Haasje Posted March 19, 2015 Share Posted March 19, 2015 Grinders do bring in rake but they are not where the profit from the company is coming from. Ultimately Grinders take cash out of Pokerstars. There is a lot of reshuffling going on but there are net depositors and net winners. The net winners are welcome at pokersites because it is important that is POSSIBLE to make money with poker (probably its nr.1 attraction). At the same time the company doesn't want to make it too easy but that's difficult with all the competition there is. Anyway, I wanted to say that the casual depositor is hugely important to the company. The grinders are not. The one benefit grinders do bring is that they sustain action 24h and bring liquidity to a network or site. Link to comment Share on other sites More sharing options...
Hielko Posted March 19, 2015 Share Posted March 19, 2015 That's not the only reason. The thing is that there is always going to be a winner at the poker tables, even if you are able to run a site with 100% recreational players. Someone is going to be better than the rest. Even if grinders are only going to extract money from the poker economy they are probably still going to be a net positive for the site since the average skill difference between grinders is probably smaller than between recreational players. The smaller the skill difference the more often the money gets raked and the bigger the profit for the poker site. Link to comment Share on other sites More sharing options...
yadayada Posted March 19, 2015 Share Posted March 19, 2015 fish see a lot more flops, so they pay a lot more rake. If you got tables full of regulars, and they see 20% of the flop, it means 80% of the time, no rake is paid (or did they change that?). Also you need to give grinders rakeback, or else they move to other sites. If your site would have a lot of casual players, they would see a lot of flops and take in little rakeback. Allthough it seems valuation is more attractive then I thought. It seems 2013 earnings were in USD? So with a 3.82bn C$ the company really trades on a 7.2x multiple, possibly lower. And on a 12 ev multiple. in H1 2014 earnings were 218m$, so 15% growth. That would be about 6.8x multiple. Which seems cheap for a company with growth prospects. One thing that is interesting is their pokerstars casino. That could have big potential. I think for partygaming, 3/4 of their profits came from the casino, and 1/4 from poker. So you have to wonder why the hell pokerstars did not do this before? They squeeze more money from a gambler through their casino then through poker. It looks like they also increased rake, untapped pricing power? And they will also be adding a sportsbook, which could be very good for the site. A friend of mine works for evolution gaming, they do the casino side online with live dealers with stars. And he says it is actually very popular. They are growing fast, and are going to IPO soon. Looked like their profits are growing in the double digits. So it seems amaya bought pokerstars with the goal of doubling profits on the casino side? A negative point here is that the euro crashed. And they are earning a large % in euro's. Seems on closer look this one could be interesting after all! Link to comment Share on other sites More sharing options...
Hielko Posted March 19, 2015 Share Posted March 19, 2015 Fish do see a lot more flops, but that is not the important statistic. If you deposit $100, see 5 flops in a row and lose it all you will not generate a lot of rake. If you have two or more regulars that are almost equally skilled you can give them all $100 dollar and it might take a thousand hands before one wins it all. Sure they are going to see less flops, but they are going to play a lot more hands. What matters is the skill difference between players, and usually the skill difference between regulars isn't big. Players with a small skill difference are a fantastic business for a poker site. I don't think have to give regulars rakeback, although this is a strategic mistake that a lot of poker sites make. What you need to do is attract bad players. If you can offer good games with bad players the regulars will come, no matter the rake. I think Pokerstars has realized this because they are moving away from a rewards system that rewards the regulars the most towards a system that is interesting for recreational players. You would think that this implies that they have untapped pricing power, but I think that is probably limited. A lot of tables are filled with players that are barely making money, and are thus great players to have for the site since they don't remove a lot of money from the poker economy but they do generate a ton of rake. If you increase your rake by a large amount marginally winning players will be forced to quit the game or to start playing somewhere else. You can only increase the rake if a lot of regulars are making a boatload of money. And yes, as soon as Pokerstars launches a casino it is probably going to generate a lot of money. But the big question will be whether or not it will cannibalize their existing business. If I'm a recreational player that earmarks $100 for online gambling and lose it at the casino tables, will I make another deposit to play poker? Link to comment Share on other sites More sharing options...
