Online Poker Rooms Banning Winning Players?

Jacob Perez : January 4th, 2010

As the online poker industry has become more competitive over the last decade, rooms have resorted to all sorts of interesting measures in an attempt to remain both attractive to all players and also profitable.

It seems one network has now decided that those goals are mutually exclusive.

That’s the conclusion one could reach from recent news that the iPoker network is forcing some skins to close the accounts of winning players. The skin in question: VC Poker, where numerous players received this email (a presumably unpleasant way to start the new year):

“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”

The move is apparently part of a larger strategy on the part of iPoker to make their cash games more attractive to casual players.

This isn’t the first step by iPoker in this direction, although it is the most headline-friendly; last month the network gave skin Blonde Poker three months to find a new network. Was Blonde poaching players or offering an illicit rakeback deal? Apparently not – their crime, according to reports, was having too many winning players.

Say what? If you fail to grasp the logic involved in that calculation, Bill Rini has a good blog post explaining the flaws inherent in the skin model that are likely driving iPoker to adopt these seemingly draconian policies. Excerpt:

The smaller skins on their network have contracted down to a hand full of sharks who generate the room’s monthly nut. The rooms making the big money (those in the 20% bringing in 80% of the revenues) are getting angry that the money they’re investing in bringing in new players gets sucked out of the system by those other rooms but the smaller rooms have no other option. They don’t make enough money to be able to run effective marketing campaigns and they don’t have sports book customers to cross-sell. I’m sure they would love to be sending huge fish into the pond but they don’t have the resources to do it.

iPoker isn’t alone in their operational philosophy. For those who think iPoker is pursuing this policy as a unique result of their legacy issues with player poaching and rakeback, consider what Bodog Network VP Jonas Odman told EGR back in September about Bodog’s plans for creating a network with a rake structure that, from the word go, would essentially penalize skins that brought in winning players:

“Operators who bring in losing players [will] make significantly more money than today. 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”.

According to an anonymous source who works with an Ongame skin, that network will be implementing a similar method for classifying players based on their net win and adjusting affiliate / skin revenue along that classification within the next few months.

Will such a system become the standard for rooms that operate on the network model? If it does, will major standalone rooms such as PokerStars feel pressured to respond by crafting their own incentives for losing players? We’ll keep you posted.

Thanks to Tight Poker for the heads-up on the VC email.

Full Tilt Poker won’t shut down your account if you win too much. If you’re thinking about signing up for FTP, don’t make an account until you read this.