#222: “Pokerstars: Under the Microscope”
Dale Philips wrote a comprehensive trip report last week on the UKIPT/Estrellas Marbella festival in which he levied numerous charges against his former employer. Firstly there was an issue with the casino wanting him to cover up his legs but I’m pretty sure they were just acting in the best interests of the other players who would have been distracted by his manly Scottish calves. Secondly and more importantly, he broke down the costs of such a trip, both as a business expense for the pro and a holiday/experience for the recreational player. The maths? Well it simply doesn’t add up. Even more so for his other example – the upcoming UKIPT London:
“For a week-long stay in the cheapest room of the cheapest hotel (£190 per night) you’d be paying around 1.73x the price (£1,330) of the main event buyin (£770) just for a bed to sleep in each night. If the only reason that you went to London was to play that event then your long term expected ROI in the tournament would have to be 173% in order break even from the expense of the hotel. That’s without even considering the cost of flights, trains, taxis and eating out.”
Live poker just isn’t a long term profit-maker at those stakes so I justify it thusly? As a satellite grinder, it actualises equity from weeks, sometimes months, of online play. As a vampire, it gives me the chance to get out of the house during the day time (admittedly to then hide from the light within the walls of a darkened casino or hotel function room), mingle with friends from the online circuit and play live which is itself a novelty when your used to taking 0.5 seconds per decision and not being particularly invested in any one tournament. As a lover of travel, it gives me the opportunity to combine work and play with a dozen or so 5-7 day trips to (mostly) nice locations (not Nottingham) throughout the year. As a competitor, commitment to one tour can sometimes mean a Leaderboard sweat and the added incentive to battle for the additional equity therein. In short, live poker offers some balance within what I do for a living, in the same way that coaching and staking bring some diversity to the poker slog.
Pokerstars seem to get that. They understand that a live circuit creates a buzz, some outlier winners to celebrate and some talking points to keep the public’s interest alive. They run many of these circuits on a break-even model and have often lost money at individual festivals. Also, the players would rake substantially more for them during 5 days of online play than they would at a live festival. So this aspect of poker in isolation is not about money. It’s about synergy. It’s about punctuating the year with events that are both promotional vehicles and welcome distractions for the players whose yearly grind needs to have multiformity.
The reason that Pokerstars (including Full Tilt and their regional skins) enjoy a supremely dominant position in the poker world is because they are the best at what they do. Being the best in any industry means not just knowing what the customer wants but also knowing the next thing that they are going to want before they even know they want it. Pokerstars built their brand through the poker boom, recognising the importance of a live presence as both a promotional tool, a TV content provider and a thing in itself. They navigated Black Friday, emerging stronger than ever, having restored (as best they could) public faith in poker by absorbing Full Tilt’s debts. Since then, they have pushed the game aggressively in new territories, creating even more regional tours, solidifying their position as the only true multi-platform poker provider, making their name a likely synecdoche for the game for future players.
So, as industry chipleaders, it’s unsurprising that Pokerstars come under the microscope from time to time. And well they should. Historically, companies do not behave well in such dominant positions. Will the rake go up? Will the loyalty schemes dis-improve? Will customer service drop in standard? The original owners have just sold out to the Canadian Gaming giant Amaya so it’s easy to see why some people are worried. New management often bring their own ideas, their own desire to streamline costs and a bigger picture bottom-line mentality. Time will tell if Pokerstars continues to chip up. Or maybe they will spazz in some key spot down the road. The important thing is that the public cast a critical eye over all aspects of their relationship with their poker provider and pieces like this one from Dale will encourage that. I may be able to justify these trips but others may not.