RESULT OF POACHING PLAYERS

Submitted by Erik Smith on Wednesday, August 31, 2011 - 13:56

Affiliates offering rakeback have costed the entire poker industry a lot of money, destroyed several networks and put companies out of business. No one knows where the online poker scene would have been today if rakeback payments had been invested in new players and new markets. On the contrary these affiliates changed the entire perception of online poker making it possible for players to make a living purely off rakeback payments. If a player is offered 30% rakeback in one poker room and 60% rakeback in another room on the same network it is not hard to imagine which deal is more tempting.

Some would argue that poker players need to be thankful since rakeback deals earned them a lot of money they were not entitled to earn to begin with. But who can expect the individual poker player to think of the big picture and refuse rakeback due to what might happen in the years to come?

SMALLER MARGINS & LESS NEW PLAYERS

The rakeback affiliates working on smaller margins quickly discovered that it was less costly poaching existing players instead of signing up new players in the market. On top of that existing players that are putting in big volumes of rake are also worth more to the affiliates.

If you earn 5% of $5,000 from an experienced poker player you make more money than you do receiving 35% of the rake from a brand new player who on average generates $100 per month.

Several online poker rooms and affiliates started focusing on recruiting existing players poaching them with better deals. On all networks you had poker rooms obeying the rules and others who did not. This creates an uneven and unstable market that eventually will force big operators into leaving their current network partner to find a more stable network thereby securing their future. Without liquidity from big operators the small poaching poker rooms cannot keep the eco-system intact and the network is doomed since players will switch network heading for liquidity and soft games. This happened to the Cryptologic network which died a sudden death. The Microgaming Network most likely would have died in a similar way if it had not been for the Tusk Poker scandal and the fact that Unibet joined the network.