INDUSTRY FORUM

  • Send9

    How is it possible that DFS sites are increasing rake instead of decreasing it? They have all shown that they’re profitable, why be so greedy and try to take more. This isn’t helping grow the industry. Pokerstars recently tried to increase rake but poker players pushed back and Pokerstars ended up leaving it alone. We need to do the same.

  • Priptonite

    • Blogger of the Month

    @Send9 said...

    How is it possible that DFS sites are increasing rake instead of decreasing it? They have all shown that they’re profitable, why be so greedy and try to take more. This isn’t helping grow the industry. Pokerstars recently tried to increase rake but poker players pushed back and Pokerstars ended up leaving it alone. We need to do the same.

    What site has shown that it’s profitable?

  • GETMONEYY43

    @Priptonite said...

    What site has shown that it’s profitable?

    i read on fanduels they made 38m last quarter

  • db730

    Senior VP of Operations

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    @GETMONEYY43 said...

    i read on fanduels they made 38m last quarter

    Those numbers don’t count how much they reinvest in advertising & spend on employee salaries, servers etc…..

  • Yukerboy

    • Blogger of the Month

    Oooohhh, the rake thing again.

    They have every right to rake up to 100%. You have every right to choose not to play. Not only that, you have every right to build a competing website that takes less rake.

    Sometimes, the best way to beat the house is to invest in one.

  • Redskins4

    Pigs get fat, hogs get slaughtered.

  • Myprimetime

    Both sites has stated that they did not turn a profit last year, FYI.

  • Myprimetime

    FanDuel wants to go public – they are dominating and increasing market share (meaning DK is losing market share). That rake isn’t getting lowered anytime soon.

  • theseige

    • 2015 DraftKings FFWC Finalist

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    @Yukerboy said...

    Oooohhh, the rake thing again.

    They have every right to rake up to 100%. You have every right to choose not to play. Not only that, you have every right to build a competing website that takes less rake.

    Sometimes, the best way to beat the house is to invest in one.

    This isn’t true at all, look at what poker players did when Pokerstars tried to increase the rake, we absolutely have a right to complain/comment or whatever about the rake, it affects the game that we love.

    Its absolutely a problem and something we need to notice and care about if we want DFS to have any staying power

  • Yukerboy

    • Blogger of the Month

    @theseige said...

    This isn’t true at all, look at what poker players did when Pokerstars tried to increase the rake, we absolutely have a right to complain/comment or whatever about the rake, it affects the game that we love.

    Its absolutely a problem and something we need to notice and care about if we want DFS to have any staying power

    Everything I said is 100% true.

    I never said you do not have the right to complain.

  • einars

    @Yukerboy said...

    They have every right to rake up to 100%. You have every right to choose not to play

    this^^

  • einars

    @Send9 said...

    They have all shown that they’re profitable

    i am almost positive that none of the sites are making money yet.

  • zpruitt3

    FanDuel is not yet profitable. There is an article about Eccles and FD in January’s Forbes issue.

  • MTro86

    RG Writer

    If the sites can’t make any money without raising the rake to a level where none of the players can profit, what does that mean for the future of the industry. The only solution is an affordable (and reliable) stat feed company. Anyone want to start one?

  • Cal

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    @Send9 said...

    How is it possible that DFS sites are increasing rake instead of decreasing it? They have all shown that they’re profitable, why be so greedy and try to take more. This isn’t helping grow the industry. Pokerstars recently tried to increase rake but poker players pushed back and Pokerstars ended up leaving it alone. We need to do the same.

    Send9, it’s important to understand that none of these sites are profitable. They are funded by investment capital and are in full on player acquisition mode, spending tens of millions of dollars on television commercials and team sponsorships.

    How that should affect rake is a highly opinionated discussion, but we need to get the facts straight from the outset.

  • Yukerboy

    • Blogger of the Month

    Period Entry Fees Prizes Revenue Paid Actives
    Q1 2014 $62,712,251 $57,335,607 $5,376,644 110,032
    Q2 2014 $78,612,944 $72,436,034 $6,176,910 93,961
    Q3 2014 $109,695,702 $100,801,278 $8,894,423 519,310
    Q4 2014 $370,703,531 $333,889,866 $36,813,665 1,012,265

    Fanduel is showing less than 10% revenue from the entry fees, but this includes overlays, free rolls, etc…

  • Troll4MVP

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    @Cal said...

    Send9, it’s important to understand that none of these sites are profitable. They are funded by investment capital and are in full on player acquisition mode, spending tens of millions of dollars on television commercials and team sponsorships.

    How that should affect rake is a highly opinionated discussion, but we need to get the facts straight from the outset.

