The death of the Poker Network model Part 2

With more and more skins at poker networks joining the Tasmanian tiger and the Wooly Mammoth on the extinction list I’ve decided to take a look at the Poker Network Model.  In Part 1 of this series I offered up an overview of the poker network model, and now in this installment I will detail the two problems poker networks have always struggled with.

The problem as I see it with the poker network model is two-fold:

#1 – There are too many cooks in the kitchen, and some of them can’t cook

The biggest problems poker networks face is simply allowing poorly run skins to join the network. So what is a poorly run poker skin? For poker networks profitability doesn’t really mean well-run. The reason I say this is that some skins have solid traffic numbers but the vast majority of their players are rakeback grinders. These skins basically slowly bleed the poker ecology at the network, letting their winning players loose on the casual players of the other skins by offering them outstanding rakeback deals and deposit bonuses.

Poorly run skins can also be just utter screw-ups, steal money, offer poor customer service, or reneg on promised promotions. These skins need to be snuffed out immediately, but with such lax admission standards (think community college instead of Yale) most poker networks are just happy to add any old skin that could increase traffic.

Fortunately, many poker sites have started to catch on to this problem and are moving away from marketing towards high-volume players and back towards trying to attract new players.

#2 – The in-house competition between skins has proven to be fiercer and more destructive

A more abstract problem facing poker networks is in-house-competition. With so many skins basically sharing the same software, the same tournaments, the same promotions, and the same bonuses, it’s kind of difficult to say your product is better than other products which are exactly the same. So what happens is that some skins offer secret rakeback deals, or use their affiliates and sponsored pros to try to poach players from other skins on the network –often using the same secret rakeback deals or offering instant withdrawals through peer-to-peer transfers.

While issue #1 may be a solvable problem, issue #2 is always going to be there. The only way this becomes a non-issue is when skins are marketing to different segments of the online gaming population – for instance, perhaps one skin is a notable sportsbook while another is a major online casino, and yet another has some kind of “in” when it comes to Magic the Gathering or some other strategy game.