We've found the solution to the rakeback problem
The rakeback problem? What problem? asks Bodog Network vice-president Jonas Odman, who reckons he's cracked it...
BODOG NETWORK has found a unique and ultimate solution to the rakeback problem experienced by all poker networks today.
Rakeback leads to unwanted competition within poker networks, with some operators ‘stealing’ the highest-raking players from other operators by offering rakeback, either directly or through affiliates.
There currently are a few different ways of getting around the problem. Some poker networks ban rakeback and try to police it, some cap rakeback and try to police it, and some let bigger operators ‘ring fence’ their players.
However, as a poker network, you do not really want to police your business partners, and by allowing ‘ring fencing’ you contradict the whole idea of having a poker network.
The root of the problem is the way rake is distributed among players, and that is where Bodog Network intends to address the problem.
In the poker economy, money can only be moved in and out in three different ways: deposits (in), rake (out) and withdrawals (out).
To maximise the rake, a poker network needs to maximise the net deposits. This basically means that a poker network wants to attract net-depositing players, typically losing players.
However, the way the rake is currently split between players, winning players will get a (too) large proportion of the rake.
Since the poker networks pay so much money to operators who bring in these winning players, this is the type of players the operators compete for, very often using rakeback or similar tools.
We have a new unique formula for splitting the rake, where the player result is an important factor. On Bodog Network, operators who bring in losing players will make significantly more money than today, and this will encourage them to market their poker product even more.
Winning players, on the other hand, will be worth so little that there is no point competing for them.
This will create a much better poker economy for all: operators, affiliates and poker players.
This article first appeared in the October issue of eGaming Review.