PokerStars Affiliates Culled in Cost-Saving Measure

Global online-poker market leader PokerStars has begun a culling of affiliate accounts that appears to focus on affiliates with large percentages of older and higher-volume players, according to messages published on several industry bulletin boards, as well as social media.

Few reasons have been given to the affected affiliates by PokerStars, except generalized statements that these affiliates may be perceived as underperforming in terms of generating new signups, when compared to the monthly revenue share normally paid as part of Stars’ standard affiliate agreement.

FlushDraw has been able to determine the veracity of several of the affected affiliates’ claims.  One of the most outspoken statements castigating PokerStars was written by Markus Sonermo, the Swedish-based owner of poker.org and other sites.  Posting at prominent affiliate business site PokerAffiliateListings, Sanermo wrote the following, in part:

I would like to extend my “gratitude” to PokerStars for having closed down my affiliate account yesterday. The reason given was that they felt I had too many old players generating revenue to justify my monthly payment. As if we were on some sort of flat monthly deal.

For those of you who truly know me or have met me, I don’t care about their decision in a financial sense. If I was a cold hearted bean counter I might even agree with them. But what is right is right, and what isn’t just isn’t.

I believe they’re removing affiliates and “pro players” etc. to make their books look better for a potential sale. Or perhaps just to justify whatever the Amaya purchase was supposed to be about.

I congratulate you (PokerStars) on your short term gain. But know one thing, me and the people like me we will never forget. And we will never go away because this business is what we do and know and love. And we don’t do business with people who steal from us no matter who owns it.

I’m adding this smiley here (this is the one: ) at the end to make you my fellow affiliates understand that I am a happy man. A fortunate man.

All the best to you all. Chase that money and that dream, your money and your dream.

PS: I am putting my name to this because it is my name and I can do with it as I choose. But it has already happened in the past days to other “big” affiliates whom I will not mention.

Several other affiliates, at PAL and on other forums, reported receiving a similar cutoff by PokerStars.  A handful of the affected affiliates reported receiving unexplained seven-day termination notices from PokerStars.

Though Sanermo identified himself as doing many UK-targeted promotions, it is unknown at this time whether the cutback of PokerStars affiliates is focused on UK-targeting affiliates or is part of a larger, company-wide cost-cutting measure.

For the first time in its history, PokerStars (now a part of Amaya Gaming) is saddled with billions in corporate debt and may be looking at short-term restructuring and the trimming of financial “fat”.  The company has also recently terminated its relationships with a handful of sponsored players, including 2009 WSOP main event winner Joe Cada.

The move may also have some connection to the new licensing requirements coming into force November 1st in the United Kingdom.  Though UK traffic represents only a small percentage of Stars’ global market share, the United Kingdom may be thought of by PokerStars as very mature in player-acquisition terms, making UK-focused affiliates a likely target in any affiliate-trimming wave.

Whether the impetus comes from the held-over, older PokerStars management or is a directive from the new Amaya ownership also remains unknown.  The relatively one-sided nature of the deals affiliates sign with poker sites typically allows for the sites to annul the deals or change the terms with little advance notice, as happened here.  Such affiliate trimmings have been a sad backstory of the poker industry for at least a decade, previously involving PokerStars as well and many other prominent sites.

Among the inherent weaknesses of the affiliate system and the implied threats carried by the occurrence of these arbitrary affiliate trimmings is that by failing to honor their long-term commitments, poker sites actually incentivize some affiliates to act unscrupulously in an attempt to keep generating new business and remain in the sites’ good graces.  In this writer’s opinion, that’s simply bad for business and online poker itself in the long run.