Don’t Blame Rakeback for “Britain’s poker boom folding”

In reference to an article published by the Independent this morning titled: “Is Britain’s poker boom folding?” rakebackpoker would like pick up on a few points raised.

Recently we published results that in fact online poker as a worldwide operation has experienced a healthy growth in traffic and that despite the economic downturns and legal issues in the US, online gambling is one of the few industries to remain buoyant. PokerScout.com reported a 5% growth in poker traffic this week.

Like with any booming industry a sharp rise has to at some point plateaux at which point operators are faced with the task of consolidating their success and building sustainable foundations on which to base future growth strategies.

What Rakebackpoker.com finds frustrating is that every time a report is published which indicates any downturns in the online poker industry; some experts use the opportunity to damn rakeback as the root cause.

This is a snippet from the original article which you can read in full here

“Paul Leyland, gaming analyst at Collins Stewart, says the industry certainly faces some significant headwinds.

“The problem you face with poker, as opposed to other forms of gambling, is that you need volume to make the model work. You can’t just focus on high rollers, as you might with a sports book or a casino. You have to bring volume in to supply your higher rollers with people to play.
“What that does is drive up your costs and reduce your yields because you have to incentivise people to sign up. This favours operators who already have customers to whom they can cross-sell, like a William Hill, for example. They can acquire new poker players at a lower cost.”
He also points to the impact of the recession, but also notes that the players who were signed up a few years ago, when poker was the latest craze, now have wives, and families. They just don’t have the time to invest in staring at a screen playing poker. At least if they want those marriages to last.

Matt King, senior leisure analyst at Mintel, also sees the recession as a major issue. “Around a third of poker players now play less often or for lower stakes because of the economic downturn,” he says. But like Paul Leyland, he also sees structural issues. “Rakeback promotions, for one thing, are minimising margins, and this shows the emphasis is on customer numbers, not the profit generated per customer. Lack of time is another factor impacting on play, possibly suggesting work pressures in the current recession are having a toll on players’ free time.”

RaketheRake and the Rakeback Partners Network (which Rakebackpoker is part of) is the largest and most trusted provider of rakeback in the world. Karim Wilkins who is CEO of RaketheRake provided this statement in response to the article.

“Unfortunately analysts like Paul, while they have a good understanding of the market as a whole, are prone to bandy around terms like rakeback when not really understanding the mechanics of exactly what rakeback is otherwise they would realise that it is merely a retention tool like any other used by the rooms to hold on to players. Rakeback is just part of the family of bonuses, loyalty points, freerolls, live event tournaments, rake races etc. Singling out rakeback is irrelevant. The poker market is crowded because there are too many poker skins given out willy-nilly by the networks. As such Players have a wider choice (including many unsafe rooms) and rooms are having to spend more of their profits to retain the players using any tools they can. So what Paul means to say is “Retention promotions, for one thing, are minimising margins” – Karim Wilkins

The popularity of poker in the UK can surely be quantified by the number of major poker events which have been staged this year. The WSOPE, PKR Poker in the Park and The English Poker Open, whom RaketheRake were the main sponsor, are a few examples.

So what are your thoughts?

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