An interesting thing happened recently in a live game here in Phnom Penh. A friend of mine walked into a game that was near full and took the only open seat. Upon sitting one of the players exclaimed that he did not want to play with another "professional" and cashed out. Other people did the same and over the next 30 minutes what was a full game was now finished. For the record my friend is a winning player and the assessment of the first exclaimer was correct. This was not an issue in the past as since the game of poker was more popular it was easier to maintain a balance between pros and recreational players. But with the waning popularity of the game and the shortage of new players, one can reasonably understand why some of those who play for fun may not want to play on a table with multiple players who are doing nothing else but looking to make money. This puts the poker room in an awkward spot as theoretically speaking they should be welcoming of all players who are willing to buy in with cash and follow the rules while playing. But they also face the prospect of losing those players that keep their game fun, friendly and more conducive for action. There are two solutions to this quandary that poker rooms, both live and online, have employed in recent years to varying degrees of success. In this article we will endeavor to examine both sides and try to reach a conclusion as to which one, if any, is the most viable solution going forward.
One solution and the one employed by many online poker sites recently is to simply ban those who win too much. This is exactly what the GG Network did in confiscating $130,000 from one Tobias Duthweiler. This player had previously been on this network before and had been banned for winning too much. Years later when he came back unknowingly through a different skin he ran up a profit of over $100K before the network noticed that it was the same player they had banned years back. They ultimately returned his initial deposit, confiscated his $130,000 in profit and dispersed it back to the players he had won it from. In their press release regarding this incident, GG cited Duthweiler's "bumhunting and predatory behavior" as the reasons for why he was banned and his funds taken. They further went onto state that he had only played on tables with the worst players, only giving action to said terrible players and would leave the table as soon as they stopped playing. Unfortunately such a practice is fairly commonplace in the online poker world and is not a recent phenomenon. The same model has been used by online sports betting sites to combat huge winners that use online computer modeling to give them an edge in placing wagers. Players on these sites are limited in how much they can bet, sometimes as low as $5 per wager, or they are banned altogether outright.
The other solution has seen its employment in the live poker scene as well as online sites. In this method rooms do not kick out nor ban winning players, but they rather adjust the rake and/or their rewards system in order to detract professionals who are more likely to play on low rake, high rakeback sites. There is no better example of this than what has occurred at Poker Stars and the changes they have made to their rake and VIP system over the last few years. Stars was at one point the friendliest site towards regular players who put in a high amount of volume. Their VIP system was well known in the industry as those who generated the most rake were dubbed "Super Nova Elite." I had a friend back in Las Vegas who had obtained such a status playing 20+ tables of $1-$2 NLH daily. When the calendar year was done and he had put in that much volume over the entire 12 months, he had amassed over $100K in bonuses alone. But seeing as how he had generated at least twice that amount in rake, it seemed like a mutually beneficial arrangement between both sides. But just as with other things being discussed in this article, all of this was during a time when poker was a much more popular game and there was no shortage of new players. But as this situation changed so did Poker Stars and a couple of years back Daniel Negreanu infamously stated in his defense of Stars' change in policy that higher rake was actually better for players. In his YouTube video Negreanu stated the logic of this action declaring that higher rake and a near non-existent VIP system would deter grinders from playing on the site and would make their games much softer. And while they did not outright ban winning players, their desired aim was the same namely to get these players off of their site.
Much of what we have discussed thus far lies in the world of online poker. That being the case it might be easy for some to conclude that the solution is to simply play live. But live rake is already worse than their online counterpart and is also trending upward. Outside of a few places such as Vegas where rake has remained largely static throughout the years, other parts of the world are employing systems of commission that seek to increase the amount taken in by the house. I have already discussed in past articles how in Asia the rake cap has steadily increased over the past 2-3 years. Factoring in the other costs of playing live, bad beat jackpot drops and the lack of rakeback live poker at many blind levels basically becomes unbeatable. Once again they are not banning players nor preventing anyone from joining their tables. But many live operators are now manipulating the rake in a manner that would deter any professional from playing and creating an ecology of those that play in a game they cannot possibly beat. Casinos and online operators are of course private entities and are free to run their businesses in any legal manner they see fit. But are these sites and rooms benefitting themselves in the long run or are they rather creating an environment in which the game cannot possibly survive in the long term?
