iPoker Network to be Divided into 2 Networks

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Several sources on the web talk indicate that the Playtech-owned iPoker network may be divided into two micro-networks. The iPoker network is ranked as the third largest network and is made up of some 40 poker rooms.

iPoker has managed to stay one of the larger networks because of the caliber of some of the rooms which include several of the largest sportsbooks in Europe such as Britain’s oldest bookmaker William Hill and Bet365 whose logo we see posted on CFL matches and as well as the flagship site, Titan Poker which is said to be owned by a long-time shareholder group of Playtech out of Israel.

The motivation for this division surely stems from the old complaint that some rooms bring fish into the poker eco-system while other poker rooms benefit without making any contribution to the health of the networks.

Player segregation is not a new phenomenon in the poker world. Other poker networks such as the Microgaming poker network have ring-fenced some groups of players belonging to individual poker rooms like Ladbrokes from the rest of the network on some cash tables. The logic for such draconian measures is to protect the large sportsbooks so they do not lose their VIP players to smaller rooms who “supposedly” lure the players away by offering them better bonus and rakeback deals. When given the choice between two identical products, the logic is that a customer will go and play where he gets the better promotional deal. By removing the equality between the two products, the customer may reconsider switching site.

There has also been talk of the Ongame network getting segregated as well, however, Ongame may find themselves half the size within the next 12 months when Bwin is expected to jump off of Ongame and onto the Party Poker Network, currently the 2nd largest poker network.

Network segregation seems like a last effort made by the poker rooms to preserve their dwindling poker margins, much in part to failed efforts by poker networks to ensure some form of equity and friendly competition between poker rooms in the network largely affected by the offering of rakeback to players. iPoker has in the past been vocal about rakeback violations and was one of the first networks to ban rakeback but in fact rooms on iPoker are known to offer some of the highest rakeback deals in the poker world, up to 70%. iPoker has gone as far also as forcing penalties on the rooms according to win/loss ratios that penalize rooms who have too many winning players by fining them a percentage of their total revenues. The same policy was later on adopted by the GtechG2 Boss Media network who instead of keeping the money from the fines, take money from the rooms that are fined and distribute it to other rooms who have losing players ie. the competitors of the rooms that are paying the fines, a practice that can be argued to touch upon anti-trust principles.

Regardless of where the players come from or which site they play on, the poker networks still take their cut of the gross rake as a royalty usually ranging anywhere from 8-25% depending on the room.

With the poker industry facing huge challenges largely caused by world financial crises, gaming regulation and a decline the growth of poker, making networks smaller may not be the way to go forward.

 

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