Are PokerStars’ Latest Policy Changes Reasonable?

Posted on October 31, 2014

Much to the chagrin of its high volume players, industry leading PokerStars has announced forthcoming changes to its rake structure and promotional schedule, many of which will have a noticeable impact on high-volume grinders’ bottom line.

Throughout the past several months the company has instituted a variety of cost cutting measures. And while decisions to cut inactive affiliates, consolidate its pro roster and blur the line between poker and gambling haven’t sat particularly well with players, the latest changes were met with the full wrath of the poker community, with the majority directing their frustration at new owner Amaya Gaming, who took the reins in early August.

An overview of PokerStars’ recent policy changes

The majority of the latest policy amendments will primarily impact high-stakes cash game players and high-volume SNG grinders, while casual and recreational players may not even notice.

Battle of the Planets promotion to end

Effective November 2, 2014 the popular Battle of the Planets promotion will be no more.

Author’s thoughts:

Battle of the Planets awarded the site’s best Sit and Go grinders across all stakes and commitment levels with the opportunity to pad their bankroll via added cash prizes. Its removal is, in my estimation, the most nonsensical of the recent policy changes.

Yes, in the immediate, the company will save in excess of $2.5 million per year, but who’s to say that savings won’t be more than offset by player liquidity losses? Deterring high volume players from participating in Sit & Gos, especially now that the company will be making more money, on average, per Sit & Go, doesn’t seem like a wise business practice.

Cash game rake amendments

The rake cap for Heads-Up NL/PL games ranging from $.25/$.50 to $10/$20 will be increased from $0.50 to $1.00. At $25/$50 and higher, Heads-Up caps will be raised from $0.50 to $2.00, and 5+ player caps from $3 to $5.

Author’s notes:

PokerStars is placing increased stock in its casual and recreational players, sometimes at the risk of ostracizing its hardcore regs. If that wasn’t already clear by prior policy changes, the latest amendments to rake caps hammers the point home.

Heads-up cash game players across all but the lowest stakes will be immediately impacted by the rake cap increases. However, the ones who are going to really feel the effects are players that grind out $.25/$.50 – $1/$2 HU NLHE for a living, if only because at these levels, the rake is higher relative to the size of the average pot.

Whether the changes are significant enough to discourage regs from playing other regs is yet to be observed, but I believe they are.

High stakes 6-max and full ring players may not feel the full breadth of the cap increase immediately, but after forking over an extra couple of bucks a few thousand times, they will, especially since most of these players rely on Stars’ low rake to compensate for their relatively nominal skill advantage.

Sit & Go fee amendments

Entry fees for KO tournaments and Sit & Gos are being increased across to board to match those of non-knockout tournaments. Additionally, the entry fees for HU Hyper Cash Sit & Gos and 6 Max Hyper Satellites will see hikes for all stakes up to $1,000.

Author’s notes:

PokerStars’ policy modifications for HU Hyper SNGs and 6 Max Hyper Satellites aren’t terribly impactful, as they only target a small subset of the company’s game offerings. Furthermore, after the change, the entry fees at even the lowest stakes still won’t exceed 5% of the total buy-in. That’s a fair modification.

On the flip side, the Knockout MTT and Hyper Turbo MTT reforms come across as more damning.

Forcing combatants to pay a 10% VIG for a tournament where half the entry fee isn’t even factored into the tournament prize pool was a brazen move on PokerStars’ part; one that has already proven a point of contention among KO aficionados.

As far as the changes to Hyper Turbo MTT’s go, I’ll say this: the VIG for the tournaments in question were really, really low before. So while the forthcoming fee hikes may come across as drastic, consider that the entry fees for such tournaments are still only half that of a normal MTT.

Spin & Go rake modifications

Spin & Go entry fees will be increased at stakes $3 and above. At the $3 and $7 levels, the entry fee will now be 6% of the buy-in price, an increase of 1% and 2%, respectively.

Players gambling it up at stakes $15 and above can now except to pay a 5% VIG, also a hike of 1%.

On a more positive “spin,” the top prize per buy-in tier will see an an increase from 1000 times the buy-in to 3000x.

