PokerStars and Rakeback Grinders: the Messiest Breakup – Part I

Alex Weldon : December 10th, 2015

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Breakups are tough, and they can be tough in a lot of different ways. Sometimes the partner doing the breaking up isn’t entirely sure that’s what they want. Sometimes the other party doesn’t want to accept it. There can be a lot of blame thrown around, and sometimes other people can get dragged in. If there’s such a thing as a good breakup, it’s hard to find one, but to the extent that they can be manageable, communication is usually the key.

This post largely concerns a PokerStars announcement you can read here, for context.

PokerStars is currently going through a particularly rough breakup with a certain subset of its players – that is, their highest-volume segment, who’ve been relying on the various forms of rakeback and rewards offered by the site. It was a happy union for a time, during the boom years: Money, in the form of recreational players, was flowing into the system on a steady basis, and the sites’ key concern was to deal as many hands as possible. Professional players were naturally the most willing to play tons of poker, so PokerStars offered them substantial incentives to play as many hands as possible. It was win-win.

But the concept of “for better or worse” doesn’t exist in a capitalist marriage. The win-win arrangement PokerStars had with these players hinged on outside factors, and when circumstances changed, the relationship stopped working for PokerStars. A breakup was inevitable.

The worst breakups are often those which come out of the blue for one party. It’s one thing when things have been on the rocks for a time, and it’s only a matter of who is first willing to say “enough.” It’s quite another when one partner thought the two of them still had a good thing going, and suddenly finds the rug pulled out from under them. That’s very much the case here, because the rakeback grind was still hugely profitable for the players employing that strategy, up until PokerStars changed things such that it will no longer be profitable in the future. They thought everything was fine, and now they’ve come home to find the locks changed and their belongings sitting in a pile on the street.

Hollreiser’s epic trolling

As I said, communication is the key to a manageable breakup, whatever the other difficulties. And this is where things have really gone off the rails, because the rakeback grinders are people, and PokerStars is not. PokerStars is a corporation, and a corporation is a legal construct. It can’t speak for itself, it has to go through a middleman. The middleman in this case is Eric Hollreiser, the Vice President of Corporate Communications at PokerStars. And if Hollreiser’s goal was to play the role of the passive-aggressive new boyfriend, smirkingly explaining to the old boyfriend why he’s out on the street and suggesting that he “chin up”… well, then he’s playing that role just about perfectly.

The reaction of the affected players – Twitter abuse, forum rants and boycotts – can’t be said to be mature or level-headed, but it is entirely understandable, because these are people who are now effectively out of a job. Their prospects going forward are also limited, because although these are highly intelligent people, society does not, in general, recognize “professional poker player” as legitimate work experience on a CV. Let’s not forget how suddenly this happened, either; it’s been less than a month since the changes came to light, and they’re going to go into effect on January 1. These are people in legitimate distress.

Hollreiser’s contempt and lack of basic human empathy for these players has been palpable from the start. It’s obviously his job to put a positive spin on things, so I realize that he can’t simply tell it like it is… but if you read the intent between the lines of things he’s said, it’s clear that he sees the affected players as toddlers having a tantrum because their lollipop has been taken away, rather than adult human beings suddenly finding themselves deprived of their livelihood.

When Steve O’Dwyer tweeted the Game of Thrones “shame” meme in relation to the PokerStars changes, Hollreiser’s response made it clear that he sees things as all fun and games, and doesn’t understand how difficult the protesting players’ lives are about to become.

This attitude from Hollreiser has been carried forward into his latest blog post at PokerStars, offering further details about the changes we’ll see in 2016. If you’re reading this as someone not directly involved in the situation, it may seem fairly innocuous, but allow me to offer a paragraph-by-paragraph breakdown of how he seems to be delighting in twisting the knife.

He begins by announcing that there will be four million-dollar freerolls for PokerStars players in 2016. What he’s actually saying, however, is that the four million-dollar freerolls which have existed for many years for high-volume players will now be open to the general player base. This isn’t new money PokerStars is adding to the ecosystem, it’s just money which was previously given to high-volume players and is now being spread around. In fact, these tournament are likely to attract such a large player pool – six figures, I’d wager – that it will no longer even be worth the time for professional players to enter, as the equity per player will be under $10 for a day-long time commitment. Thus, the actual message is not a token of reconciliation, but “look who I’m now giving what I used to give to you.”

The next paragraph begins with an apology for how tough 2015 has been for poker players, yet immediately segues into an excuse about exchange rates. Again, the actual truth lies between the lines. Whenever poker is played, dollars are exchanged for chips, so the currency involved is mostly irrelevant. However, PokerStars used to offer players an essentially free-of-charge currency conversion service, so long as the money involved was going to be used for poker. That was changed this year, and PokerStars now charges a premium on currency exchanges, despite insisting on offering most of its games in the currency of one of the few nations which is completely barred from playing on its site. Forcing every single user to convert money into a currency not their own and then charging a premium on that conversion is the actual issue, not the strong US dollar.

In paragraph three, he mentions the boycott which took place from December 1 to 3, and takes pleasure in pointing out that overall traffic actually rose through that time. Resistance is futile.

He then clarifies that the boycott was not unnoticed. You’re all very important. Patronizing smile, pat on the head.

Paragraph five gets close to the heart of the problem: communication issues. The affected players are angry for a number of reasons, but more than anything else, because the changes were only announced in November. Hollreiser points out that it was mentioned throughout 2015 that there would be changes. Significant changes. This is true, but telling people to expect changes is hopelessly vague. A partner who keeps saying “we need to talk about us” may be a warning sign of things to come, but that doesn’t mean it’s not a shock when you finally find yourself turfed out.

Paragraphs six, seven and eight: It’s for the best, really.

Paragraph nine: She did a lot of thinking to come to this decision.

Paragraph ten: The decision is final.

Paragraph eleven: Trust me, change is good.

Paragraph twelve: I get that you don’t like it.

And then, finally, saving the most hurtful blow for the end, he discusses the actual effects of the boycott. Having these players voluntarily remove themselves from the site produced exactly the effects that were expected and desired. All the metrics PokerStars has been using to get a handle on its ecosystem were improved when these players stopped playing.

She’s glad you’re gone. She’s doing well without you. Please don’t come back. Just letting you know, “in that spirit of transparency.”

All of this is likely true, and I’m generally in favor of the changes. I don’t disagree with anything PokerStars has done, except that I think they should have informed everyone earlier. Sometimes a breakup is necessary. But I don’t think Hollreiser is doing a good job of mediating things at this moment and, to be honest, I’m starting to dislike him on a personal level.

Next: Negreanu as the child caught in the middle

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

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