the rakeback debate

Been a while since I blogged about anything gaming industry related and about time I contributed my views to the ongoing debate on rakeback that seems to have captured the imagination of many in the affiliate world.

If you haven’t read the ‘offending’ article that sparked the saga, the views of Peter Marcus, William Hill Online’s COO, can be found here.

I’m going to stay clear of any discussion on whether, as a director of an operation recently offering rakeback, Marcus’ views are hypocritical, and focus on whether the facts he makes are accurate and can be substantiated.

What’s most interesting is the intensity that this debate has taken. There has always been significant opposition from a number of operators towards rakeback affiliates and licensees. Some may argue, rightly so. For me, the key is whether such affiliates and licensees are providing additional value to the players through other channels. If they are, then fair play to them – they’re using the tools they have to make money, whilst still providing an educational service to the player.

Now, if you take a close look at one of the most successful rakeback sites, RakeTheRake.com, the main focus is undoubtedly on achieving the best rakeback offer available. It is also evident that the poker rooms offering bespoke rake races to this affiliate are lapping up his traffic. Does he offer another service to players beyond this? Well, I’ll leave you to decide that.

Back to the bigger picture – if you’ve read my previous industry post, you’ll know that I disagree with the view that the affiliate’s role is simply to drive traffic, although Peter Marcus is 100% right to point to the need to avoid the cannibalisation of traffic. However, rakeback is not the prime proponent of this.

Operators need to look at the way they market their products. The bonus-led culture we work in has inspired rakeback, and is the main reason why companies are “stealing each other’s customers” as Marcus states. Rakeback is not the problem, backwards marketing strategies are. Poker rooms need to position themselves further apart and provide their players with something differentiable if they want to force the rakeback affiliate’s hand.

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