alwaysinvert Posted March 19, 2015 Share Posted March 19, 2015 A key problem is that poker has gotten a lot less fun for recreational players. They are now to a very large extent subject to script-using, hud-using multitablers who don't chat and often don't vary their game very much as opponents. Of course, that's been the case for a number of years already, but I don't think it has helped with traffic numbers. It's true that the sites earn their money on small skill differences, but it's the big fish who dump money fast that is the life blood of poker. Without that injection the eco system wouldn't work. This is an amazing business but I have no idea how long or if it will remain so or at what size. Link to comment Share on other sites More sharing options...
yadayada Posted March 19, 2015 Share Posted March 19, 2015 yeah good point, regs do last a lot longer. I think in the casino their take is bigger? So they will earn more off that 100$ deposit? And a sportsbook could attract a lot of new players. It seems the guy who did this deal is trying to squeeze as much as possible out of this to pay back the debt, and taking some risks while he does it. Cutting all the fat, not caring much about pleasing the players like the previous owners. Link to comment Share on other sites More sharing options...
frommi Posted March 19, 2015 Share Posted March 19, 2015 I now only play their new Spin & Go game thats a lot more fun than Zoom or multitabling. But perhaps its just my personal taste. Link to comment Share on other sites More sharing options...
Hielko Posted March 19, 2015 Share Posted March 19, 2015 A key problem is that poker has gotten a lot less fun for recreational players. They are now to a very large extent subject to script-using, hud-using multitablers who don't chat and often don't vary their game very much as opponents. Of course, that's been the case for a number of years already, but I don't think it has helped with traffic numbers. It's true that the sites earn their money on small skill differences, but it's the big fish who dump money fast that is the life blood of poker. Without that injection the eco system wouldn't work. Yes, absolutely. In the best case scenario for the poker site a fish dumps $100 and the regs pay $95 in rake fighting over the money. Wonder what the actual numbers are though. And in the casino business I think that eventually the site earns 100%. The only winner can be the house :) But the problem with the casino business is that I think that the moat that they have on the poker market cannot be translated to the casino market. Link to comment Share on other sites More sharing options...
rukawa Posted March 21, 2015 Author Share Posted March 21, 2015 I think the main conclusion I get from this thread are that online Poker is in decline. I grant that this is true. Assuming that that point is settled, the question is whether the casino business will be profitable and whether the Poker business can be easily converted into a Casino business. I feel like at this point this is the main question. Link to comment Share on other sites More sharing options...
Fowci Posted March 21, 2015 Share Posted March 21, 2015 I think the main conclusion I get from this thread are that online Poker is in decline. I grant that this is true. Assuming that that point is settled, the question is whether the casino business will be profitable and whether the Poker business can be easily converted into a Casino business. I feel like at this point this is the main question. The casino business will probably be profitable, but casino businesses are a dime a dozen on the internet, and you don't really have the same network effect that you have with poker. They're completely different businesses, and there's no reason to think that Pokerstars would come close to replicating what it did with poker with an online casino... Link to comment Share on other sites More sharing options...
frommi Posted March 30, 2015 Share Posted March 30, 2015 I think i was wrong about the impact the decline of the € has. Based on the last quarterly report and that most tables and tournaments are played in USD i think the impact is very small. What was really astonishing for me is that they generate annual revenue of 1140 million $ on a client deposit base of around 650 million $. So on average players lose all their deposit in only half a year. Link to comment Share on other sites More sharing options...
roughlyright Posted August 17, 2016 Share Posted August 17, 2016 Looks like David Einhorn is buying Amaya. http://www.nasdaq.com/article/david-einhorn-adds-calpine-rite-aid-amaya-to-portfolio-cm666279 Link to comment Share on other sites More sharing options...
Oreo Posted August 18, 2016 Share Posted August 18, 2016 The buy-out is dead and this is an overleveraged, piece of s***, hf hotel. Link to comment Share on other sites More sharing options...
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