The PokerStars Changes are Really About Control
Over the weekend, PokerStars announced its most controversial round of changes to date. Already, some are calling it the beginning of the end for online poker, while others are hailing it as long overdue. However one feels about the changes, and whatever their ultimate impact, they’re certainly something that will change the online poker landscape quite dramatically and be talked about for years to come.
A declaration of war
Ever since the takeover by Amaya, PokerStars has been making significant changes on what feels like a monthly basis, many of them unpopular with the community of online professionals. The relationship between the two has been steadily souring as a result, and although PokerStars attempted to take a friendly, positive tone in announcing the changes, it’s very hard to see them as anything other than an outright declaration of war against pros in general, and the highest stakes and highest volume players specifically.
The changes are set to take effect as of the beginning of 2016, and will include the following:
- The ceiling for VIP Club rewards will be reduced to 30% of contributed rake, massively reducing the value of Supernova and SupernovaElite status (players earning SupernoveElite status in 2015 will get 45% in 2016, but this too will drop to 30% in 2017 and beyond).
- High stakes cash games will not award any status points (VPPs) whatsoever.
- The current reward points (FPPs), the value of which varies depending on the spending player’s status and what they’re spent on, will be replaced by a new “StarsCoin” currency, with a fixed value of $0.01 per point. All other forms of reward (e.g. Milestone and Stellar Rewards) will be discontinued.
- Additional restrictions will be imposed on third party software, on top of those which came into effect last month.
Overall, the effect of these changes is to chop the top off of the rewards pyramid and thereby render it impossible to make a living through rewards alone. PokerStars acknowledges as much in its explanation for the changes, stating that “our VIP Club rewards have become so enticing that we have inadvertently altered why some people play and how they play.”
Did @pokerstars wait for the right time to make all these changes or should they have been made say 3 years ago when it was freq. discussed?
— Kim Lund (@InfiniteEdgeKim) November 1, 2015
Shooting the hostage
Personally, I don’t believe for a minute that high-volume multi-tabling was an unintended consequence of the VIP Club rewards system. What other effect could a steeply progressive rewards system with a hard cutoff for the most valuable incentives generate, other than to encourage players to increase their volume in pursuit of those rewards, even at the expense of direct profits? No, that was clearly the intent, there was just a lack of planning when it came to the side-effects of that grinding.
What was probably unforeseen was that rakeback grinding would necessitate a mechanical playing style and therefore drive professional players into the formats most suitable for such play – hyper-turbo Sit-and-Go’s and low-stakes cash games – which also happen to be the formats most appealing to the average recreational player. That, combined with the fact that each of these rakeback grinders is playing many tables at once, leads to an experience for the first-time player which is both short and unpleasant.
Moreover, the combination of high volume and low edge means that rakeback grinders are extremely sensitive to even small changes in the system by which they earn their living. At the same time, they’re responsible for a disproportionate amount of the rake generated for the site, so displeasing them has real consequences. So long as PokerStars was concerned with keeping these players, it was stuck in a hostage situation, unable to make changes to its own rewards system without inciting a revolt.
Chances are that PokerStars will in fact suffer short-term losses as a result of these changes, having driven away that small percentage of players who were producing so much of the overall hand volume. To my mind, this is what’s really going on: PokerStars is shooting the hostage along with the hostage-taker. It is voluntarily bringing about the exact consequences that it has continually been threatened with, in order to wrest power back.
A power grab, not a money grab
One way that it’s possible to see this is by the fact that PokerStars has not significantly increased the direct rewards given to lower-volume players. All of the lower VIP Rewards tiers will be unaffected, except for ChromeStars players, who will see a boost of “up to” 10%. PokerStars has attempted to frame this as an overall flattening of the rewards program rather than a decapitation of it, but an increase of 10% to the meager sums awarded to players of this tier amounts to less than a dollar per month per player. As many ChromeStar players as there are, this comes nowhere close to matching the decreased payouts to the Supernovas and SupernovaElites.
That has led to accusations that PokerStars is not “robbing from the rich to give to the poor,” but rather just “robbing from the rich to give to PokerStars.” A blatant cash grab, in other words.
Stars implies a "take from the rich, give to the poor" approach, but will skip the "give" part AFAICT. The obv spin is what bugs me (2/x)
— Phil Galfond (@PhilGalfond) November 2, 2015
While this way of looking at it makes more sense than PokerStars’s version, neither is quite true, because in addition to its fixed rewards program PokerStars runs a huge number of limited-time promotions, which do serve to put tons of money into recreational players’ accounts. For instance, last month marked the one year anniversary of the introduction of the Spin-and-Go format, and as a limited time promotion, PokerStars allowed players to opt-in to daily missions to receive a ticket worth $0.50 (90% of the time), $5 (9.9%) or $100 (0.1%). The missions were trivial to complete, and the overall statistical value of such a prize is a little over a dollar, so a typical ChromeStar player taking advantage of the promotion every day would be receiving as much value from it as from several months of standard rewards.
The frequency and value of such promotions has been increasing steadily over the course of the Amaya era, and I imagine much of the money saved through eliminating the top-tier rewards will in fact be redistributed, just through these kinds of promotions rather than something fixed and persistent. This, in turn, means that PokerStars is claiming for itself the right to dole out reward money at a time and in a manner of its choosing, which gives it an enormous amount of control over its own ecosystem.
The value of power
The value of power, of course, depends on who wields it and how. Compared to the many people who are up in arms about the changes, and the many others who applaud it as the only way to achieve sustainability, I myself am pretty ambivalent.
I certainly don’t think that the existing situation was any good; keeping a site’s decision-making process shackled to the wishes of a small percentage of people who are effectively gaming the system is clearly not good for the ecosystem. In order to have any chance of balancing the ecosystem, a site needs to have control over the relevant tools: game offering, rake, rewards and promotions.
At the same time, I’m a stalwart advocate for transparency, and PokerStars in the Amaya era has not earned my trust in that regard. For one thing, it’s pretty ugly that the changes were only announced at this point in the year, because of the impact they’ll have on people who were promised certain rewards next year, for the volume they played this year. So, it makes me nervous not knowing how much of the extra money they plan on spending on promotions, nor how and when that will happen.
I’m also not convinced that PokerStars actually knows the best way to spend the money. If it were spent giving away tons of Sunday Storm and Sunday Million tickets to recreational players, that would indeed be good for everyone… but what we’ve seen this year is a lot of focus on promoting Spin-and-Go’s, especially those with million-dollar jackpots. Even the world’s biggest degenerate isn’t likely to churn a full million back into the ecosystem, so although these huge sums are good for marketing purposes, they still represent a huge amount of money coming out of the game, rather than into it.
The ideal, of course, is for a site to consult with and inform its players as part of the decision-making process, while the players accept the site’s right to adjust things as it believes necessary. These changes ultimately stem from a breakdown of trust on both sides; what PokerStars does with the power it has gained as a result will determine whether that trust can ever be restored.
Alex Weldon (@benefactumgames) is a freelance writer, game designer and semipro poker player from Montreal, Quebec, Canada.