Playtech poker chief: rakeback price war
Playtech poker boss Danny Frishman has entered the rakeback debate that has taken place on EGRmagazine.com, saying that giving players linear percentages is "killing the industry" and that banning the controversial retention model has played a key role in the growth of the company's iPoker network.
PLAYTECH POKER boss Danny Frishman has entered the rakeback debate that has taken place on EGRmagazine.com, saying that giving players linear percentages is “killing the industry” and that banning the controversial retention model has played a key role in the growth of the company’s iPoker network.
Speaking to EGRmagazine.com this week, Frishman explained why Playtech decided to completely ban rakeback rather than capping and policing it as many other networks do.
“Giving players linear percentages from the rake they are generating creates a price war, reduces the bottom line to a minimum and does not incentivise loyalty. It is killing the industry by taking money from developing better platforms and promotion,” he said.
“Our card rooms now focus more on recruitment of new players to grow the overall liquidity instead of circulating players between the different card rooms in iPoker, and we have players that are more loyal.”
Responding to views aired by Karim Wilkins of RakeTheRake that the number of skins given out by networks made rakeback and its effects hard to police, Frishman said all new licensees are made aware of the policy and that the network ban is rigorously policed. “If someone does not comply, we do not hesitate in cutting to the policy to make sure they comply in future,” Frishman said.
Wilkins’ comments followed William Hill Online COO Peter Marcus’ rallying call to poker operators on rakeback earlier this month, when Marcus told operators to “get together and be strict” on preventing affiliates and poker skins offering it.
Frishman continued that a further factor in the strong growth of iPoker was the number of sportsbooks on the network, including Bet365, Paddy Power and William Hill. “They bring in massive traffic of new, depositing recreational players. It gives us a big advantage over other networks. They are very good for the network ecology,” he said
Playtech’s head of poker also defended the affiliate lifetime revenue share model, which has been the focus of mounting criticism from some commentators for reducing the amount of money operators have left to spend on retention. Frishman said the model provides a strong incentive to affiliates to bring in quality traffic and enables operators to reach emerging markets and niches they would otherwise be unable to.
However, Frishman agreed that both poker rooms and big rakers, which the industry spends significant sums rewarding, would benefit if some portion of this spend was re-allocated towards educating new players about poker and recruiting new players.
“Maybe it’s better for these players to leave more of this money for the industry to invest in penetrating new markets and getting new players, because those grinders that generate so much rake and get it back will then be making much more money from winning from other players than they actually make from rakeback. So it’s also in those players’ interest that poker keeps recruiting a lot of new faces,” he said.