Is Rakeback Killing Online Poker?

Before I get into the details of this article let me point out that this is just an observation on my part, and the likelihood of what I outline actually taking place are about as good as winning the World Series of Poker Main Event.

There has been a lot of talk, and even quite a bit of action, by the online poker sites to deal with the issue of unfair advantages and the increasing amount of tight play taking place in the online poker world. One poker network, MicroGaming, has banned any type of data-mining, and certain sites on the iPoker Network have put a cap on the percentage of winning players they will allow on their site -telling some players they’re no longer welcome at the poker tables!

Many see these moves as appealing to casual poker players and an effort to level the playing field –which is definitely part of the reasoning– since their goal is to bring new players to the site. However, a lot of these policy changes have to do with a sites bottom line, and their ability to bring new players into the mix is a big part of that, but so is their current player base.

If a site can’t attract new players they will eventually be left with a bunch of grinders sitting at a handful of tables -sort of like a musclehead gym that wonders why they can’t attract more members because their current clientele is to intimidating.

A poker site’s goal is to have as many tables running as possible since more players equals more tables; which equals more hands dealt; which equals more rake collected. It’s very simple. The last thing a site wants is a bunch of rocks, which brings me to the heart of this article, namely low-limit rakeback grinders and their effect on online poker.

It’s unclear if sites have taken a look at either eliminating or decreasing their rakeback, but judging by the recent changes, and talking points, the poker sites have obviously realized that the games have tightened up entirely too much, especially at the lower limits. New players who join a site to have fun and gamble are faced with $100 NLHE game with two or three players seeing the flop, and $10-$20 pots! A few years ago, you’d have five players seeing the flop, and $30-$40 pots.

The reason for the change is that a lot of players are now counting on their rakeback as their profit, hoping to simply break-even, or be slight winners in the game itself, and it’s things like tracking software –that allows them to triple or quadruple the number of tables they play-that makes their rakeback deal so lucrative; which along with the unfair advantage argument is a major reason quite a few sites are doing away with tracking software.

Now, as much as I love rakeback -who doesn’t-the practice has turned poker on its head, where players can take an uber-tight approach to the game and still make a good profit as long as they play enough tables. Before rakeback, rocks were simply slow losers, with rakeback they are solid winners! A strategy that is supposed to fail succeeds in the online world with a rakeback deal, and is even rewarded thanks to software that allows people to play in numerous games. Rakeback deals reward quantity and not quality.

The trouble is, the smaller sites have no choice but to engage in rakeback deals to compete with the likes of Full Tilt, UB, and so on. But this puts them in the unwanted situation of having a large majority of grinders on their site -who in effect kill action and drive away casual players. It might be time for the online poker world to take a long look in the mirror and determine what will be the best long-term approach to take: After all, the largest online Poker Room, PokerStars, doesn’t offer rakeback, and neither did the previous #1 online poker site, Party Poker.

So, while data-mining, tracking software and other issues are part of the problem, the real issue could in fact be rakeback.