24 May
One of the seemingly few perks that poker players have enjoyed since the sale of PokerStars to David Baazov and the Amaya Gaming company is the release of Stars’ financials.
As a publicly traded company, Amaya is required to make regular reports on the state of its business available to the public. This gives the poker world a detailed look behind the curtain to what is going on at the world’s largest poker site.
Amaya has released their earnings presentation for the first quarter (Q1) of 2016, and it contains some bad news for poker players.
PokerStars’ poker revenue is down 11%
In Q1 of 2016, Stars’ Revenue from poker games was 11% lower than during the first quarter of 2015. Amaya attributed some of this change to currency exchange rate fluctuations. That may be true in part, but the fact remains that even accounting for these fluctuations, poker revenues were still down 4%. That’s not exactly what players would expect from a company that has loudly and consistency promised to be growing the game.
However, that’s not even the worst news for the poker community. In Q1 of 2015, 85% of PokerStars’ revenue came from poker. In Q1 of 2016, that number has been slashed to 76%. Poker has dropped 9% as a source of revenue for “the world’s largest poker site” in a single year. Today 1 out of every 4 dollars PokerStars generates doesn’t come from poker.
What accounts for this precipitous drop in percentage? “Casino & Sportsbook” revenues – which Amaya states “cannibalized” its poker offering- are up an astounding 267% year over year.
The list of ways Amaya has shown contempt for players is long
These changes shouldn’t come as a surprise to anyone who has been following the way Amaya gaming has been treating its poker players recently. The contempt with which the Amaya owned PokerStars holds poker players is so thinly veiled that it has to make you wonder if management simply believes that all poker players are degenerate addicts so desperate and so devoid of options that will suffer any insult to get their next “PokerStars” hit.
There are so many recent decisions that have either alienated or enraged the poker playing base that even a decent-sized list of them is still non-exhaustive.
1) Constant Rake Increases
PokerStars’ once had the hands-down, undisputed best rake structure in online poker. However, after instituting multiple rake increases that is simply no longer the case. Like some kind of maniacal overlord, PokerStars under Amaya has found new and creative ways to take money from players – such as charging rake even for rebuys and add-ons.
And if you think this is all just sour grapes, you don’t even need to take my word for it. Things have gotten to the point where even PokerStars’ Daniel Negreanu – the company’s leading pitchman – had to concede on his blog that there was a possibility that certain players might make the decision to move on to different games/sites.
2) Terrible Corporate Communications and Customer Service
It seems like a week can’t go by anymore without some story about PokerStars’ Communications or Customer Service teams insulting a player in one form or the other.
After eliminating the entire SuperNova Elite level from the PokerStars VIP Club overnight – despite it being a two year rewards tier – PokerStars’ Head of Corporate Communications infamously tweeted that the company “absolutely could have done more” to inform players of the changes. I’m sorry, but a company that cares about its player base would not make this mistake.
3) The Decimation of “Team PokerStars”
The rift between PokerStars and its stable of talent is one of the most spectacular examples of the alienation of the poker community. The list of high-profile players choosing to sever their ties with the site (not the other way around) is startling.
The list includes poker grinder inspiration such as Mike Haxton, all the way through to popular culture cross-over Victoria Mitchell Coren. The backlash against the way Amaya has taken the company has been astounding. Although the value of any one sponsorship may be hard to measure, there cannot be any doubt that the constant trickle of defections has shown just how insulted poker players feel at the hands of Amaya.
4) Decimating the well of trust built up over a decade
PokerStars used to be the poster child for how to run corporation. Anyone who played poker before the boom will tell you that they recommended the site to anyone who asked – and even some who didn’t. Playing at PokerStars was a synergy between ownership and the players. Everyone wanted to see the site succeed.
Whatever shred of that sentiment that had survived 2015 has now been burned to ash by mid 2016. Not only to players not recommend PokerStars, but many of the people I speak with (myself included) actually feel straight up guilty when they do play on the site.
This shows just how deep the effects of Amaya’s mistreatment of players now runs in the community.
Does Amaya even care about Poker anymore?
Honestly, I’m not sure if Amaya even cares that PokerStars is hemorrhaging its status as a site for poker players. When a word like “cannibalization” is casually used to discuss poker profits at the world’s largest poker site, it sure doesn’t seem that way.
Regardless, it seems fairly obvious that greater emphasis will be placed on pit games moving forward. Whether or not the ultimate strategy is to simply use poker as a bridge to convert PokerStars’ player base into casino/sportsbook customers, I don’t know.
However, moving forward, one thing is abundantly clear – poker is becoming increasingly less important to what remains – for now – the world’s largest poker site.
Ultimately, it remains to be seen how long PokerStars can distance itself from poker players before poker players begin distancing themselves from PokerStars.
