. This is why there has been a big shift in how poker rooms are trying to market themselves. Fewer winners, more losers, so to speak.
The iPoker Network’s Source Based Rake system approaches things a bit differently. In this system, rake is essentially traced back to the player who originally deposited the money that generated the revenue. It is kind of an odd, complicated calculation, so we won’t worry too much about diving to deeply into it. A video site originally reported in November that it involves a “virtual balance” used in a conjunction with a player’s actual, real-money balance. As a player wagers money to generate revenue, his virtual balance is reduced and that revenue is assigned to him. If I am interpreting all this correctly, it appears that if a player’s virtual balance drops to zero, revenue will stop being tagged to him, as all remaining real money in his account will have either already been counted or come from another source (i.e., a different player deposited that money).
Long story short, as this is giving me a headache, the iPoker Network is going to concern itself with which players are originally putting money on the network, not necessarily with which players are churning out rake.
According to PokerFuse.com, the network won’t be going completely to the SBR method on February 1st. Instead, half the revenue from ring games will be allocated to skins via SBR and half will continue to be allocated with the contributed rake method. It also looks like, at least to start, cash games are the only games that will use Source Based Rake. Tournaments, Twister tournaments, and Sit-and-Go’s will still use the rake contribution method to assign revenue to skins.
Players themselves will not directly feel any ramifications of the Source Based Rake method. It is only something that will concern the skins. Indirect effects, however, may be seen. Because it will no longer be as rewarding for skins to recruit high volume, winning grinders, those types of players, the kind who tend to search out the biggest rakeback deals and most lucrative rewards for heavy action, may very well see their incentives begin to decline. One thing that is very likely to go the way of the dodo is the under-the-table rakeback deal. Some affiliates offer unadvertised, high rakeback percentages to players, but as iPoker skins start to reduce incentives for hardcore players, these affiliates may not have the ability to extend such great deals anymore.
Recreational players, on the other hand, may see more promotions geared towards them; possibly things like larger reload bonuses, a percentage of losses covered per day, freerolls, and low-stakes cash game or tournament incentives.