Daniel's Blog - V I P Program Changes At Pokerstars
Posted 09 December 2015 - 03:52 PM
DANIEL - POKER JOURNAL
VIP Program Changes At PokerStars
09 Dec 2015
I know many of you have been waiting for me to post a blog about the controversial changes to the VIP program. Before I share my thoughts on all of it, I'd like to start from the very beginning and explain how this all took place and then how it was messaged from there on out.
In October of 2014 PokerStars released a newsletter that said something to the effect of, "PokerStars is considering substantial changes to the VIP program in 2016." I'm going to share some facts with you that have likely never been made public, but they are facts and can be backed up by several people. Prior to that newsletter, significant VIP changes were scheduled to take place January 1, 2015! These had been agreed to by the previous owners and management. The reason that didn't happen was because of CEO David Baazov. Those inside the company were adamant that these changes needed to happen years ago and that it was imperative that they were made immediately. David was presented with plenty of internal data that showed quite clearly how the ecosystem was broken and that changes were inevitable considering both the escalated rate in which depositers were losing and the effect it had on the retention of these players.
Personally, I have said for many years changes were necessary. I said so during the previous management, and I knew that the current system was unsustainable long term and changes were inevitable. I think most people who had access to the internal data agreed unanimously that if no changes were made, the player pool would continue to shrink. I'm not going to spend time debating or explaining this, but what I do want share is why these changes were delayed a full year until January 1st, 2016: David Baazov.
It was David Baazov's decision to delay the changes a full year, because he felt it was the right thing to do. He felt as though it hadn't been communicated to players early enough, so despite understanding the necessity of the changes, he chose to give players an additional year of full benefits before making the cuts.
Fast forward to November of 2015. It was decided that the highest tier of the VIP program, SuperNova Elite, be cut from 63% rakeback down to 30%. The SNE players are obviously the highest volume customers that contribute a substantial amount of rake to the company. It was discussed internally, and PRM (Poker Room Managment) stood firm that SNE players should get a bump from 30% to 45% for 2016.
I've spent the last month having internal discussions in the hopes of delaying the changes until January 1st, 2017. We also discussed several other possibilities and I did my absolute best to find the best compromise possible for the players.
The company has acknowledged that the communication of the changes was too vague, and we should have done a far better job being clear in the messaging. In the end, the result of my discussions with the company is that I can announce that PokerStars has agreed to put $4 million into the ecosystem in 2016 by holding quarterly $1 million free roll tournaments open to all players. Obviously the professional players will benefit most from these free rolls as they are most likely to cash, but it also offers the entire player base some value.
I realize many of you will be disappointed that we couldn't delay the changes a full year. I'm also disappointed, but I promise you I did the absolute best I could to make sure the players voices were heard, and they were.
On that note, I want to take full responsibility for my role in the communications breakdown between PokerStars and the players. I didn't write the messaging, but there was more I could have done to help avoid this that I failed to do. I had the opportunity to ask the right questions in October 2014 about when these changes would take effect, but I failed to do that. Had I been more involved at the time, I could have addressed this issue prior to January 1st, 2015 and make sure that the messaging to the players was crystal clear that cuts to the VIP program were going to be implemented in 2016. I could have also made sure that the website didn't have any language referencing specifics as to what players should expect in 2016 if they reached SNE in 2015.
The fixes were quite simple, and I apologize for not being more up on this. I would have encouraged the messaging to be more clear, and for the website to have "to be determined" on the page that covers what benefits SNE players should expect rather than specific numbers.
What we knew as a company on January 1, 2015 is that there would be cuts to the VIP program in 2016. However, they were still collecting data and weren't sure what exactly the changes would look like until the second half of 2015. It did say in the October 2014 newsletter that the details of the changes would be released in the second half of 2015. Despite that, I'm not at all OK with the way in which this information was relayed to the players.
