CardRoomanomics
Aug. 30th, 2006 02:00 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
peterbirksAaron Brown observed that cardrooms looked after their regular winners, because the regulars paid the rent, while casinos did not, because they perceived the winners as taking losers' money that rightfully 'belonged' to the casino.
This is a bit simplistic, but it explained why Gardena, with its own little economy, did little to help tourists compared with the largesse lavished upon losers at casinos in Vegas, whereas it did a lot to keep the regulars happy compared with the lack of largesse lavished upon the grinder in Vegas.
A recurring argument on 2+2 is whether the online poker sites should or should not be nice to the regular multi-tablers. One line is that Party is right to resent them, because they take money out of the game which Party might otherwise win, whereas the second group argue that these multi-tablers (at lowish stakes) probably pay an average of $1,000 a month to Party -- far more than Party gets from your typical loser. Therefore Party 'should' be nice to the regulars.
Of course, this is falling into the frequent fallacy that life is somehow fair. Party can be both at once. It can allow people to play 10 tables at once so that they contribute more rake, but then it can be less than nice to them because it knows that they are "locked in" provided Party keeps provding new fish fodder. I don't see Party throwing me any deposit bonuses at the moment...
But the big change is surely that Party now has its own house games. It's a casino as well as a card room. If I were Party, I would do all I could to get players from card room to casino. And I wouldn't see any reason to be nice to regular winners, despite the rake they generate.
However, I, and Party, might be wrong. The mistake is seeing the online gambling world as an enclosed economy. Obviously, for the losers, it isn't. They can spend their money elsewhere.
There is a time factor here. If Party seriously discouraged multi-table winners, then its income would drop. In theory, the people who were losing to the multi-tablers would now be on a much more level playing field and they would all lose their money rather more slowly to the house.
There are two flaws in this argument. One is that weak players are not uniformly weak. Getting rid of one set of multi-tabling winners (say, by closing their accounts) would just create another set of winners, who would then play more tables. All that would have changed is that Party would have barred some players who were now playing elsewhere, and would be earning less.
But, supposing there was a flat level of losers, that does not mean that Party would make more money. Because it presupposes that the losers sit down and say "I'll play until I lose $100". In fact, they may sit down and say "I'll play for three hours or until I lose $100, whichever comes sooner". If the player survives the three hours (because Party has closed the accounts of the multi-table winners) then he goes out and spends what he has left (or even his winnings) on something else.
So, Party gains by having multi-tablers, because some losers would become winners if the current set of multi-table winners were barred, and because some losers would lose less, but wouldn't pay any more rake, because they play according to time rather than according to money lost.
As a cardroom, keeping the winners happy is in Party's interest.
But, what if you could get the losers over to the casino? Ahh, well that's a much better proposition. But not necessarily phenomenally better. If a player is playing by time, rather than money lost, Party could still lose out by having the fish in the casino rather than at the card table. Because the multi-tablers are paying the rent as well. At the card room, Party has two sources of income - they take their share of what the fish lose (in terms of rake) and they charge the winners a "tax" on what they take from the fish (in terms of rake). If they shift all the fish over to the casino then, sure, they take 100% of what the fish loses in three hours, but they lose the rake that was paid by the multitablers (who won't play if they aren't winning) and, if the fish quits after three hours, no matter how much he has spent, then Party may gain no more from the fish than they would have won anyway.
This is a bit simplistic, but it explained why Gardena, with its own little economy, did little to help tourists compared with the largesse lavished upon losers at casinos in Vegas, whereas it did a lot to keep the regulars happy compared with the lack of largesse lavished upon the grinder in Vegas.
A recurring argument on 2+2 is whether the online poker sites should or should not be nice to the regular multi-tablers. One line is that Party is right to resent them, because they take money out of the game which Party might otherwise win, whereas the second group argue that these multi-tablers (at lowish stakes) probably pay an average of $1,000 a month to Party -- far more than Party gets from your typical loser. Therefore Party 'should' be nice to the regulars.
Of course, this is falling into the frequent fallacy that life is somehow fair. Party can be both at once. It can allow people to play 10 tables at once so that they contribute more rake, but then it can be less than nice to them because it knows that they are "locked in" provided Party keeps provding new fish fodder. I don't see Party throwing me any deposit bonuses at the moment...
But the big change is surely that Party now has its own house games. It's a casino as well as a card room. If I were Party, I would do all I could to get players from card room to casino. And I wouldn't see any reason to be nice to regular winners, despite the rake they generate.
