Rakeback for Existing Players
For players, the question of whether to take rakeback is an easy one. Of course! If you have the opportunity to get a discount, you should take it. You’ll find links to Rakeback.org on this site, and I encourage you to check out their offers. For the serious player, this can amount to hundreds, if not thousands, of dollars a year.
Some people argue that the sites allowing rakeback are cutting their own throats by giving away too much of their profits, but this isn’t really the case. Even before rakeback, many of the rooms paid a percentage of their rake to acquire new players. It’s always been a part of their compensation plan. Now the only difference is they’ve opened the door for their super affiliates to give a portion of these commissions back to the players. On the surface this sounds great, and for a new startup it might be just the thing to get players fast, but there are drawbacks.
First, if only the super affiliates can afford the program, then smaller affiliates are put in the position of knowingly promoting an inferior deal. This is where I found myself with Holdem Dogs. Since my site doesn’t do the volume necessary to cover a 27-30% rakeback offer, I’m effectively priced out of the market. While I’m still allowed to run affiliate ads, I can’t in good conscience do so knowing a new player will do significantly better elsewhere. Instead, I decided to drop advertising for the sites with rakeback and signed up as an affiliate with Rakeback.org. This means less money for me, but at least I know I’m not steering by readers into an inferior offer. In the old days a super affiliate may have negotiated a bigger one-time deposit bonus, but for the most part we were all offering the same basic deal. Now, smaller affiliates have one of two choices. Stop running ads, or continue securing signups only to have those players pissed off later because they didn’t get rakeback. I can’t imagine either one of these being a good scenario for the poker site.
Secondly, it’s inevitable that some of the players will feel slighted. This is what happened to me. Since I signed up with Full Tilt, UB and Absolute back in 2004, I’m not eligible for the rakeback deals offered today. In each case, my account belongs to an affiliate that doesn’t pay rakeback. Search any poker forum, and you will find hundreds of players angry because they’re in the same boat. In many cases, these were the founding players that took a chance on these sites when they were just startups. Now they find themselves sitting next to a new guy that’s getting $50-100 a month in rakeback for life, and he just signed up yesterday.
Some people seem surprised that the older players are pissed, but why? Imagine if this happened in the real world. Say you’ve been a member of Sam’s Club for 5 years, and one day you see a guy handing out 30% discount cards to new members. When you discover these aren’t just one time discounts, but they’re good for life, you inquire about how to get the same discount. The manager tells you “Sorry, only new customers, who saw our ad in the New York Times, are eligible for the discount.” You’re floored! You’ve been a loyal customer for 5 years and this new guy who’s never bought a damn thing gets the lifetime discount. Most likely you would be so pissed you would never shop there again.
When pressed, the sites will tell you that it’s the affiliate that pays rakeback and they don’t have anything to do with it. While this is technically true, it’s the affiliate agreement that either allows or disallows the practice. There’s a reason why you don’t see rakeback offers for Poker Stars, Party Poker or Poker Room. They don’t allow it. Also, the sites must help with the rakeback payments, since it’s hard to imagine someone entering thousands of money transfers into the same poker client you and I use. So, it may be the affiliate taking the reduction in commission, but it’s ultimately the poker site that’s makes rakeback possible.
I’m not out to stop rakeback programs, in fact I think a little kickback is a great way to keep a player interested and loyal. I just think the rooms need to mange the programs fairly. First, it should be setup like a deposit bonus that all the affiliates can offer. Customers shouldn’t be penalized based on which ad they click. Hell, I don’t even know which affiliate I belong to. That relationship means nothing to me. However, I do care about the relationship between me and the poker room. Second, the sites need to make provisions for existing customers. To allow new players to get a significantly better deal than your original players is just bad business. I say “allow” because the rooms could modify or even stop the rakeback offers with a change to their affiliate agreement. They need to realize the players are the customers. Allowing the affiliates to control your customer relations will ultimately prove to be a big mistake.
Customers remember who treats them fairly and who doesn’t. As a U.S. player, my choices are limited, but someday that may change, and when it does it’ll be too late. The rooms should be doing everything they can to build brand loyalty now. Currently, I’m boycotting the rooms that won’t address the issue of existing players, and I would encourage others who’ve been locked out to do the same. Take your rake elsewhere. It’s the only real voice you have…
__________
On a individual note, I was sincerely disappointed by the response I received from Full Tilt Poker. Full Tilt had always presented themselves as a site by players for players, so I would have expected more. I always liked their operation and for a long time considered it my home room. However, I think they’ve made a serious error in judgment when it comes to rakeback. I would happily return if I could simply be treated the same as the newbie sitting down for the first time.
