PokerStars Is Raising Its Rake, And Why It Can Get Away With It

March 22, 2016
PokerStars Is Raising Its Rake, And Why It Can Get Away With It

Monday was a pretty big day forPokerStars. After a two-year sojourn, the online poker site received final approval to operate from the New Jersey Division of Gaming Enforcement, but their New Jersey approval wasn’t the only news made by PokerStars on Monday.

It appears PokerStars may have used the positive news coming out of New Jersey to soften the blow (and coverage) for far-reaching rake increases they plan to implement on March 28 in their shared liquidity market.

Here are the rake changes PokerStars announced on Monday:

  • Spin & Go rake will be increased by one percentage point for buy-ins from $1 to $30 (two percentage points in $3 buy-in). $0.25, $60 and $100 buy-ins will not change.
  • In multi-table tournaments, PokerStars will match the practices deployed in closed liquidity markets where rebuys and add-ons incur fees similar to the original entry. These tournaments represent approximately 12% of the current main schedule.
  • MTT hyper-turbo rake will be increased to 5%.
  • Cap and percentage of rake will be increased in some no-limit and poy-limit ring games, mainly heads-up. Some rake caps will be lowered. Limit games will not be affected.

In its announcement, PokerStars also used a bit of verbal gymnastics, calling the rake hike a “price revision,” which is a word choice that would make Republican pollster Frank Luntz envious in its doublespeak. But the softened language didn’t escape the notice of the high stakes poker community.

Who is impacted the most?

Like the previous VIP changes, how big a deal this is depends on who you are talking to. As you can see from the above tweets, if you talk to professional poker players, they’re not very impressed by it, as the higher stakes games will be the hardest hit ($400 NLHE and up).

Furthermore, hyper-turbo MTT’s will see a 150% rake increase.

Rebuys and add-ons will now be raked, which could impact popular events like the $109 Rebuy.

And with the cap and the percentage increased in some games, there will be a significant increase to heads-up players, which seems to be a format the site is slowly phasing out, first with the removal of all non-Zoom heads-up tables, and now a rake hike for those that remain.

For the high-stakes professional poker community the changes could be the proverbial last straw, or at the very least, they should be seen as a clear signal to the professional poker community that PokerStars has moved on from them. The divorce is final, and PokerStars is already engaged to someone new — recreational players who will partake in poker, casino, sports betting and more.

For the vast majority of PokerStars players (their new fiancé to continue the metaphor), the rake changes will go unnoticed.

Rake hikes have been in the works for a while

This isn’t the site’s first crack at this. You may recall that PokerStars tried to raise the rake in late 2014, but later rolled back those changes following outcries from the poker community — which incidentally may have been the reason the community was so emboldened and dug in its heels when fighting back against the VIP changes in 2015.

What you will also notice is that all of the newly announced changes can be found among the more sweeping changes PokerStars tried to make in 2014. While not completely identical in degree and scope, the changes are quite similar:

Proposed Rake Changes in October 2014

Proposed Rake Changes in March 2016
Hyper Turbo tournament rake hike Hyper Turbo tournament rake hike
Cap and % of rake increased in HU cash games Cap and % of rake increased in HU cash games
Spin & Go rake increases Spin & Go rake increases
Rebuys and add-ons raked Rebuys and add-ons raked

How we got to this point and where we go from here

Unfortunately for the professional poker community, they’re discovering the other sites aren’t exactly welcoming them with open arms either.

Despite all the changes, PokerStars is still able to lay claim to being the friendliest online poker site when it comes to rake rates and VIP rewards, a problem that cofounder Adam Small believes the players brought upon themselves, posting the following series of tweets when the first rake hike back in September of 2014 was announced:

To Small’s point, if your town has five pizza parlors and four of them charge $11 a pizza for a mediocre pie, and only sell a modest amount of pizzas. On the other hand, the one that makes the best pizza charges only $9, and is busy pumping out pies open to close. In this scenario, do we fault them for raising their price to $10 or even $10.50? They still have the best pizza and the best price in town.

It would be better for everyone if the other pizza parlors improved their product or cut their prices, but since the majority of the town is so adamant about how good their competitor is, and how incompetent everyone else is, they have instead focused on selling other items (burgers or chicken fingers or subs) and pizza is merely an afterthought. They’ve given up on the pizza business, ceding most of the pizza market share to the one competitor that is head and shoulders better than them.

And so it is in the world of online poker. The‘s and 888‘s of the world have rounded out their products, and are content with the scraps of PokerStars online poker players they get.

To really effect change — and make these companies care about poker players — will take a seismic shift not on the poker side, but on the casino and sportsbook side. If PokerStars starts grabbing these customers, we may see their competitors start to make a better, cheaper pizza, and then PokerStars would have to follow suit.

As it stands, PokerStars has virtual free rein to set the market price.

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