Little Transparency from PokerStars, but How Much is Owed?

Alex Weldon : March 31st, 2016


Ever since the acquisition of PokerStars by Amaya, changes to the company’s business model have been coming at an ever-increasing rate. And I literally just typoed that as “ever-increasing rake,” because that’s essentially what most of those changes boil down to, whether in the form of direct increases or the scaling back of rewards.

Needless to say, very few active PokerStars players have appreciated the changes, especially those who rely on online poker to make their living. No one likes to see an increase in the cost of doing business, whatever their business may be. That’s especially true if they’re seeing no direct benefits in return, and don’t buy into assurances that there will be collective benefits to be reaped in the long run.

A lot of PokerStars hate stems from a naively selfish – childish, quite frankly – sense of entitlement on the part of professional players who’ve come to believe that their profitability is poker’s raison d’être. But even among those with a more balanced perspective on things – which includes most of my fellow journalists as well as a few more veteran or simply more self-aware players – one big objection to the changes has been the way in which they were made. In particular, the slashing of rewards for Supernova and Supernova Elite players this year was only announced at the beginning of November, a move which has been decried by nearly everyone not working for PokerStars as unethical.

Could have done more, but will they?

Although Eric Hollreiser, speaking on behalf of PokerStars, did admit that the company “could have done more,” little more than lip service was paid to the notion that this lack of transparency was a problem. It didn’t fool very many of the company’s critics, in any case, and the sarcastic #CouldHaveDoneMore hashtag has been a staple of subsequent Twitter attacks on Hollreiser and PokerStars whenever the company makes another unpopular change or faces unflattering headlines in the news.

Despite Hollreiser’s assertions that the company would adopt a “spirit of transparency” going forward, there’s little evidence that this is actually being done. The latest unpopular move made by PokerStars was a widespread increase in rake and tournament fees. Although this was announced in a matter-of-fact way, with little attempt to sugar-coat it, the blog post from Hollreiser was light on details about which games would be affected and exactly how much the rake was changing.

A lesson in corporate-speak

Although the post included graphs which purported to justify the rake increases in comparison with what PokerStars’s competitors are currently charging, some have pointed out that the presentation of that data was carefully designed to paint a rosier picture than a more impartial comparison would have. This is not surprising, of course; Hollreiser and the rest of his department are not being paid to make their company look bad, after all. Still, for anyone used to reading corporate communications, it was very clear that a lot of information had intentionally been omitted from the post.

The players themselves twigged to that this week, when tweets began circulating warning players of “unannounced” changes to tournament rakes. These were in fact part of the overall hikes announced last week, just not among those which had been explicitly stated.

Here too, the phrasing of the post made it evident that such covert changes would be taking place, as the list began with the statement “Key changes include…” This is a classic piece of spin, in that it’s legally sufficient warning that the list being given is incomplete, yet suggests to the reader that nothing terribly important is being omitted. One lesson for those who were taken by surprise, then, is that the word “include,” in this context, always implies that something else is being excluded.

Spin-and-Go jackpots now one-third as common

As far as the rake changes are concerned, I think that providing a partial list and indicating its incompleteness with the “key changes include” language is unfortunate, but totally par for the course when it comes to a company forced to announce something which has negative marketing value.

Much more surprising to me was another change, which I stumbled across while working on another article earlier this week. I’d written an article about PokerStars Spin-and-Go’s when the change was made from a 3,600x jackpot prize pool to 12,000x, so I remembered that at that time, the jackpot frequency had been set at three times in one million. When looking up the payout table for the special edition EPT Monaco satellite Spin-and-Go’s, I happened to notice that the regular ones were now only set to produce a jackpot one time in a million, or a third of the former rate.

Of course, the recent rake hikes did include a 1% increase in Spin-and-Go rake, and I’ve confirmed with PokerStars that it was at this point that the jackpot frequency was reduced. In fact, the drop in jackpot frequency equates to a 0.8% decrease in total payouts, meaning that the bulk of the rake increase is accounted for by this change, with the remaining 0.2% coming out of other payouts.

