PokerStars Institutes New Retroactive Affiliate Policy

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Thursday, May 7th, 2015 | Written by Lucy Brown

On May 1st, PokerStars announced a major overhaul of its affiliate program model by ending its previous life-time revenue sharing approach in favor of a new two-year maximum deal. PokerStars confirmed the changes in an e-mail sent to its affiliates on Friday, with the notice subsequently making its way onto a number of poker forums. As an extract of the e-mail reads:

“From June 1, 2015, PokerStars will pay revenue shares to affiliates for only the first two years of activity on a player’s account. This will affect all referrals by affiliates, including retrospectively affecting those players referred prior to June 1, 2015.”

Affiliates Revenues For Just Two Years

Lifetime rakes have historically been paid to affiliates for those players they have channeled towards the various online poker sites, meaning PokerStars has continued paying affiliates for customers recruited as far back as the mid-2000s when the site first experienced a dramatic surge in popularity. At the beginning of June, however, PokerStars will instigate its retroactive policy in which June 1, 2013 becomes the new cut-off point for past affiliate business, with no “grandfather clause” considered for past affiliate customers. Explaining the need to adapt to a challenging and ever-shifting global iPoker industry, the e-mail read:

“We believe that this change will ensure that the PokerStars’ affiliate program rewards affiliates who join PokerStars in introducing the game to new audiences rather than the current program which disproportionately pays affiliates for rake generated by existing players.”

Extended Length Of Required Notice

According to its present terms and condition, PokerStars must give affiliates a 14 day notice of change to either accept its changes or alternatively drop PokerStars from their website affiliate promotions altogether. This time around, however, PokerStars recognizes the “significant impact” the changes will have on some affiliates, and therefore granted affiliates a 30 day period to make their decision. Calling on affiliates to accept necessary changes in their working relationship with PokerStars, the e-mail highlighted new opportunities going forward, stating:

“PokerStars is launching a series of new and exciting efforts to drive significant growth in the poker economy. We believe that these efforts provide a great business opportunity for affiliates who choose to join us in growing the poker world.”

Changing Times

Since Amaya Gaming acquired PokerStars for $4.9 billion in 2014, the business has undergone a series of transformations primarily designed to grow poker by creating new innovative poker games, entering new markets, and generating consumer demand through its marketing and promotional efforts.” As the e-mail continues, “By spending our marketing funds on attracting new players to the game rather than on paying for past marketing efforts, we believe that we will be able to grow the game of poker.”

Without a doubt, PokerStars has a bigger responsibility than most when it comes to stimulating interest in the game, as the poker room is the undisputed leader of the global online poker market, with around half the world’s cash game traffic. To put things into perspective, PokerStars has a 7 day average of 17,500 cash game players, rising to 25,619 players during peak times, whereas for 888poker in second place that number drops to just 2,200 cash players and 3,334 during peak times, according to PokerScout.

Poker Community Opinion Divided

Consequently, changes to PokerStars policy will have an exponentially bigger impact on affiliate businesses than practically all the other online poker operators combined. With affiliate revenues to be badly hit, there has naturally been an instant backlash from frustrated affiliates, especially with many affiliates having been in receipt of PokerStar rakes for eons. PokerSource co-founder Jay Lakin, for instance, has complained that many of the non-US players they’ve sent to PokerStars since 2005 are still active on the site, and therefore called upon the site to reconsider its decision and rescind the announced policy change, which has left “a very bitter taste” in the mouth.

One of the industry’s largest affiliates, who decided to remain anonymous, also pointed out that PokerStars may actually be going against its stated aim to grow the online poker industry, and highlighting the important part affiliates play in growing the poker economy, explained to pocketfives:

“Affiliates build momentum and traction through player and tournament recognition. They educate players in a complicated world of local regulations. Good affiliates deliver value in more than referred players – they remind people of what a great game poker is without having to sell a particular brand. Stars has a reputation for looking after the community at all levels and it seems that now is a good time for them to demonstrate their overall trustworthiness with their longstanding partners through other methods.”

Meanwhile, other affiliates seem to recognize the rationality of PokerStars’ policy change, and say that such steps are natural considering the site is a virtual monopoly with no real competition. Chris Grove from Online Poker Report further pointed out that other online poker rooms have undertaken “similarly aggressive actions toward affiliates in past.”