Monopoly

Edit: As of today Pokerstars announced that in response to player outcry they will be removing the rake changes but keeping the VPP distribution change to WC. Yes, this means that after them essentially saying "we're going to take back 25-50% of your rakeback but give you ~5% less rake" their answer to appease the player backlash is to cancel the 5% less rake. I have absolutely no faith that Pokerstars is being run by anyone remotely competent in light of this. At this point, things have just become insulting.

Good things very rarely come of one organization monopolizing a given space. Pokerstars is coming very close to having a true monopoly in the online poker world following after the demises of FTP and UB/AP.

Even before their most significant competitor blew itself up due to mismanagement of epic proportions, Pokerstars started pushing the envelope a bit to see what it could get away with in terms of reducing the effective rakeback of its high volume grinders. The VPP changes of 2010 are a prime example, and post Black Friday, the SNG rake changes.

Today, Pokerstars announced its VIP program changes for the new year. Without going into detail (which can be found many other places, 2p2 especially), in moving from a "dealt" to "weighted-contributed" distribution model for VPPs they will be reducing the effective rakeback (and thus bottom line) of nearly every single non-recreational player who primarily plays 6max or FR NLH (and likely PLO as well). While the VPP changes of 2010 may have given us FR grinders a ~5-10% hit in this regard, the changes set to go live in four days time appear to be reducing the effective rakeback of a typical grinder in my games by 20-50%. Pokerstars emphasizes that the VPPs being taken from said players will be given to the looser recreational players in the games. While this is the case, what they do not mention is that these players are almost all between Bronze to Gold Star VIP status, thus earning far less FPPs than the grinders who are basically all Supernova or SNE with large modifiers. Pokerstars then pockets the difference, which will end up being a hell of a lot of money. I must also add that their rake calculation model is being changed as well at some stakes, with it decreasing a little at micro and small stakes. Based on early number crunching it looks like this may reduce the total amount of rake paid by a FR player by ~5% at small stakes, which is not trivial but does not come close to making up for the money heading the other way.

What bugs me the most is how deceptively worded the announcement was. Additionally, Stars made said announcement 4 days before the start of the new year - this is not adequate warning. Finally, in the announcemnt they addressed why they chose not to instead go to a WTA (winner take all) model which would have made less of an impact on the bottom lines of their high volume players. They stated that these people would not appreciate the "VPP variance" associated with such a model. This is a flat out lie, and there is absolutely no way anyone with a reasonable grasp of the situation would think otherwise. Every single one of said players would prefer a WTA model, as you would be taking significantly less money from them.

I understand that Pokerstars is a business, and they have every right to do what they are if they think it will improve their bottom line. My personal feeling is that they believe when regulation in the US and potentially other countries occurs, their market share is going to be reduced significantly and are trying to make as much as they can now before that day comes. I fear this approach may be significantly short sighted.

In response, players are planning to mass sit out on January first, blocking games from running and cutting into Pokerstars' bottom line. I expect any response to this will be a concession that Stars has already planned in order to save some face, as they could not possibly expect to make changes like this without severe backlash from their player base.



The upside for myself personally is that the state of the games lately has made it more profitable for me to focus on playing less tables (typically the 12-16 range) to maximize winrate. These last couple months, 75%+ of my profit has been from table winnings alone. While I will be punished for being on the tighter side, I go to showdown a lot more and 3b less than many regulars, which should help under the new system. Some regs who play significantly looser than I do may actually be hurt proportionally more by the changes due to their preflop tendencies. We'll have to wait and see I suppose. If things don't change, maybe I'll be motivated to deposit a bankroll on some softer Euro sites and mix volume there.