The Joy of Rakeback

I recently attended the CasinoAffiliatePrograms.com European conference in Barcelona, more commonly known as CAP Euro. I was at one of the conference after-parties, when a gorgeous affiliate manager came up to me to ask who I was. I told her my name, that I ran RakeTheRake.com and asked if she'd like a drink. So far so good. 'So what does your site do?' she asked. 'I'm a rakeback affiliate,' I replied casually. Well from the look on her face you would have thought I had just told her that I shoot newborn puppies for a living. 'My boss says I am not allowed to talk to rakeback affiliates,' she said. And with that she was gone.

It was an odd experience, and it made me wonder (not for the first time) whether a lot of the poker rooms or networks actually understand what rakeback is. It really doesn't matter what name you give it, whether you call it cashback, reload bonus, loyalty bonus or rakeback. And it really doesn't matter how you give it to the player - whether as cash, gadgets, land-based entries or, as one affiliate once claimed, via chocolates and flowers. It's all about player retention.

Rake or break

Let's not beat around the bush. Poker rooms want players to continue playing and raking, and don't really care too much if they are winning or losing, as long as they continue to play. So why do some rooms and networks get so excited about the word rakeback?

Let's start by considering where rakeback started. The poker rooms had a number of big players they wanted to hold on to - 'whales' if you will - and so, like any good casino host, they set about comping them with cash and gifts. Rather than free drinks and hotel suites, however, they started calling the players on the phone and offering them a reduction in their playing costs by promising them a percentage of their rake back each month for as long as they played.

I know what you're thinking: that's okay for the big players, as they are worth it. Indeed they are, but what value is a guy raking $10,000 a month if you haven't got 100 players raking $100 month for him to play against? So as a collective those 100 players are just as important. I know they might not all leave at once, but if a bunch of them do then it's more likely that the big guy will too.

So where does offering rakeback go wrong? In the networks, that's where. For the independent rooms it's easy - you either openly embrace rakeback like Absolute Poker, Full Tilt and Betfair to name a few, or you simply say that you don't offer rakeback via affiliates but you have your own internal rewards system like PokerStars. The important thing about the independent rooms that have a rakeback policy is that it is capped and adhered to.

For the most part, the big affiliates have been instrumental in securing caps at the rooms, because if you don't have caps you have anarchy. One affiliate offers 30%, the next 31%, the next 32% and so forth until some affiliate offers 0.5% less than the affiliate is getting themselves.

But isn't that good? Doesn't it mean the player is getting maximum value? No. Rakeback players are a special breed. They are better informed, win more often and play longer than the average player. They want to be able to track their rake daily, they want answers to their questions within minutes and they want someone they can trust to pay them when they were told they would get paid.

How can the affiliate making 0.5% commission do all that on his salary? How can he make sure 30,000 payments go out promptly each month? How can he answer 600 emails a day and update his website continuously with any changes? The simple fact is he can't and as a result his customer service is shoddy, the player gets hacked off and eventually stops playing at the room altogether.

And then there's the classic network with no clear policy at all. The policy goes something like this: 'There is a cap at 30%, but nobody can advertise it and nobody can mention it to a player even if the player mentions it first. However if a player does mention it to an affiliate the affiliate can acknowledge the existence of it providing they have received a note from the player acknowledging that the rakeback doesn't actually exist. Also the cap at 30% isn't real because some of you can give more if you want.'

Love your affiliate

What's frustrating about this is that the networks without clear policies are too proud to ask for or take advice from the people who know rakeback best: the big established affiliates. 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 looking for in terms of kickback.

It is widely acknowledged that affiliates played a big part in getting the poker world to where it is today. What can be better than having thousands of people pushing your product, but not having to pay for it until results are produced? And they definitely produced results!

But times are changing. The competition between rooms and networks is getting fiercer, and it's dawning on everyone that they need to spend more on player retention in the form of bonuses, rake races and hand races.

The truth is that the days of the big payouts for affiliates are almost over. The rooms need to start spending more on the players and this money has to come from the affiliate share. Every other penny is accounted for. Gone will be the days of the 50% revenue share, the $450 CPA. Most of the rakeback programs are in-house now anyway, which is the most efficient way for players to get their money.

What we will see is all affiliates being made equal and operating on 5%, 10% or 15% margins depending on their volume. The rooms will pay the rakeback directly and throw in extra races and freerolls as added incentives. And this won't just be for rakeback players. As time goes on more and more players will learn about retention bonuses and they too will want to be part of the programme.

So all in all rakeback isn't really the devil's work at all, but is merely another type of loyalty bonus invented by the rooms but facilitated and spread by affiliates.

Incidentally when girls ask now, I say I am a 'retention technician'.