Wednesday, 21 December 2011

Potential Stars Rake Changes Update

Note: This is the draft post I eluded to and wrote a few days ago when the news came out. As of the time of this post, Stars has yet to comment to players. I am reserving my thoughts on the VIP program as a whole until they do comment as any additional changes could potentially radically alter the ramifications. I was going to withhold my thoughts on this until there was an official announcement but this is basically all anyone is talking about right now anyways.

I have not paid any attention to what is going on with SNGs and MTTs. These comments are strictly regarding cash games. And of course there is always the outside chance that they are changing payment calculations for affiliates but not for players. This scenario seems rather unlikely.

December 19th:

The proverbial cat is out of the bag. From the PokerStars Partners T&C:

1.1 Ring Game Gross Revenue

shall mean the sum total of a Qualified Poker Player's contributions to Rakes in a Ring Game Hand while playing on software downloadable from the Site(s). Any Qualified Poker Player's contribution to a Rake shall be determined by dividing the total amount that a Qualified Poker Player has contributed to the Pot in any Ring Game Hand by the size of the Pot in that Ring Game Hand and multiplying it by the total Rake taken from that Pot in that Ring Game Hand regardless of the number of players dealt in such Ring Game Hand.
The same was confirmed in an affiliate email sent out today.

They are going to need to make some serious consolations to make up for the reduction in bonus money being paid out because as it stands, a change to Weighted Contributed in isolation is going to have the appearance of a rather large cash grab evidenced by math you can pretty much do without a calculator:

Recreational players contribute more to the pot more often and therefore they will receive a higher vpp/hand rate. Regs contribute less and therefore will receive a lower vpp/hand rate.

Quite simply, VPPs would be redistributed and devalued through a two-prong approach:
  • More VPPs will be going to players with a lower FPP multiplier resulting in less FPPs in the system.
  • More FPPs will be traded in at a lower dollar value.
  • A Bronzestar VPP is worth 1 VPP x 1 FPP x $0.010/FPP = $0.010
  • A Supernova VPP is worth 1 VPP x 3.5 FPP x $0.016/FPP = $0.056

The more VPPs you siphon towards the lower end of the VIP program, the more you pocket. So that leaves us hoping for some sort of consolation in terms of increased milestones or multipliers or completely revamping the entire system.

The standard argument for Weighted Contributed rakeback is that everyone gets their fair share. That was certainly FTP's line. I agree, however I think that the liquidity and health of the poker economy vastly outweighs the fair share argument. Making a statement along the lines of giving players what they deserve -- and being forced to oblige by removing money from the poker economy by pocketing the difference -- just isn't going to fly. Thus, Weighted Contributed is the most fair and could possibly be used if everyone were getting the same deal. If they're not, it's by far the worst option since it gives everyone their share but also hurts everyone at the same time.

Regs want a good deal to act as props. Recreationals want to play the game they want to play when they want to play it. In my opinion, this is how the Dealt method made Stars the run-away monopoly that it is. Unfair Weighted Contributed turns this entire notion on it's head. Regs are here for the money and WC takes that away from them. Recreationals are here for the recreation and if games aren't running because regs decided it wasn't worth it, you take the recreation away from recreationals.

It's a lose/lose/lose because if games aren't running, the site isn't raking tables. Is it really worth risking the flat out massive rake that regs generate in order to take back some of their rewards? In general, the rake paid dwarfs the rewards clawed back.

Take a full ring 100k Supernova for example:
  • 100k VPP =  $16,666 paid in dealt rake.
  • He receives $6400 in rakeback.
  • If you manage to take back 25% of that through WC redistributed FPPs, you profit an extra $1600 minus the slight increase you have to give to lower level players.
  • That means you're laying yourself 10.5:1 odds hoping that he doesn't pick up his chips and leave.

If these numbers were accurate, it would mean that if more than 10% of the 100k Supernova regs leave due to this change -- which in my estimation is completely plausible given that there's an army of slightly above breakeven regs who might deem Stars not worth it anymore -- you've just shot yourself in the foot. And to top it off, your new program certainly isn't going to attract any new rake generators.

Like I said, I'll hold off on my thoughts for the program as a whole until we hear the rest of the story, but I wanted to post an in depth analysis of why I think an unfair version of Weighted Contributed is a terrible idea for everyone involved. Increases to multipliers or milestones or FPP value would be needed to make up for the loss in VPPs so we'll be waiting to see if that happens.

December 21st Update:  I've run a bunch of calculations based on the speculation going on in the 3 threads that have been overwhelmed by this in the Zoo and Bonus forums (SNE Pursuit thread and Poll thread in the Zoo, and 2012 Changes thread in the Bonus forum) and I suggest you check those threads out for more discussion.

As a preliminary conclusion to those calculations based on past experience with sites switching to WC, it seems about right that if Stars were in fact to increase the rake --> Table VPP multipliers to 6 and 6.5 to make up for the losses that regs would be receiving, the whole thing would be a push and probably decently fair enough, slightly hurting nits while rewarding fish more and giving everyone else an amount relatively close to what they have now. Of course we'll have to wait and see what the actual decisions are and how they affect game quality to really get a handle on where this is going.

I've been glued to the Zoo and will likely post again very shortly after an official announcement has been made. Stay tuned.

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