In a short statement posted to the PokerStars Blog, online poker’s largest operator announced rake increases for the site’s lowest buy-in tournaments.
Severin Rasset, who serves as director of poker innovations and operations for PokerStars, opened the “PokerStars Pricing Update” by attempting to explain the rake hike implemented on March 26:
“The online gaming business is changing rapidly including on the regulatory front, where we see a generally positive path towards industry regulation countered by bumps along the way.
As the industry evolves, we need maximum flexibility and agility to adjust to changing conditions.”
Rasset went on to frame the decision as a matter of basic economics, with a business responding to market changes by adjusting its pricing model:
“Pricing is a key commercial consideration for every business and we will increasingly use a dynamic pricing model that gives the greatest flexibility to respond to market dynamics.
Therefore, we will be reviewing and adjusting our pricing, bonusing and promotions, and our Stars Rewards programme on an ongoing basis.
The changes we make to our pricing are based upon various factors including customer behaviour, commercial and promotional considerations, and the overall long term sustainable health of the ecosystem.”
Curiously, while Rasset revealed that rake would go up on all multi-table tournaments with a buy-in of $20 or less, the official statement made no mention of the actual increase in terms of dollars and cents. Instead, players were instructed to open the tournament lobby, click through to the “Structure” tab, and then open the “Tournament Information” tab to find the rake amount.
As it turns out, a $1 + $0.10 tournament – which used to cost one dollar to enter plus 10 cents in rake for the house – will now be set at $1 + $0.12. That equates to a direct increase of 20 percent, but when assessed in relation to the full cost for players, the rake increase comes to just under 2 percent.
PokerStars also announced that rake would decrease on all “Time Tourney” events, which are hybrid tournaments designed to end at a specific time. While that may be an effort to balance out the aforementioned increase, basic multi-table tournaments are far more popular than their Time Tourney alternative.
The announcement prompted immediate backlash from members of the poker community. Many players, professional and amateur alike, have long criticized parent company The Stars Group (formerly Amaya) for pinching pennies on PokerStars’ actual poker products as part of a strategic shift to casino and sports betting verticals.
Doug Polk, among the most vocal critics of PokerStars’ new direction, sounded the alarm to his contingent of 115,000 followers on Twitter:
“Many companies struggle to put together a cohesive message, but @Pokerstars has succeeded on that front in spades.
Microstakes recreational players are being protected with yet another rake increase, which will further increase everyone’s profitability.”
Polk also wondered aloud why high-profile pros continue to accept sponsorship from the site, given a slew of controversial management moves in recent years. PokerStars drew the ire of its most avid players last year by drastically cutting its “rakeback” rewards program, along with the launch of lottery-style poker knockoffs like “Spin and Go” tournaments and “Power Up” poker.
Kevin Martin, a pro and member of Team PokerStars Online, responded to Polk by explaining that he was “proud” to represent the company, and all businesses have the right to set their own prices.
Polk pointed out that the site’s own announcement didn’t include the actual amount of the hike, before observing that the traditional display of buy-in + rake had been hidden three screens away:
“The way it’s raised matters.
Taking away the ‘X + Y’ so players know the part of the buy-in that is rake, hiding it inside the tourney lobby, and then keeping the exact same buy-in is essentially an attempt to use confusion to increase price without customers knowing.”
Polk’s tweets generated a firestorm of comments, with hundreds of replies largely siding against PokerStars.