Trouble Brewing for the iPoker Network
On the surface, the future looks bright for the iPoker network. Operated by Playetch Ltd., it plays host to a whole range of diverse “skin” partners who use their own custom-designed software and website to run users into the same massive pool of players. It currently sits 3rd in the list of the most popular poker networks, making it the site closest to cracking the Full Tilt/PokerStars duopoly.
However, beneath the surface trouble is brewing. Popular UK skin VC Poker recently receive requests from iPoker to shed their most profitable players. It seems that a maelstrom of rakeback deals and poor marketing have resulted in many of the network’s subsidiary partners bringing in players who contribute a net loss. In an effort to stem the flow, Playtech are threatening to punish and even ban sites that continue to provide a large number of winning players.
Many top players on VC Poker have received the following email:
“If you are not already aware iPoker will be implementing a new policy in the New Year which will categorize players depending upon certain criteria. The new policy will also impose penalties upon card rooms that in essence, have a high proportion of winning players in relation to losing players.
Regrettably therefore, we are being forced to restrict a number of accounts in order to comply with the new policy and to avoid penalization by iPoker and it grieves me to inform you that we have no option for the time being other than to restrict the cash game stakes at which you can play on Victor Chandler Poker.
We sincerely regret having to take this action and hope that the policy will change in the future so that you may once again enjoy playing cash games at Victor Chandler Poker. In the meantime, please accept our apologies for any inconvenience that this action will cause but know that you can still play in our tournaments and on any other of the Victor Chandler suite of products.
Yours sincerely,
Victor Chandler International”
Many top players are understandably furious with this decision and have began to flood message boards and community sites with negative comments and reviews. Tight Poker, who originally broke the story, claim that iPoker have forced themselves into this harsh stance. Like many of the top online sites, iPoker operate a no-rakeback policy. However, many of the smaller skins and affiliate companies have been offering iPoker rakeback on the sly as a way to tempt in the most prolific internet players. While this brings in traffic in the short term, the players most keen to use rakeback deals are usually net withdrawers and are ultimately not generating much profit.
Meanwhile, they have failed to market towards casual players, the users who make up the core of any poker network. Tight Poker claim that an endless cycle of skins trying to outdo each other which increasingly unprofitable rakeback deals, coupled with iPoker’s lax attitude towards rakeback has lead to this unfortunate situation.
Industry affiliate expert Bill Rini went even further, arguing that iPoker created this situation themselves when they failed to properly asses the financial viability of their skin partners. By cramming on lots of different skins, Playtech did not correctly check whether these rooms had the potential or financial liquidity to expand. In an incredibly competitive marketing environment, these rooms were forced to rely on rakeback and other promotions to bring in good players, rather than casual ones. In fact, Bill even claims that this was in line with iPoker’s business strategy at an earlier stage. “Now that they’ve noticed that certain types of skins can be a drain on their poker ecosystem they now want to change the rules and punish these rooms for doing exactly what the networks had hoped they would do when they originally signed them up.”
Ultimately, the negative press and word of mouth reaction generated by this decision could have an inverse effect on iPoker network traffic, as all of their best players migrate to more comfortable surroundings. Conversely, it may be that, even if the top players leave, the more profitable casual market remains unaffected and Playtech are able to rectify the financial quandary they find themselves in – even if it means the death of a few smaller skins.
Joseph Ewens
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