The iPoker network, owner of the 2nd largest online poker player base in the world is to undergo drastic changes that will see the network split in two from September 1st in an attempt to rid it of some of the problems that have plagued the network since it’s foundation in 2005.
The current business model sees iPoker licensing their Playtech branded software to customers which include sportsbooks that want to tap the online poker market and standalone poker operators, who get an ‘out-of-the-box’ poker product, large player liquidity, and network support as part of the deal. In exchange, iPoker charges 30% of the rake generated at the site. The other 70% goes to the operator, a maximum of 30% of which may be given back to players in the form of bonuses and retention incentives.

The problems began when certain operators realised that they could attract exremely valuable high volume professional players by breaking these rules and offering them larger rewards, often in the form of flat rakeback deals. What they lost in terms of rake percentage was easily made up for by the player value; a typical mid-stakes player would rake in excess of $3,000 in a month, probably 100 times more than an average recreational player. Word filtered through the forums that such under-the-table deals were available and sites offering these deals thrived. In fact some of these sites survived with little to no marketing and were simply farms for professional players. iPoker put huge resources into policing offenders but even their bigger, more reputable customers were at it, with Victor Chandler who were eventually forced to leave the network, offering 60% rakeback deals through some of their affiliates. Many other smaller skins such as Carlos Poker were also closed down.

iPoker’s efforts to penalise skins which fall outside their criteria for natural player acquisition that leads to a healthy poker eco-system never fully solved the network’s problems and so from September they have decided to split the network, with their best performing skins given access to the top tier which will have better liquidity and a more natural player base, while players on skins that fail to meet their criteria will be forced to play in the lower tier, which would look at the moment to consist largely of rakeback grinders, who will be completely segragated from the ‘fish’ which provide them with a living.
The guidelines they have specified for continued access to the top tier state firstly that the skin must maintain a volume of 6,000 active players per month, and furthermore they must attract another 850 real money players per month. Failure to do so will see skins relegated to the lower tier and will also see them facing fines for their ‘shark-to-fish’ ratio. Such fines have long been a policy of the network.

So who are the winners and loser from the split? Well, there are few operators that will have no problems keeping making these numbers: Titan Poker are the biggest and one of the oldest skins on the network and have consistently been one of the best performers, while William Hill and Bet365 have huge marketing budgets and are well known brands, and the same goes for Paddy Power, Poker 770, Chili Poker, and Blue Square. What about the dozens of smaller skins you’ve never heard of though? Betfold poker, Sun Poker, Red Sky Poker and their likes will doubtless struggle to keep their numbers up.

In the middle are the likes of Boyle Poker and Winner Poker who generally abide by the rules of the network but simply aren’t big enough, or don’t have a large enough catchment area to pull in so many new players. It’s hard to see how Boyle Poker who market almost exclusively to the small population of Ireland will be able to pull in 850 new real money players every month. One certainty is that skins who get stuck in the tier will be fighting for their lives. It’s likely that all they’ll be able to offer their players are games filled with regulars and very little traffic. It won’t be long before people take their business elsewhere and all of the skins that don’t make the threshold will more than likely go under.