#224: “First They Came”

First they came for the Supernova Elite bonuses,
And I did not speak out,
Because I do not and will never have the work ethic to get Supernova Elite.

Then they charged a vig on currency conversion,
And I did not speak out,
Because I live in the Eurozone.

Then they doubled the rake on cash games,
And I did not speak out,
Because I only dabble with cash.

Then they came for extra reg fees on bounty and rebuy tournaments,
And I play loads of them,
So, in the words of cultural commentator and lyricist Lil Wayne…

‘Fuck you, fuck you nigga, mothafuck you!’

If history has taught us nothing else (and it probably hasn’t), it’s that people in power will impose egregious taxes on the people over whom they have power. Between the 10th and 12th centuries, English landowners were forced to pay ‘Danegeld’, a tax that was, in essence, protection money extorted from them by their Viking invaders. In the 14th century, Murad I of the Ottaman Empire introduced the practice of ‘Devşirme’ (a blood tax, literally meaning ‘collecting’ in Turkish) whereby Christian families living within the state had to offer up one son to the army. The boys were forced to convert to Islam and became the property of the sultan. In 1535, Henry VIII of England introduced a ‘beard tax’ as did his daughter Elizabeth I during her reign. In 1724, Peter the Great brought the same ridiculous tax to the Russian people, creating a copper ‘beard token’ as a receipt for those who had paid 50 rubles per year for the privilege of wearing facial hair. In the early 1800s, women of the ‘lower’ castes in India had to pay a tax called mulakkaram (translated literally as “breast tax”) if they wanted to cover their chests in public. Effectively making modesty a privilege of upper caste ladies, this tax rate was high and varied according to the size and attractiveness of the breasts in question.

Companies with near monopolies wield their power over consumers similarly. Remember the 1998 United States v. Microsoft Corporation antitrust case when Microsoft were accused of abusing its monopoly power on Intel-based PCs in its handling of OS and Web Browser sales. Isn’t that a little like Pokerstars bundling the skill game of poker with a lottery-style slot machine format in Spin N Gos, forcing the poker consumer into higher and higher variance situations whilst raking games with faster and faster structures at bigger and bigger rates?

In the US, more than 80% of corn and more than 90% of soybeans planted each year are attributable to the GM food giant Monsanto and according to the US Department of Agriculture’s Economic Research Service, the average per-acre cost of corn seed and soybean increased 259% and 325% respectively between 1995 and 2011. This corresponds to the time period when acreage of GM corn and soy grew from less than 20% to more than 85%. Farmers simultaneously had their margins squeezed by Monsanto through the elevated cost of their weed-killer Roundup. For example, between December 2007 and June 2008, a lack of competition and innovation in the marketplace reduced farmers’ choices and enabled Monsanto to raise Roundup prices by 134% unencumbered. Are we seeing something analogous from Pokerstars as they simultaneously increase rake, reduce loyalty bonuses and introduce vig on conversions? Will the pro poker players be akin to the farmers who were hit on all sides, their margins squeezed so excruciatingly tightly that many were put out of business? Will the distinct lack of innovation and vision from the likes of Party, 888 and iPoker limit the poker player to a false choice between Tilt, Stars and French Stars? Even if one of them gets their act together, isn’t it likely that they too will be bought by Amaya?

Pokerstars are claiming that the price of poker needs to go up because it is expensive to innovate their product, fund marketing campaigns in new territories and (presumably) hire lobbyists. Isai Scheinberg may be sitting in a room spraying his $4.9 billion for silverfish but he left Amaya a company that makes half a billion dollars per annum! So, why target players for additional rake and upset the eco-system? The reason is simple. They are doing it because they can. The beard tax lasted in Russia until 1772. Danegeld ceased in England in 1194 but was immediately replaced by carucage, a land tax introduced by Richard I. I guess the lesson there is if the Vikings don’t rob you, your King will. Do not underestimate what people will tolerate. Devşirme lasted 500 years and was only abolished in 1828 to subdue a Christian uprising. The mulakkaram was abolished in 1803 but only after a woman named Nangeli bled to death after cutting off her breasts and presenting them to the tax collector in protest. Pokerstars is now part of a publicly traded company with a corporate structure and a corporate ethos. There’s no way around that. It was built on the principle of providing a good service and being loyal to its customers. Now it’s loyalty is to its bottom line.  So, the only way we can change Pokerstars’ policies is by acting in a way that has an effect on its bottom line.

Amaya are gambling that we won’t.