    Yeah, having this discussion without having an understanding of the sites’ finances is pointless. Rake is going to continue to rise IMO. As players, we can combat this by selectively playing games with relatively lower rake, but it is pretty unrealistic to expect rake to stay constant or decrease.

  • MTro86

    RG Writer

    @Cal said...

    Send9, it’s important to understand that none of these sites are profitable. They are funded by investment capital and are in full on player acquisition mode, spending tens of millions of dollars on television commercials and team sponsorships.

    How that should affect rake is a highly opinionated discussion, but we need to get the facts straight from the outset.

    The issue I have with this is that if you are enticing the new players with these ads and then immediately punch them in the face once they show up, what good is it? Isn’t player retention just as important as player acquisition? If players lose money too fast, what good is it all? They have to be able to find a balance that keeps the ones they got around longer, right?

  • GETMONEYY43

    @MTro86 said...

    The issue I have with this is that if you are enticing the new players with these ads and then immediately punch them in the face once they show up, what good is it? Isn’t player retention just as important as player acquisition? If players lose money too fast, what good is it all? They have to be able to find a balance that keeps the ones they got around longer, right?

    mtro86 the points your are making are spot on imo

  • alsmizzle

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    @Troll4MVP said...

    we can combat this by selectively playing games with relatively lower rake, but it is pretty unrealistic to expect rake to stay constant or decrease.

    I would 100% agree with this, and would add why would it decrease if the games keep filling with the increased rake? I would love a standardized 10% rake max on all games, but if they charge 15-20% and the games sell out, why would they make a move to cost themselves revenue?

  • Cal

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    @MTro86 said...

    The issue I have with this is that if you are enticing the new players with these ads and then immediately punch them in the face once they show up, what good is it? Isn’t player retention just as important as player acquisition? If players lose money too fast, what good is it all? They have to be able to find a balance that keeps the ones they got around longer, right?

    Your post seems to imply this is a dying industry. The opposite is true – Fanduel’s numbers are exploding and the same subset of players is playing more year over year. Excessive rake does have a negative effect on ecology at some point but it’s too early to tell what that point is for DFS.

  • MTro86

    RG Writer

    No, not that it’s dying right now, but that this strategy might be a long term problem, no?

    EDIT: We don’t want it to be a flash in the pan. Come from out of nowhere, massive one minute, then crash.

  • Myprimetime

    Market is exploding – supposed to be 20x this size by 2020.

    Rake is not what they are concerned about yet. The post above is a good point about the fact they keep filling. It’s the players who allow large rake. If FD didn’t cap entries rake would be much higher as the market has shown the ability to withstand it to date. Cash games would be a different story.

  • pmsimkins

    • 2014 FanDuel WFBC Finalist

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    @MTro86 said...

    The issue I have with this is that if you are enticing the new players with these ads and then immediately punch them in the face once they show up, what good is it? Isn’t player retention just as important as player acquisition? If players lose money too fast, what good is it all? They have to be able to find a balance that keeps the ones they got around longer, right?

    I’d guess that short term new player retention has virtually nothing to do with rake. Most people are extremely short sighted and results oriented. Retaining them comes down to luck, as in whether they do decently the first few times they play. The ones who do stick and get addicted. The ones who don’t leave. The site doesn’t have much control over this, so they spend as much as they can to get as many new depositors as possible.

  • Cal

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    @pmsimkins said...

    I’d guess that short term new player retention has virtually nothing to do with rake. Most people are extremely short sighted and results oriented. Retaining them comes down to luck, as in whether they do decently the first few times they play. The ones who do stick and get addicted. The ones who don’t leave. The site doesn’t have much control over this, so they spend as much as they can to get as many new depositors as possible.

    This comes off as jaded to me, especially with the mention of addiction and no mention of hobby. Plenty of initial losers become regulars. Some of them welcome the challenge and do everything they can to become better players – that’s what leads many to do the Google strategy searches that land them on this site. Others just love it as a fun hobby and don’t mind if they lose a little money – there are hundreds of thousands of this type of user during NFL.

  • Z06Fanatic

    @Send9 said...

    How is it possible that DFS sites are increasing rake instead of decreasing it? They have all shown that they’re profitable, why be so greedy and try to take more. This isn’t helping grow the industry. Pokerstars recently tried to increase rake but poker players pushed back and Pokerstars ended up leaving it alone. We need to do the same.

    lol @ being greedy…..these sites are in business to make money – they’re allowed to charge whatever rake they want….I love how people will complain about rake yet have no problem fleecing players who are terrible – if you don’t like it don’t play, no one cares.

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