I was also able to ensure that players would have the opportunity to meet with the higher ups from here on out to discuss important issues in regards to the relationship between the company and the players. That has always been something PokerStars has done effectively, and it will continue to happen. I spoke with Dani Stern and Isaac Haxton as well as many other top online pros about joining me and the upper management in regularly scheduled meetings. I think this is extremely important. Communication the last 12-18 months between the players and the company has not been good enough and I think this will go a long way towards improving it.
As far as my role with the company, what I'm committed to is making sure that nothing like this ever happens again. I'm extremely embarrassed by this communications blunder and I'm committed to making sure that from now on I am fully up to date and briefed on any and all new promotions and potential changes to any policies.
As for the future, while this rightfully upset many players and was handled poorly, I am genuinely excited about the future. I do think there will be more players on PokerStars in 2016 than there was in 2015. I do believe that PokerStars is still the best place to to play online poker and will be going forward. I still believe they offer the best promotions, and I believe some of what's in store for 2016 and beyond will excite both professional and recreational players alike.
Posted 09 December 2015 - 03:54 PM
Four $1 Million Freerolls Planned for 2016
by Eric Hollreiser on December 9, 2015 3:29 PM
We are happy to announce plans to hold four $1 million freeroll tournaments in 2016 on PokerStars. These tournaments will surely create buzz and generate excitement among players at all skill and experience levels and the injection of $4 million into the economy will help many players' bankrolls. These tournaments will be on top of an already exciting - though not-yet-announced - series of promotions, events and new products that are planned for 2016.
We're doing everything we can to make 2016 an exciting year for poker, but recognize that 2015 has been tough for many of our players.
This year has been difficult for our depositing customers who have seen a reduction in their purchasing power of close to 20% due to the strengthening of the US dollar, the primary currency of poker gameplay, vs their local currencies, most notably the Euro and other European currencies. This has reduced the value of their deposits meaning they are unable to play as long as before with the same amount of money, exacerbating issues of retention of new and casual players we have already seen over the past few years due to an increasing imbalance in the ecosystem. While we cannot influence where currency exchange rates will go, we can make changes that we believe will improve retention of such players by lengthening the time they will be able to play, allowing them to have more fun at poker and hopefully becoming a lifetime player.
We have been taking steps - across the whole business - to address these changes. The recent three-day boycott by some players that disagree with our announced VIP changes did not have a significant impact on PokerStars, as traffic actually spiked through the period as a result of the start of our long-planned holiday promotion.
Of course that doesn't mean it went unnoticed by us. We care very deeply about what players say and what they expect of us. And we strive to live up to their expectations.
Some of our players feel we have not met their expectations in the recently announced changes to the PokerStars VIP program. Indeed, some players who support the VIP changes feel we should have done a better job communicating the changes. We first announced that there would be significant changes to the 2016 VIP program in October 2014, following a comprehensive review we had undertaken earlier that year, and repeated this several times throughout 2015, including telling players that details would be provided in October. In fact, we had considered making significant VIP changes to take effect in January 2015, but our new ownership at Amaya chose to delay the changes for another year.
In hindsight, we could have communicated to players more often that significant changes were coming in 2016. We could have been more explicit that these changes would be significant and would take effect in 2016. And we could have noted this on our VIP web pages that gave details of the program. There was no intention to deceive and certainly not to profit from this, as an increase in the number of Supernova Elites, who are on average net withdrawing players, does not provide a financial benefit to us. It was simply a function of a long internal process and an honest belief that we had given players sufficient notice.
We sincerely apologise to players who did not expect cuts as significant in 2016 as we announced on November 1st and recognize that some players may have chosen not to participate in the rewards program in 2015 had they known. Although we did not publicize it at the time, we did recognize that players might not be expecting as severe a decrease in awards, so we provided a higher level of reward in 2016 than originally planned and delayed implementing the full decrease in rewards until 2017. This was explicitly in recognition that players were grinding in 2015 in order to reap the maximum benefit for 2016.
We believe that these freerolls are further affirmation of our commitment to bring more excitement and recreational players to PokerStars, which is good for ALL players.
