A farmer, bent on doubling the profits from his land,
Proceeded to set his soil a two-harvest demand.
Too intent thus on profit, harm himself he must needs:
Instead of corn, he now reaps corn-cockle and weeds.
– Ignacy Krasicki
Egregious taxes
Throughout history, people in power have imposed egregious taxes on those over whom they have power. Between the 10th and 12th centuries, English landowners were forced to pay “Danegeld,” a tax that was, in essence, protection money extorted from them by their Viking invaders. In the 14th century, Murad I of the Ottaman Empire introduced the practice of ‘Devşirme” (a blood tax, literally meaning “collecting” in Turkish) whereby Christian families living within the state had to offer up one son to the army. The boys were forced to convert to Islam and became the property of the sultan.
paid 50 rubles per year for the privilege of having facial hair
In 1535, Henry VIII of England introduced a “beard tax,” as did his daughter Elizabeth I during her reign. In 1724, Peter the Great brought the same ridiculous tax to the Russian people, creating a copper “beard token” as a receipt for those who had paid 50 rubles per year for the privilege of having facial hair.
In the early 1800s, women of the “lower” castes in India had to pay a tax called mulakkaram (translated literally as “breast tax”) if they wanted to cover their chests in public. Effectively making modesty a privilege of upper caste ladies, this tax rate was high and varied according to the size of the breasts in question.
Game of Monopoly
Companies with near monopolies wield their power over consumers similarly. In 1998, an anti-trust case was brought against Microsoft accusing the company of abusing its monopoly power on Intel-based PCs in its handling of OS and web browser sales. Between December 2007 and June 2008, a lack of competition in the GM food marketplace enabled Monsanto to raise the price of its weed killer Roundup by 134%.
In 2015, PokerStars had approximately 70% of the regulated global online poker market and as Isai Scheinberg sat in a room spraying his $4.9bn for silverfish, the company he sold the previous year to Amaya increased the rake, worsened the structures, killed the regional tours, gutted the customer service department, and reduced the loyalty program to a bunch of dusty chests.
“more rake is better” is now part of poker parlance
By 2016, PokerStars was a shadow of its former self, with player protests falling off deaf ears. The company sent ambassador Daniel Negreanu out to put lipstick on the pig, but he bungled it so badly that the phrase “more rake is better” is now part of poker parlance. A steady loss of market share ensued and by June 2021, a new market leader emerged in the form of GGPoker.
GGPoker’s rise
GGPoker started as a B2B network with a focus in Asian markets. In 2017, GGPoker. com and GGPoker.co.uk were launched and its flagship skin Natural8 moved into European markets via a variety of partnerships. Traffic on the site grew steadily as the company became known for its agility and innovation.
New features on GGPoker included an integrated staking platform, a built-in Smart HUD, card squeezing, and SnapCam. An agent system was deployed to encourage signups. An “all publicity is good publicity” approach was taken to marketing and the result was that GGPoker now leads the way in terms of poker tournaments, too. With the rumored purchase of World Series of Poker on the horizon, the future looks bright as they position themselves for the American market.
“We don’t rest on our laurels, we’ve reached #1 by constantly innovating and improving our games, promotions, and rewards — and you haven’t seen anything yet!” said the now-GGPoker ambassador Negreanu back in 2022. It appears that one of the things we hadn’t seen yet was an increase to cash game rake on the bigger games. Bear in mind, GGPoker’s rake is already much higher than the industry average.
Players boycott
There was perhaps a certain inevitability to a change of this nature. When successful companies cordon off the market, they do tend to ramp up their prices. On Monday, a thread was started on the 2+2 Poker Forum entitled “GGPoker rake massive increases – High Stakes community mass boycott” in which it was claimed that 90% of the highest volume players on the site were committed to a cessation of play in the $25/$50 games and higher.
The new rake structure has almost doubled and will make the vast majority of $25/$50 and $50/$100 games impossible to beat.
Even a super-human effort would likely end in failure.
