Pokerstars on the Way Down: Has Amaya Killed the Golden Goose?

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The online poker landscape has changed considerably over the last few years. While Pokerstars still maintains their position as market leader, with a dominant share of around 70%, it’s obvious to anybody close to the industry that their image is as bad as it possibly could be. The other big players, partypoker and 888poker, have an open goal to shoot at now, but can they follow through and claim the crown that Pokerstars has held since 2006? Has Pokerstars killed the golden goose by alienating their customers for too long? Let’s take a look over what has changed, and what it may mean for the future of online poker.

 

Poker for Poker Players

Pokerstars was created by the Scheinberg family back in 2001, and quickly rode a wave of success following Chris Moneymaker’s victory at the World Series of Poker Main Event 2003. By the end of 2006, with the unpopular UIGEA legislation signed into law, they became the market leader following partypoker’s withdrawal form the US market along with the vast majority of their competitors.

The strategy at Pokerstars was all about giving poker players what they wanted, as much as was possible. The Scheinbergs were poker players themselves and knew exactly what they had to do to keep their customers happy. But then came the sell-off to Amaya Inc in 2014, and suddenly the poker world began to look a whole different place. The difference in attitude towards players who had been loyal customers for many years was striking.

 

All About the Money

While the Scheinbergs were obviously in business to make money, they did it with the air of people who were genuinely concerned with giving their customers the best experience possible. David Baazov, the CEO and founder of Amaya Inc, came across as a man who couldn’t care less about the industry he had just spent $4.9 billion to join.

It took barely more than three months before the controversy began. Pokerstars, having previously been 100% about poker, was now also an online casino. Business is business and Amaya had every right to expand in this direction, but this was the first sign of what was to come.

We, as poker players, are primarily concerned with the state of the poker industry and also the image that is presented to outsiders. Over the last decade’s worth  of legislation changes towards gambling in general, one of our trump cards has been the provable argument that poker is a skill game. We can clearly show, using simple mathematics, how a player can be a long-term winner. Generic casino games, such as roulette, blackjack, and craps, are not beatable. Why then would the largest poker website want to associate themselves with what is essentially degenerate gambling? To make a quick buck, of course. In this decision, there was no concern whatsoever about how this would affect the industry’s customer protection policies. Much work has been done in the past to assist problem gamblers when it comes to online poker, and now we found ourselves in a situation with the supposed industry leader encouraging gambling where there is only ever going to be one long-term winner.

The morning after the announcement, Vicky Coren-Mitchell, a sponsored Team Pokerstars Pro, terminated her contract with Pokerstars, effective immediately. The Brit told the media a week later how she felt she could not professionally and publicly endorse this form of gambling.

 

One Way Loyalty Scheme

One of the best part of being a Pokerstars customer back in the day was the generous loyalty scheme. For those guys who were at the top of the game, the Supernova Elite VIP level offered benefits not to be found anywhere else. This was next on the Amaya hitlist.

The outrage that came at the end of 2015 was unlike anything we had seen since Full Tilt Poker disappeared one morning with everybody’s cash. For those who benefited most from the loyalty scheme, there was up to a 60% cut in what they had been expecting to earn throughout 2016.

As pointed out by high-stakes professional Dani Stern at the time, the Supernova Elite program is planned out over two years, not one. At the beginning of 2015, Amaya did warn everybody that there would be changes coming to the loyalty scheme at the end of the year, but nobody expected this. It was way too much for people to just let slide. People expecting to make the Supernova Elite level had planned their 2015 grind with all the roll-over benefits of 2016 in mind. Now it looked as if they’d had the rug pulled out from underneath them.

After much public mudslinging, and even an organised player boycott, it transpired that David Baazov actually held off these changes for a year because he felt it was the right thing to do. The warning

“PokerStars is considering substantial changes to the VIP program in 2016,”

was considered clear enough for what was now about to happen.

In the end it was decided that Supernova Elite players would receive up to 45% rakeback over 2016 instead of the planned 30%. In effect, those guys had still been severely stitched up.

 

Walking Away

In less than 18 months Amaya had managed to destroy Pokerstars’ reputation to an all-time low, and now it was about to get even worse.

Well-known pro and long-time Pokerstars Team Online member Ike Haxton resigned in protest at what had been done.

“I have resigned from PokerStars in protest of the changes to the Supernova and Supernova Elite programs. There’s a lot not to like about these most recent changes and the way they’ve been communicated, but there’s one aspect that I just can’t accept. Announcing in November that players who earned Supernova and Supernova Elite status in 2015 will not receive the benefits they had expected in 2016 strikes me as dishonest and unfair.”

Ike Haxton, if not now, then certainly two years ago, was considered to be one of the best players on the planet. To have such a respected figure castigating the company that he had represented for so long much have been terribly embarrassing.

Haxton was fierce in his criticism after departing, but it didn’t take many more months before everybody started to realise just how much of an iron grip Pokerstars has over the market.

 

Where Now?

The market share stats show that not a lot has changed over the past three years, but the details tell a different story.

Vanessa Selbst, Jason Mercier, and Bertrand “ElkY” Grospellier have now all resigned from their positions as brand ambassadors. Selbst and Mercier both have new commitments with career changes and family changes respectively, but ElkY gave a firm public rebuke on Pokerstars’ change in focus compared to the Scheinberg era. This now looks to have contained an extra sting after his recent deal with partypoker being announced.

So, who’s leading the charge for Pokerstars now? Daniel Negreanu is fast becoming a figure of fun following a long list of embarrassing comments. The “more rake is better” quote that Doug Polk mercilessly teases him over shows just how out of touch he is. Other than Negreanu, the Twitch streamers look to be the most well-known players that currently have deals. Jaime Staples, Spraggy, and Fintan Hand are all respectable players but not likely to be seen playing against the world’s best. Igor Kurganov is perhaps the only player that garners respect from world class players.

The live scene deserves comment as well. The European Poker Tour (EPT) events have long been a cornerstone of the circuit, but Pokerstars insisted on changing the branding. This lasted only a year before they tried to put everything back how it was before. It looks as though they realise they are under pressure to live up to what is expected of a market leader, but don’t quite know which direction to head in.

 

Hard Facts

In conclusion we can see there are two sides to this story. While everything about Pokerstars has been on a downward trend for three years, their customer base doesn’t appear to be reacting. Sadly, one of the facts of life here is that the majority of online poker players are purely recreational, and we can see that these people don’t care much at all about these unpopular changes.

If this is true than we are in a situation where if enough pros move away from Pokerstars the games will become soft enough that people will start to return. This state of equilibrium tells us that Pokerstars understands very well just how much they can get away with abusing their customers. The market share figures are proof of that.

As mentioned above though, everything is now in place for a charge from either 888poker or partypoker. Both of Pokerstars’ main rivals have ploughed their resources into building a live circuit to rival the EPT, and both companies have an impressive roster of highly-respected stars happy to promote their brand.

We shouldn’t expect this status quo to shift too much in a short space of time, but the seeds have clearly been sown for a serious challenge to be laid down.

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