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THE BATTLE AGAINST GRINDERS
iPoker has with its recent network split significantly changed how player liquidity is valued. The drastic decision to split the network in two has raised many questions. In this article I will look into similar events on various networks and compare the different strategies used by networks to maintain its poker ecology. Lastly I will discuss how it has affected the poker players and changed online poker overall.
iPoker has divided its network into iPoker1 and iPoker2. iPoker2 consists of the biggest brands named Bet365, Paddy Power, Poker770, William Hill & Titan Poker. iPoker1 is the remaining 37 skins that did not meet the requirements of having 6000 active players and 800 new depositing players on a monthly basis. iPoker has since 2008 been fining poker rooms that hosts winning players as well as partners offering illegal rake back deals directly or via affiliates.
Party Poker Split
The first notable network split was seen in 2005 when Party Poker gave its partners an ultimatum: sell us your poker room or leave the network. Eurobet left the network being a sports book and therefore unwilling to sell part of its database while Intertops made a marketing agreement for the time being but eventually left the network. MultiPoker and EmpirePoker were bought by Party Poker. 1 Party Poker had to take back the control of the network and stop the growing rake back problem and poaching of its players.
Ongame dealt with the ecology problem in July 2010 by changing the rake contribution formula. The players were divided in three groups called ‘fish’, ‘grinders’ and ‘sharks’ as part of the Ongame Essense system.2 The primary function was to award the poker rooms with losing players and at the same time give higher cash back to losing players.
Why iPoker1 & iPoker2?
The general perception is that the biggest pool of ‘fish’ is on the current iPoker2 skins. By dividing the network up to NL $2/$4 the grinders and winning players from the remaining 37 skins will be separated from the main ‘fish tank’.
The so called grinders now have access the ‘main fish tank’ by switching to one of the five iPoker2 rooms. It is a smart strategy by iPoker since many iPoker1 grinders will switch to iPoker2 skins.
We can only speculate that the founder of Playtech and iPoker who owns Titan Poker has a hidden agenda. Playtech owns roughly 29% of William Hill so if a lot of grinders switch to Titan Poker or William Hill it will benefit shareholders of Titan and Playtech.
iPoker2 a Bluechip Network
The future of iPoker is iPoker2 while iPoker1 will be an experiment with an unknown future. iPoker1 and iPoker2 still share tournaments, a majority of its Sit & Goes and cash tables above NL400. Playtech no longer seem highly interested in the status of being ‘The Biggest Network in the World’. The split will most likely result in a drop of liquidity but on the other hand attract huge poker rooms like Everest Poker and potentially some of the major poker rooms on Ongame when Bwin joins Party Poker, which could be the end of Ongame.
I would not be surprised if we see Merge Gaming closing down all its skins and focus its business on Sportsbook.com and Carbon Poker. The 60+ skins are believed to only have 10%-15% of the total network liquidity. A lot of those players would switch to one of the two main brands if the white labels where to shut down or move to Revolution Gaming or elsewhere. Processing transactions in the US is highly difficult and dangerous so it would not be a bad play by Merge Gaming & Sportsbook.com to do this in order to increase its own profitability.
Online poker is no longer just about volume. It is very much about what kind of liquidity you have as a network and what operators you can attract to secure a healthy poker environment and thereby a lucrative business for the poker room owners. I was tempted to say healthy growth but in this day and age only PokerStars can focus on growth the rest of the world simply struggle to maintain. PokerStars is in fact the only poker room where the concerns raised in this article does not apply.
The low stake players who rake big volumes are no longer desired on the networks. The benefits are reaped by the few players who have survived the long tough years, where most pro players have gone bust, and today can sit at the mid- and high stakes tables and clean out the richer fish and not have to worry about rake back deals and cash back schemes.