Author’s notes:

What PokerStars fails to mention in its Two Plus Two post is that although the top prize is now three times greater than it was previously, its chance of occurring has been slashed by four-fifths. In fact, the frequency of all multipliers 6x and above are taking a hit.

Well, at least they’ll be fewer 2x prize multipliers and a bunch more 4x. But that’s a small consolation prize, especially considering that with the rake changes, the game becomes essentially unbeatable.

By now, I think we can all agree that while Spin & Go’s pose some benefit in that they balance the poker ecology and offer recreational players a chance to learn the game, their implementation is primarily a money generating device designed to draw the impatient gambling crowd.

And to that effect, Spin and Go’s have been an overwhelming success. But as the format matures, PokerStars may find that it harms cash game liquidity more than it facilitates market growth.

Will liquidity on PokerStars be affected?

Slightly.

When Spin & Go’s first launched on PokerStars in late September, cash game liquidity took an 11% hit. Since, only a portion of the lost volume has been recovered, indicating that the novelty of the new poker-gambling hybrid has not yet worn off. This, according to data gathered at PokerFuse Pro via PokerScout.

I don’t however expect to see the same sharp drop-off when the newly announced policy changes go into effect next Tuesday, for the following:

  • PokerStars’ player loyalty program and customer service departments are still the best the industry has to offer.
  • The new rake structures are fairly in line with what other top online networks, second place 888poker.com included, currently offer. In essence, Stars is merely forgoing its overly generous rake structure in favor of one that adheres to the industry norm.
  • The PokerStars 7 client improves upon nearly every aspect of the company’s already exemplary poker software.
  • PokerStars is the most recognizable brand in the poker industry.

That being said, due to the removal of the Battle of the Planets promotion, I do expect Sit and Go liquidity to take a smallish hit, as the added incentives for putting in massive amount of SNG volume are now virtually non-existent.

Furthermore, PokerStars may not want to push the envelope too much further, as any further cuts may instill widespread paranoia in the community. That, and PokerStars’ promotional schedule isn’t nearly strong enough to offset a rake schedule that is, on average, below industry standards.

Tread carefully PokerStars, trend carefully.

Recapping PokerStars’ other policy changes

This isn’t the first time PokerStars has made headlines for announcing upcoming changes to its long standing policies. In just the past several months, the Rational Group has:

  • Cut ties with its sponsored pros including 2009 WSOP Main Event champion Joe Cada, Marcel Luske, as well at its two remaining Full Tilt Poker “Professionals,” Gus Hansen and Viktor Blom.
  • Made minor changes to the amount of benefits its top tier (SuperNova Elite) members receive annually.
  • Alluded to forthcoming changes in nations where “regulation and taxation comes into effect,” such as the United Kingdom and Bulgaria.
  • Discharged nonactive affiliates and added a 2.5% currency exchange fee, both alarmingly, without any real notice or explanation.

Is Amaya really to blame?

Following Thursday’s announcement, Two Plus Two users were hasty to direct their scorn at Amaya Gaming, and to an extent they cannot be blamed.

Most of PokerStars’ sweeping policy changes did go into effect shortly after Amaya took over as head honcho earlier this summer. And it does appear that the latest changes were designed by Amaya to push player patience as far it could without completely alienating segments of the community.

But, and this is a big “but,” keep in mind that many of the company’s cost cutting measures were planned before Amaya took over. In particular, a full review of Stars’ VIP program was planned as early as one year ago, and if anything, the changes planned for 2015 are much tamer than most industry experts initially projected.

Is Amaya behind some of Stars’ controversial changes? Undoubtedly. But it’s not entirely deserving of the venomous words being spewed in its direction either.

Other resources

For more, Pokerfuse’s Nick Jones writes on Amaya’s role in PokerStars’ policy changes in great detail in his latest article, “Breaking Down Every Major PokerStars Change This Year.

Steve Ruddock suggests that other factors may have driven PokerStars’ change of heart in his comprehensive piece, “What’s Really Driving Recent Policy Changes at PokerStars?

 

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Robert DellaFave

Robert DellaFave writes for a variety of online gaming sites and is also working on programming a poker simulation creative enough to beat the best. Follow Robert on Twitter @DivergentGames and on Google+

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