I find it unfortunate but not surprising that this fact was omitted, because it’s one that’s quite relevant to the recreational customer base that PokerStars is targeting. One of the most frequent justifications heard from PokerStars for the recent changes is that the exact amount of rake is only really of concern to people attempting to play professionally, who are in the minority; that, is a small bump in rake has minimal impact on those who are playing at a substantial loss to begin with. This is true, and a point I’ve made myself. That said, one thing recreational players do care very much about is the potential of winning a big prize, so slashing the number of jackpots awarded by a factor of three is a change they would probably want to be made aware of, and billing it as a simple 1% increase in rake is simultaneously truthful yet misleading.

The supermarket analogy

Although I am a transparency advocate in general, I can see a valid case to be made that PokerStars’s critics are trying to hold the company to a higher standard than other businesses in this case. As I pointed out on Twitter – and caught flak of my own for – we don’t expect the price tags at the supermarket to include a record of how they’ve changed over time, and have our attention called to anything which is more expensive than it was the last time we went shopping. Businesses advertise sales, but are quiet about jacking up their prices, so it’s up to shoppers to pay attention if they want to seek out the best deals possible.

That said, when changes are made which are both significant and hard to perceive, I can see why customers are likely to complain. Scheduled multi-table tournaments make the tournament fee quite clear, but PokerStars makes only the total cost of its Sit-and-Go’s obvious, while the prize pool/tournament fee breakdown is only available in the lobby of the tournament itself. As for the Spin-and-Go’s, the probabilities of spinning various prizes are not shown anywhere in the client that I can find, but only listed on the PokerStars website.

So, I’ll criticize my own analogy by saying that these kinds of changes are a little sneakier than just raising the price as marked on the shelves at the supermarket. Perhaps it’s more like dropping your package contents from 300 grams to 280 while keeping the bag the same size and providing no indication beyond adjusting the number at the bottom. It’s still done, and still legal, but unlikely to be appreciated by those consumers who do end up noticing.

What constitutes a significant change?

To be fair to PokerStars, though, they make a lot of changes, all the time. Most of these go unnoticed except by those they most affect; I’m not playing there anymore, but I was last year, and wrote a few articles about unannounced or minimally-announced changes and experiments that I stumbled across during my sessions. Most of these changes are things like adding and dropping tournaments from the schedule or adjusting guarantees, but for instance, the entire “n-Stack” tournament format was slipped into the lineup without any mention thereof until I noticed and reported on it.

Unfortunately, the nature of information is such that too much of it can be as obfuscatory as too little. If PokerStars were somehow compelled to publish all changes made to its offerings, they could simply slip the tidbits most likely to be unpopular onto the 23rd page of a long and tedious list of adjustments to guarantees, time bank allotments and start times.

It’s understandable that players would want the changes most relevant to them brought to their attention in a timely and transparent manner, but the problem is that one person’s irrelevant detail may be another’s game-changer. For example, most players would not notice a small change to time settings, but they could make a big difference in terms of when to start stall-folding for someone who plays a lot of multi-ticket satellites, or cause a multi-tabling player to start timing out on more hands.

Where’s that invisible hand at?

As a die-hard socialist, I’m usually the last person you’ll hear making free-market arguments, but I think there’s a valid one to be made here. If PokerStars and other sites are fulfilling the requirements laid out in their Terms of Service regarding the announcement of changes, yet that is still not enough information for would-be professional players to make informed decisions, then perhaps there’s room for a third-party service here.

After all, the industry has its equivalent service in PokerScout, which for a fee will compile historical traffic reports for the site of one’s choosing, broken down by game type, table size, hour of the day, or whatever else a competitor finds strategically relevant to know. Meanwhile, there are plenty of companies selling various tools and services to pro players; perhaps there’s a market for a website or piece of software connected to a real-time database containing the details of every major site’s offerings. Users could then perform searches to find the games and rake structures most suited to their grind, or subscribe to alerts for specific types of changes to the sites they play on.

As much as I’m an advocate for transparency, the truth is that our current economic system requires very little of it from companies. Until that changes, the best defense is not to assume more than is actually provided, or that any company has much interest in helping its customers to make fully-informed choices. In the case of regulated online gambling, it’s also important to know the extent of the regulating authority’s responsibilities and not assume that they’ve always got your back. The responsibility for being a smart shopper lies with the consumer, and if the complexity of this particular business is such that keeping tabs on everything is too hard, then there’s probably room for someone to make money facilitating that.

Alex Weldon (@benefactumgames) is a freelance writer, game designer and semipro poker player from Montreal, Quebec, Canada.

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