Dec. 28th, 2008

peterbirks: (Default)
So, NOIQ is leaving the IPoker Network. I was going to write that it had been chucked out, but that would probably generate a flurry of denials from NoIQ.

The IPNetwork statement read that:
"iPoker has, following discussions with Tain, decided to remove Carlos Poker and NoIQ Poker from the iPoker Network. The said card rooms will be removed from the iPoker network liquidity by January 24th, 2009."

NoIQ said that:
"This partnership is about to end January 24th. NoiQ and iPoker don't look at things the same way and it has been hard to understand each other."

It's no secret that NoIQ has a high proportion of the players that make the games on IPNetwork virtually unplayable, mainly because of its "VIP" programme (for which, read, "rakeback"). But the concern at IPNetwork probably isn't so much that NoIQ generates a bunch of very tight short-stack players, as that NoIQ consistently takes out more money from the network than it puts in.

You may recall how I wrote some months ago about the curious dichotomy set up by the "skin" poker system, one which does not seem to have been mentioned very loudly elsewhere. Put simply, a single poker site (e.g., Pokerstars) ideally wants all of its players to lose money slowly. It can't achieve this, because the skill of players follows a steady curve upwards. So, if you discourage the "winners", all you do is reduce your turnover and create a new stratum of "winners".

However, if you have a network with skins, then the network wants all of its skins to lose money slowly, while the skins want their players to win (at the expense of other skins). Why? Because the skins earn money by generating player hours. In effect, for a network, the likes of you and I aren't the players. It's the skins which are the players. The networks, as it were, are wholesale mortgage lenders, while the skins are the retail front-end.

Now, while Pokerstars can't improve things by "slicing off" a layer of players, in the network-skin-player relationship, things are (or, rather, appear to be) different. Firstly, the gradation of "skill" is less smooth. Secondly, the rule of "one rake-rate for all" is not set in stone. Because we are at the wholesale level, pricing is much more bespoke. I suspect that IPNetwork, roundly pissed off that it was paying NoIQ to take money out of the system, wanted to pay NoIQ less per player-hour, or rake generated. But everyone is being very tight-lipped. And let us not forget that Playtech, which powers the IPNetwork, is, I vaguely recall, now effectively a William Hill operation, and William Hill is a short-sighted bookmaker run by not-very-bright non-gamblers. If they took a look at the IP system and saw the NoIQ (and Carlos) numbers, they would probably take the immediate line of "close the account". I've no evidence whether William Hill was involved in the decision in any way -- but I do know what William Hill does to accounts that win regularly.

There's a plus side to all this -- the IP Network might, for a while at least, become playable again. However, the point that I mentioned about Pokerstars still applies to the wholesale end. By booting off the two biggest rakeback generators (probably to the cheers of all the other skins, who have been feeling right royally shafted by NoIQ) IPNetwork creates a gap in the market, which one or more of the currently cheering skins will be quick to fill. That's how capitalism works. So, in the long run, IPNetwork will just be reducing its turnover (quite drastically, I suspect, given the high number of player-hours generated by NoIQ) but won't create a "level playing field" where all the other skins lose money slowly. Another pair of "winning skins" will emerge.


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