Essence – New poker rake re-distribution
Thursday, July 29th, 2010On the 15th of July 2010 Ongame network (Betsson Poker) has released a new rake redistribution model called Essence. The target of Essence is to give the Ongame network’s poker operators a long-term growth, increased revenues and a healthy network economy and that way benefit players.
What is Essence?
The main difference between the old model and the Essence model of valuing players is that a player’s style of play is now taken into account. Using the new model, rake is calculated based on pot contribution and the player’s historical performance. The problem with calculating a player’s value with the old valuation is that winning players are valued too highly, while players who lose money are valued too low.
In Essence each player is assigned a coefficient, based on the past 90 days’ performance in terms of the monetary end result. The coefficient is transformed and normalized to reflect the relative skill gap between the players in the hand. Until they have played 500 hands, players are assigned the default coefficient.
Each player is assigned an amount of rake based upon their coefficient in relation to the opposition’s coefficients and the amount of money they contributed to the pot.
If all players at a table have the same skill level, then the rake would be distributed in the same way as before Essence.
Essence will only affect cash game rake. Tournament rake will still be collected as previously; the house-fee set on tournament buy-ins.
Loyalty program/Player points – Players will see the difference between the old and new setup in the way they accumulate player points in the loyalty programs, players will receive more or less points than before depending on their style of play.
Fully integrated real time solution – Since the model is a change in the core rake algorithm it will be fully integrated with all systems cascading the player re-evaluation throughout the value chain in a transparent way.
Why Essence?
The maximum rake extracted over any period of time equals the losses of the losing players.
Industry mistake – all players have been valued in the same way on game activity no matter if they are winning money from other players or contributing money to the system by losing.
Each dollar won or lost by players has a financial value
There is a gap between current and real valuation of players
The gap has existed in the industry since day one
All players will be profitable even if value change
No negative coefficients