GGPoker does advertise competitive rakeback incentives to offset the high rake. However, according to the thread’s original poster Mixgrill, “the numbers are misleading and generally false…Some players receive as little as 10%, and no winner receives more than 20%, due to the Player Value Index (PVI) system.”
Players want a more sustainable equilibrium
Mixgrill insists that the boycotting players’ objective is to work with GGPoker to create a sustainable long term playing environment in which it is possible for players to win money while the network continues to make healthy profits.
“The High Stakes community is far more connected than it has ever been, as players attempt to work together to combat different threats to the game. This boycott will showcase the negative effects of their changes quickly, so we can move back to a more sustainable equilibrium.”
VegasSlotsOnline News reached out to a number of players affected by the rake hike. Poker pro and Bitb Poker partner George Frogatt said that he spoke on behalf of the 80+ high stakes No-Limit Hold’em regulars who have committed to the boycott:
it’s an unprecedented level of greed”
“GGPoker have effectively doubled their rake at all high-stakes cash tables, now 14x the competition… It’s an unprecedented level of greed, and threatens the very existence of winning high-stakes poker players if they are allowed to get away with it…”
Frogatt emphasized the amount of rake that has been paid by him and the other regulars at GGPoker tables – tens of millions of dollars – and asked that the site return to a “plausibly sustainable environment.” He also warned that the players were more educated than ever on the effects of the high rake and would be sticking to their guns indefinitely.
“Within days, we have organized to completely boycott GGPoker until there is some kind of response… You can check the lobby and there are no established regs playing on the site any longer,” he said.
Damage done
Put simply, GGPoker has made this decision because it can and it is unlikely to reverse course. The beard tax lasted in Russia until 1772. Danegeld ceased in England in 1194, but was immediately replaced by carucage, a land tax introduced by Richard I. I guess the lesson there is if the Vikings don’t rob you, your King will.
Do not underestimate what people will tolerate. Devşirme lasted 500 years and was only abolished in 1828 to subdue a Christian uprising. The mulakkaram was abolished in 1803 but only after a woman named Nangeli bled to death after cutting off her breasts and presenting them to the tax collector in protest.
In the last couple of years, PokerStars introduced a loyalty scheme on par with what they had removed. They brought back the regional tours and they invested in customer service again. For me personally, it has made playing on there and traveling to their tour stops more appealing again, but for many others, I know that it’s a case of “once bitten, twice shy.” The damage is already done and they won’t be back.
Corn-cockle and weeds
PokerStars built a successful online brand because it created great software and a great user interface, just as GGPoker has done. In no small way, however, PokerStars rose to position of market leader because it flouted the UIGEA while partypoker and others obeyed the law. Similarly, GGPoker has gotten to the pole position by running roughshod over numerous regulations and deploying a questionable agent model for player acquisition, while PokerStars and others now fight clean.
it is fair to say that the poker community has had its fair share of turmoil
Now, with this rake hike, we are seeing GGPoker take another page out of the PokerStars playbook, one that hurts their most loyal players. Don’t get me wrong, poker players do not have a god-given right to make a living from the game and, in any case, many of these particular players are elite and will figure it out in some other player pools. History teaches us that plenty of industries involving vast numbers of people sometimes become less viable or go under altogether. But it is fair to say that the poker community has had its fair share of turmoil.
The attrition rate for players is huge in a game that gets tougher with each passing year. In the past, we have had our deposits stolen by UltimateBet, Absolute Poker, and Lock Poker. We have had our unsegregated deposits misappropriated for Full Tilt marketing campaigns and payouts to owners. We have had our funds seized by the US Department of Justice, held for months and, in some cases, years. The Americans among us have had their rights infringed upon by a bogus and unconstitutional law passed hastily, having been tacked onto the SAFE Port Act without discussion the last day before Congress adjourned for the 2006 elections.
The high stakes cash players might be reaping the results of GGPoker’s decision now, but if it is not careful and continues down this path, it is GGPoker who could ultimately reap the corn-cockle and weeds.