Let us first tackle the issue of banning winning players. I think that sites overplayed their hand a bit on this issue with the recent worldwide corona pandemic. The truth of the matter is that online traffic soared during this time as players were forced to stay home and live venues remained closed. It was only natural that more would play online and this could have inflated the confidence of those that run these sites. It is easier to ban certain types of players in such an environment in which the player base is growing. But corona will not last forever and many live venues have already reopened with numbers once again taking a dip online. If the logic of banning winning players is that the operators would prefer an ecology of recreational players, the simple truth is that there just are not enough of the latter to justify such a strategy. Winning players are beneficial to online sites because they generate the bulk of the rake and because they can sustain themselves they continue to play. Losing players by nature are transitory and do not sustain the same consistency when playing online. In the end such players have to be constantly replenished in order to maintain the aforementioned balance between those that win and those that lose. But outside of a system in which a pandemic is forcing people to play online, these types of player are lacking in number in a manner that will not allow for such a replenishment.
For the same reason any manipulation of the rake in order to deter winning players will not work either. Any solution that seeks to eliminate or highly limit one important segment of the playing population will not work simply because there are not enough of the other segment. But beyond this there lies a fundamental and philosophical reason for why these solutions go against the very nature of the game of poker. The reason so many of us play this game is that it is supposed to be different from all the other games in a casino and the gambling realm. Whereas the house always has an edge in all pit games and players cannot win in the long run, poker is played against one another and potentially can be beaten by those who know the game well. But if winning players are being banned outright and systems are being put in place that make the game unbeatable, then poker degrades into a game that is no different nor better than any other casino game such as Black Jack or Baccarat. In fact I would argue that is exactly the point of these changes and implementations, namely to transform the game of poker into a casino game. I had the opportunity to run a game in the city of Sihanoukville here in Cambodia and there the casinos did not even hide the fact that this was exactly what they were doing. Unlike casinos in the West, venues in this city did not run their own tables. Rather they rented the tables to outside third parties and charged them rent in order to generate revenue. The casinos were nothing more than glorified landlords and it was those that rented these tables that really ran the games and dictated policy. The rents on these tables were often high but still appropriate for games like Baccarat as players had no chance of winning in the long run and thus they were able to generate a high revenue stream. Poker was often treated by the casinos in the same manner, as if they were just another table game. And so the rent on these tables were also exorbitantly high but revenue is generated much differently on a poker table. But in order to meet their monthly rent live room operators in Sihanoukville were forced to charge a very high rake to have any hope of making any money for themselves. Recreational players are not expected to beat the game of course, but in this scenario neither could a professional given the high amount of commission they were being charged. The fundamental problem with this is of course that the house, whether that be those that actually run the table or the casino that rents the table, are the only ones that generate a true revenue. And that is the very definition of a house game, where no one can win regardless of ability. Both good and bad players are melded together as one entity and the only one left standing to make money is the house.
So what then is the solution? Mason Malmuth, one of the founders of the popular 2+2 online poker forum, said something interesting many years back regarding live poker room promotions. He declared that running a successful promotion was not that difficult. A room should simply look around town, see what other promotions are running well in other places and then simply copy them. For this we do not have to look very far as a working model seemingly exists in the realm of online poker apps that have rose to prominence in the last few years. These apps run very differently from traditional sites and for them the key element to their success seems to be decentralization. Instead of being a monolithic entity these apps are divided up into unions, which themselves are comprised of several clubs who then employ agents to recruit players. And while some may scoff at this structuring system as some sort of pyramid or Ponzi scheme, I rather look at it as a much more efficient system in which new players can be recruited and money moved much easier. I mention the latter because that is a huge issue in the world of online poker and often a hinderance to the growth of this game. If a recreational player cannot get money in and out of a site, that player simply will not bother to play. But with the agent system matters are handled on a much more localized and personal level. Money is often handled in person or in close proximity, thus facilitating the entry of new and recreational players by making the entire process much easier. There is some risk of course to this model as the more levels there are to a structure, the potential for fraud exists at each level. But much like how the money is moved, such issues and threats are localized in this structure and does not involve every player. If a club goes under or if an agent decides to run off with player funds, only those that are directly under those specific entities are affected instead of every single player. We have seen too many times in the past when a monolithic and centralized site such as Full Tilt and Ultimate Bet go under and are not able to pay out the entirety of their player pool. But under a decentralized system such as the one employed by the apps, the damage is limited to a certain segment only and the remainder of the base remains unaffected.
The most important aspect of the agent system is that it seems largely successful in the recruitment of new players as the playing population on these apps have exploded in the last few years. Whichever method is employed, the goal of any operator should be the entry and inclusion of new players, not the exclusion of current ones. Other than the solution I have already proposed, both operators and players should work together to seek out new and creative solutions. I am a big proponent of more players promoting both the game of poker itself and the lifestyle associated with it on social media outlets such as Facebook and vlogging on public and popular mediums such as YouTube. As I previously mentioned the relationship between operators and players should be a mutually beneficial one and I do not see the game prospering in the future for either party if they cannot work together.
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Life in the Third World
Just a collection of random and not so random thoughts from my daily life here in Cambodia.