One of the major topics for discussion for many in the poker affiliate market in recent times has been the subject of rakeback.
Over the last few years, one of the most talked about issues in the poker affiliate market has been rakeback. What started out as an incentive scheme to help affiliates convert and retain players has grown into a multi-million dollar business within the online poker market itself.
For anyone reading this article that is not familiar with rakeback in the online poker market, I will briefly describe what it is. Almost every poker site has an affiliate program that offers its affiliates some sort of revenue sharing on the affiliates-referred players. Most programs offer between 20% – 40% of the total rake generated by each player.
A rakeback affiliate recruits, converts and retains players by offering to give a large majority of this commission back to the players themselves. A non-rakeback affiliate will typically recruit players by more traditional means, such as SEO, banner advertising and media buys.Without offering an incentive like rakeback, the non-rakeback affiliate will typically send fewer players, however, they will retail 100% of the commission. Rakeback affiliates profit off of sheer volume, and large rake producing players.
Both business models can be extremely lucrative for poker affiliates. Unfortunately however, having both models exist cohesively in one overall market is not fair t Below are the fundamental is: up over the last few years in respect in rakeback.
The players are becoming
As long-time players progress to higher limits or higher rake dollars each month, many are starting to learn about rakeback through other players or the various Internet forums. For obvious reason, when a player learns about rakeback they want to take advantage of it. Unfortunately, if they signed up through a non-rakeback affiliate at some point, they are not eligible to receive this incentive form a new rakeback affiliate.
Here lies the problem; it is not fair that a loyal player who could potentially be raking thousands of dollars per month cannot receive the same incentive as a new player off the street. From a loyalty perspective, this is terrible for players and in reality is what keeps some players from not playing at a few of the largest poker sites. At the same time, it would not be fair to remove this player from the original affiliate who has been making 20% - 40% of the rake for several years. Likewise, it would not be fair to ask the original affiliate to give up their agreed upon commission percentage months, or years down the line.
When it comes to traditional affiliates, rakeback affiliates, and players, there really is no win/win scenario in sight. And whether we as affiliates agree or disagree with rakeback, it has become such a large industry that it is now the players driving it versus the affiliates. I hate to say it but the industry created this mess years ago by not foreseeing the consequences in having both business models working so closely.
There is a reason that no brick and mortar poker room offers third parties or offline marketers to give players a percentage of their contributed rake back each month.The Las Vegas casinos would never even think of introducing such a flawed business model.
As an affiliate and online poker player myself, I can see both sides of the issue, and unfortunately there is no easy solution or answer to the fundamental problems that the market is currently experiencing.The future of rakeback is very much a gray area. As you can imagine, the opinions of rakeback in the poker affiliate market are across the board. I went to the forums at PokerAffiliatePrograms.com and opened up a roundtable discussion with affiliates about "What the Future of The Rakeback Industry Is?" As you can imagine, some of the responses got quite heated. Below are just a few of the quotes from other affiliates on their thoughts about the future |pf rakeback.
"Rakeback should be removed completely. If there was no rakeback players would play anyway, so rakeback affiliates and rooms who give rakeback do a disservice to themselves by giving most of their earnings back." - 27offsult.com
“I think that poker rooms should give some form of rakeback by keeping good loyalty programs. It would decrease revenue from MGR (monthly gross revenue) in the short term, but incentive players to keep playing. It would prevent people from creating new accounts with other affiliates going after a 'better deal'." - Marcelo
“I think Rakeback is growing and growing, VIP programs In my mind are the same as rakeback, fast not as good. Sites take a percentage of their earnings and are giving it back to the player in some way by giving them a cash bonus or some other type of prize/bonus. Rakeback is the best type of bonus for a player, you earn every single penny you played for, and poker players are playing for one thing -MONEY." - FreePokerFind.com
“I think a huge problem is affiliates offering these Wk freerolls and rake races etc. The rooms put caps on rakeback, which is good, but then the big rakeback sites get around that by offering freerolls. This goes against the whole concept of affiliates not sniping each other's players. I'm a new affiliate and offer rakeback, but when these other sites can offer so much more than me, there's not much I can do about it." - PokerTrikz.com
Next we decided to ask one of the top producing rakeback affiliates in the industry what his thoughts were. So I caught up with Paul Nobles (also known as Beanie). Paul has been one of the largest rakeback affiliates in the market and has been managing rakeback since its inception several years ago. Paul gave some sound advice and 3 points on "how to fix rakeback":
"It is not fair that a loyal player who could potentially be raking thousands of dollars per month cannot receive the same incentive as a new player off the street."
JE: Beanie, how can the whole rakeback situation be fixed?
Beanie: I clearly like pain answering a question like this is in a publication, but here goes.
The problems that exist with rakeback these days are different to the problems that used to exist. A lot of that is due to us policing ourselves. But there comes a point where the card rooms will need to jump in and do something to fix the leaks in the foundation (however few they may be these days). Many of these I went over in the podcast on PAP radio. Some however, didn't come up in the show.
1. Rakeback should be automated - (daily is best, weekly Is OK). This won't just help rakeback operators, it will help your customer service departments that field a lot of questions like "do you have any idea when XYZ pays rakeback?" It also has the added effect of having affiliates focus on getting customers.
2. Stop allowing websites to compete with you on price - You see it all the time on 2+2. If a website advertises on a website that you advertise on, they should not have a better deal than you do. I think you can also put "clearing of the cookies Issue here"; stop allowing websites to have that on their sites. A simple rule should go like this:"if we can't do it, you shouldn't"
3. Take a cue from smaller websites - Give smaller affiliates the chance to get into rakeback. Competition is good for you, not bad. With the automated rakeback the issue of smaller affiliates stiffing players is nullified.You don't need to start them at the maximum percentage, but starting them lower than the cap allowed by the rooms forces them to go to bigger affiliates, thereby feeding the giant and making this situation worse.
As you can see there are many differing opinions on rakeback just within the poker affiliate community. Likewise, each operator has a different idea on how to control rakeback. At the end of the day, we have to remember that as affiliates, our customers are the players themselves. Regardless of what happens in the future, our customers are the ones that should get priority and be taken care of. At this point, it is up to the poker site operators to come up with a solution that is both fair and equitable for all the parties involved.
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Rakeback is a relatively new concept in this field.This will enables the players to get some money back.
This is quite a highly interesting post that sure got my attention. Personally, I am also into this “rakeback” business. I am earning profits from such and I should say that rakeback is favorable to both parties, players and player rooms. Both is just as essential as the other. If players are reaping additional income from rakeback, player rooms are continuously earning as well because they have regular players and more new ones joining them. I also agree that with or without rakeback, still people play poker. Hence, rakeback is not something to be despised of, rather, we may as well consider it a bonus.
You know with all the great things that rakeback sites provide.
Like rake races,Free cash,The rakeback,and all the other promotions.
That there is still 65% of online players that are not signed up to
get there rakeback,Look people its FREE CASH! yOUR Playing anyways .