iPoker Network Changing Rake Calculations for 2015

November 24th, 2014 | by Jason Reynolds

iPoker will be introducing a new method of distributing revenue to skins that emphasizes attracting new players and new deposits. (Image: iPoker logo)

The iPoker Network will be calculating rake distributions to member sites in a new way starting on January 1, a move that could help reconnect a network that is currently split into two tiers.

The new way of awarding rake to skins will be known as “Source Based Rake.” While the process was explained to operators in a 20-page document, and some learned about the policy change as early as July, the main thrust of the new method for distributing revenues is quite simple. More emphasis will be placed on how much players are depositing, rather than how much rake they are “generating” at the tables.

Deposits Become “Virtual Account Balances”

According to a report from pokerfuse, players will now have a “virtual account balance” behind the scenes along with their actual account balance that the individual player will see. As with their real account balance, the virtual account will be funded by deposits into their account.

Every time a player makes a bet using cash they’ve deposited, that money will be tagged to their virtual account, forever linking them with that money. However, the virtual balance will only change when those tagged funds are used to make a contribution to a raked pot or pay an SNG tournament fee. At that time, the revenue derived from the player will be taken out of their virtual account balance. Essentially, every bit of revenue taken in on the network will be traced to a particular account that it was introduced from, showing who was responsible for originally bringing those funds to iPoker.

Revenues will then be distributed to skins based on which site the revenues came from: in other words, which players brought in the cash that was ultimately raked later, regardless of who actually made the raked bet.

Two-Tier System Could Be Eliminated

The idea here is to change the incentives that caused the two-tier system to be put into place in 2012. In a network with many sites, individual skins were able to maximize profits by bringing in high-volume winning players who contributed lots of rake to the site. However, this hurt other sites that attracted more recreational players, despite the fact that this was often where most of the liquidity came from for iPoker.

That led iPoker to create a two-tier system, in which only skins that attracted new players and generated new deposits were able to be a part of the more profitable upper tier. In most games, the player pools were split between the two tiers, though some tournaments featured players from both tiers playing together. The new method could eventually lead to reuniting the network, as the revenue model itself will encourage attracting new players.

The new methodology could result in a massive shakeup for the way revenues are distributed across the network. Those skins that have a relatively low number of high-volume players will likely take a revenue hit, while those that have attracted large numbers of recreational players who regularly deposit money into the network will do better.

Most players should see no change to the play experience on iPoker as a result of the new policies. However, there could be long-term changes to VIP programs and other incentives, as skins may want to encourage mass market players as opposed to just their big winners. Rakeback deals for high-volume players are also likely to suffer, unless those players are constantly depositing money to continue contributing to the network.