However, I, and Party, might be wrong. The mistake is seeing the online gambling world as an enclosed economy. Obviously, for the losers, it isn't. They can spend their money elsewhere.
There is a time factor here. If Party seriously discouraged multi-table winners, then its income would drop. In theory, the people who were losing to the multi-tablers would now be on a much more level playing field and they would all lose their money rather more slowly to the house.
There are two flaws in this argument. One is that weak players are not uniformly weak. Getting rid of one set of multi-tabling winners (say, by closing their accounts) would just create another set of winners, who would then play more tables. All that would have changed is that Party would have barred some players who were now playing elsewhere, and would be earning less.
But, supposing there was a flat level of losers, that does not mean that Party would make more money. Because it presupposes that the losers sit down and say "I'll play until I lose $100". In fact, they may sit down and say "I'll play for three hours or until I lose $100, whichever comes sooner". If the player survives the three hours (because Party has closed the accounts of the multi-table winners) then he goes out and spends what he has left (or even his winnings) on something else.
So, Party gains by having multi-tablers, because some losers would become winners if the current set of multi-table winners were barred, and because some losers would lose less, but wouldn't pay any more rake, because they play according to time rather than according to money lost.
As a cardroom, keeping the winners happy is in Party's interest.
But, what if you could get the losers over to the casino? Ahh, well that's a much better proposition. But not necessarily phenomenally better. If a player is playing by time, rather than money lost, Party could still lose out by having the fish in the casino rather than at the card table. Because the multi-tablers are paying the rent as well. At the card room, Party has two sources of income - they take their share of what the fish lose (in terms of rake) and they charge the winners a "tax" on what they take from the fish (in terms of rake). If they shift all the fish over to the casino then, sure, they take 100% of what the fish loses in three hours, but they lose the rake that was paid by the multitablers (who won't play if they aren't winning) and, if the fish quits after three hours, no matter how much he has spent, then Party may gain no more from the fish than they would have won anyway.
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no subject
Date: 2006-08-30 02:18 pm (UTC)Personally, I do not think that Party owes the multitablers anything. We do not get rebates or loyalty bonuses for most goods and services we purchase, so why should Party be any different? Party offers a service at a certain price (rake). The multitablers are consumers and they have the opportunity to seek out better services or better prices elsewhere if they do not like what Party offers. The multitablers current state of inertia is not going to get them what they want, but that inertia is understandable. It is likely because the opportunity cost of moving to another site is prohibitive (less game selection, etc.). Like you said, life is not always fair.
Given that a large number of the multitablers are US citizens and under the age of 30, I suspect much of the complaining is based in the roots of that generation's entitlement mentality that is pervasive here in the States. Most of the multitablers arguments for loyalty benefits seems to work backwards from "I'm not getting what I want".
no subject
Date: 2006-08-30 03:11 pm (UTC)Actually, I started off writing this piece planning to show how it was in Party's interest to move people over to the casino, but then, as I got further in, I realized that this argument was not necessarily true, because of the "time spent gambling vs amount lost gambling" dichotomy.
But the thing is, most goods and services these days are sold with rebates and loyalty bonuses. Think loyalty miles with airlines; then there is my Tesco clubcard for groceries and petrol; my American Express points for buying with Amex, and so on and so on. If you take the line that I am a loyal consumer who might go somewhere else (see Neteller!) then it's worthwhile having a loyalty incentive. If you take the line that Party players are locked in (as I am, for example, with my railway season ticket), then it isn't worthwhile having a loyalty rewards scheme.
But I like your point about most posters starting from the position of "I'm not getting what I want. That isn't fair", because that seems to be the position of a large number of (mainly younger) people today. A bit like "who moved my cheese?"
Taking the line of Occam's Razor, perhaps the best strategy for Party is the one that generates the most profit tomorrow, since a long-term view seems befuddled with far too many "what-ifs"
PJ
no subject
Date: 2006-08-30 03:39 pm (UTC)So I would expect Party to be looking to maximise the number of punters punting in as many simultaneous ways as possible. I'd help if they'd make the non-Hold'em tables resizable. And keep the new player churn going through continuous advertising. They could do (cheap) viral stuff so much better if they had half a clue, but they don't. And neither do any of the others, really. I still don't really understand the Monster thing other than that it seems to be designed for the fishies. Or maybe no-one's talkng about it because it's too good a deal and they don't wnat anyone else to know...
But then again I tend to play Party for two reasons - bonus clearing and SNGs. Which keep my Party Points total alive (after stripping me of the lot before - I could probably have got them back but the limited cash value made it most likely a -EV proposition).
If there wasn't a Party Poker someone would probably have to invent it.