Impacts on poker business income: Illustrated with case studies
Online poker is a rapidly changing, cut-throat sector where platforms must consistently adapt to market circumstances and player desires to avoid going out of business. Since time immemorial, poker operators have relied on a mix of traditional commission models, like rake and tournament fees, and modern in-game perks to draw a tech-savvy clientele.
In this piece, Nikita Golodaev, Business Account Manager at EvenBet Gaming, shares valuable insights from his poker expertise, understanding of poker IT products, and business acumen. These insights can assist poker operators in optimizing their revenue streams through data-driven decision-making.
How Poker Rooms Remain Profitable
Poker operators primarily earn through commission-based models and additional in-game perks.
Rake in Cash Games: The traditional rake, or the small percentage taken from each cash game pot, is the primary source of revenue for poker rooms. This fee is essentially the payment players make to the platform for providing infrastructure, security, and access to games. The percentage usually varies based on game types, stakes, and regional market conditions.
Tournament Entry Fees: Another traditional revenue stream involves players paying entry fees to join tournaments. This fee includes the buy-in amount, forming the prize pool, and an extra fee that goes to the operator. For example, in a $10 tournament, a typical commission might be around $1, resulting in a $11 fee per player.
In-Game Enhancements: Beyond these well-known sources of income, operators can opt for more innovative features:
- Insurance: This option allows players to pay extra in high-stakes or large pot situations to safeguard their all-in bets. This feature is only available when the platform supports it.
- Rabbit Hunting: This feature lets players pay a nominal fee to see what cards would have appeared if the game had continued after the flop or the turn. It serves as a learning opportunity and extra entertainment for players.
- Tip the Dealer: Recently introduced by EvenBet Gaming, this feature allows players to reward dealers for their professionalism or well-run games. A portion of this tip goes to the operator.
- Customization: Personalization options, such as digital avatars, themed card decks, table designs, and other customization, create a unique player experience and make your poker room stand out. These features also generate additional income.
- Club-Based Revenue Models: Some platforms incorporate smaller, in-house poker clubs within the main poker room. These clubs generate revenue by purchasing virtual money necessary to run the games and rarely a small rake percentage, benefiting both the club and the main operator.
Together, these revenue streams create a stable income structure.
What Influences Poker Operators' Profits
A cocktail of internal and external factors affects the revenue streams of any given poker room. While external factors are like forces of nature to be reckoned with, internal factors can be controlled and leveraged to your advantage.
External Factors
External factors are beyond the control of the poker operator and are mainly influenced by regulatory frameworks, market competition, economic conditions, and technological shifts.
Regulatory Changes and Compliance: Operators must adjust to changing regulations and comply with them to maintain player trust and long-term stability. However, staying up-to-date with the latest regulations increases operational costs.
Market Competition: The online poker space is more crowded than ever, with constant innovation, unique game formats, superior customer service, and exclusive promotions being essential for standing out.
Economic and Social Trends: These factors influence player behavior. For example, the pandemic drove a surge in online poker as physical casinos closed. Conversely, during an economic downturn, players tend to spend less on gaming and limit their time in poker rooms.
Technological Advances: New technology continuously reshapes the industry, with mobile gaming, blockchain-based payments, and advanced AI-driven analytics improving player experience, fraud prevention, and overall efficiency.
Internal Factors
Internal factors include strategies that operators can control and improve upon to attract more revenue. These include player acquisition and retention methods, innovative game offerings, and effective marketing approaches.
Player Acquisition Strategies: Targeted ads, influencer marketing, affiliate and agent networks, SEO, and content marketing are essential for attracting younger audiences and driving organic growth.
Loyalty & Retention Programs: Retaining players is just as important as acquiring them. VIP memberships, exclusive rewards, private tournaments, and enhanced withdrawal limits keep high-value players engaged. Gamification, such as leaderboards, custom achievements, and tiered rewards, fosters a greater sense of community and player retention.
Innovative Game Features: Poker must evolve to stay competitive. Operators should experiment with new variants like fast-fold and short-deck poker, skill-based betting features, and well-structured tournament schedules.
Examples of Poker Operator Profit Increases
Successful poker operators have increased their revenue by implementing strategies like data-driven decision-making, innovative in-game features, and integration.
VGW Holdings Limited, an Australian gambling company, reported a record revenue of $4.2 billion before prize payouts in the 2024 fiscal year, with Global Poker, its sweepstakes online poker platform, generating approximately $203 million in revenue during the same period. This case demonstrates that integrating sweepstakes models with poker platforms allows operators to expand into regions with strict gambling laws while also boosting player engagement and revenue.
In another example, EvenBet Gaming collaborated with a sports betting operator to integrate poker into their existing gaming services, aiming to increase revenue and enhance player retention. The integration generated a steady flow of new, active, and returning players and a higher revenue for the operator.
Final Thoughts
To maximize revenue as an online poker operator, you must carefully balance external challenges with internal innovations. External factors, such as regulatory changes, market competition, and technological advances, set the stage for the industry. Operators must adapt swiftly to these factors. However, it's internal strategies, such as effective player acquisition, loyalty programs, and innovative game formats, that ultimately determine success - and these are the factors operators have control over.
Poker operators can earn profit through commission-based models like rake in cash games and tournament entry fees, as well as additional in-game perks such as insurance, rabbit hunting, tipping the dealer, and customization. Regulatory changes, market competition, economic conditions, social trends, and technological advances are external factors that can impact a poker room's revenue streams. Strategies for player acquisition, loyalty and retention programs, innovative game features, and effective marketing approaches can help operators control and leverage internal factors to optimize their revenue. By implementing data-driven decision-making, innovative in-game features, and integration, successful poker operators have increased their profits significantly.