Most importantly, these changes are a critical component of our broad-based initiative to improve our online poker ecosystem by attracting more new players, improving the environment for recreational players and instituting loyalty programs that serve the majority of players.
A tremendous amount of analysis goes into making these decisions by PokerStars. Our poker room management team is staffed with many former poker pros. And we have examined all possible scenarios. We are making these changes for the long term health of the poker ecosystem and to put in place a system that is sustainable.
We will not alter those plans. The current VIP program is no longer fit for its purpose. When combined with the increasing skill gap in the online poker market, the result is an increasingly poor experience for recreational and new players.
Changes are needed and we are making them. The funds that previously went to these rewards will be placed in more and bigger online promotions, more consumer marketing campaigns to attract new players and research and development of innovative new products and features. We have mass consumer marketing campaigns featuring Cristiano Ronaldo and Neymar Jr; we're launching innovative new poker variants that take advantage of mobile platforms, social gaming and the popularity of other card-based strategy games and e-Sports; and levelling the playing field for recreational and new players by restricting the use of third party software and data mining that give an unfair edge to professionals.
As we have in the past, we will continue to make changes to ensure our ecosystem is healthy and vibrant. We know and understand that players won't always agree with these changes. We'll do our best to communicate them early and with as much transparency and frequency as possible.
In that spirit of transparency, we can tell you that we did see effects from the recent boycott that give us even greater confidence that our strategy is on the right track to improve the health of the ecosystem. During the three-day boycott we recorded the healthiest consecutive three-day ecosystem results of the year with steady net gaming revenue, even though our net-depositing players lost at a much lower rate than they have all year. As we have seen with Spin & Go's, which have higher retention levels than cash games due to the increased winning experiences provided to all players, we believe this decreased loss rate will result in those players' deposits lasting longer and retention rates improving, resulting in more deposits and more money in the system because players are enjoying their time at the tables more. This is the right foundation for us to build upon.
Our commitment to poker is as strong as ever. We believe that our actions will demonstrate this in the months and years ahead.
Posted 10 December 2015 - 03:02 AM
Posted 10 December 2015 - 03:31 PM
Posted 11 December 2015 - 01:34 PM
I'm sure dealing with Stars PR blunder sucks for DN but that's what happens when you work for The Man. DN is the face of Stars and I suspect he's getting a massive amount of heat. It's only going to get worse as the new ownership puts the squeeze on other parts of the organization in an attempt to maximize profits.
In the past, Stars always looked at doing what was right from the players perspective with the knowledge this would translate into becoming the dominant site over the long run since the other sites set the bar incredibly low for customer service and game integrity. This worked really well. Amaya had the chance to roll back the changes making it right for supernova's in 2016 but instead has choosen to take the short term profit.
Remember when the FCP poker site was closed due to the UIGA and DN along with Bob's help made absolutely sure the players were taken care of including a FCP points to Stars VPP conversion that was WAY above market value? I know Stars had a massive incentive to convert the players but most of us already played on Stars anyway. I'm pretty sure it was Daniel's insistence that made the players more than whole.
I predict this is the beginning of the end of DN's and Pokerstars relationship. Again, a very shortsighted play on their part.
Posted 15 December 2015 - 09:08 AM
Posted 31 December 2015 - 11:32 AM
Thank you for your follow-up pertaining to our new VIP offer for 2016.
We can certainly understand why you might be frustrated about these recent developments, and appreciate your passion on the subject.
However, as previously stated, we are believe these changes move towards a more balanced long-term poker economy and return the game back to one that rewards skill via winning at the tables rather than playing primarily for volume.
We also understand that not all players will agree with this decision and you are of course entitled to have your own opinion. Please note that we will continue to gather player's feedback once this new system is implemented; which means that further unplanned changes might take place. Perhaps in the future you will find our offer more appealing.
As it is, I am afraid our decision on the matter is final, and although we appreciate your feedback, we might not be able to continue discussing this subject with you.
Thank you in advance for your understanding.
Posted 31 December 2015 - 05:08 PM
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