Playtech Chief Lends Weight To Rakeback DebateAugust 4, 2009 8:39 am
Danny Frishman, the head of poker at Playtech, has said that Playtech’s decision to ban rakeback from its site has been a major reason for the growth of the company’s iPoker network.
Frishman explained that many other sites opposed to rakeback had settled on capping and policing ‘linear percentages’ but Playtech had instead recognised the detrimental effect it was having on the industry and decided to ban it all together. He said:
“Giving players linear percentages from the rake they are generating creates a price war, reduces the bottom line to a minimum and does not incentivise loyalty. It is killing the industry by taking money from developing better platforms and promotion,”
“Our card rooms now focus more on recruitment of new players to grow the overall liquidity instead of circulating players between the different card rooms in iPoker, and we have players that are more loyal.”
The rakeback debate has been hotting up lately and last month saw an exchange of views between Peter Marcus, William Hill’s Online COO and Karim Wilkins, chief executive of poker loyalty site RakeTheRake. Peter Marcus had called for poker sites to get together and be strict on stopping affiliates from offering rakeback deals to their customers. Wilkins responded by saying the fault lay with the networks not having a clear rakeback policy with skins and allowing small time operators to cannibalise existing traffic by offering higher rakeback deals, and not the rakeback offered by affiliates.
Wilkins summed up the positive role affiliates play in the process by saying: “It’s the big affiliates who provide checks and balances for the whole system via self policing and caps, and it is they who can gauge what the players are after at the kickback level,”
Frishman’s response was that all new licensees were made aware of Playtech’s policies and ban and that any contraventions were strictly dealt with by the company so that they were not repeated. Frishman said he was, however, in favour of the ‘affiliate lifetime revenue share model’ as he believed it put the emphasis on affiliates attracting quality traffic as well as making it possible for operators to penetrate emerging and niche markets.
He did add that he believed part of that money too should go towards attracting and educating new players and that this would benefit poker rooms and ‘rakers’ alike. He explained:
“Maybe it’s better for these players to leave more of this money for the industry to invest in penetrating new markets and getting new players, because those grinders that generate so much rake and get it back will then be making much more money from winning from other players than they actually make from rakeback. So it’s also in those players’ interest that poker keeps recruiting a lot of new faces,”