Transparency

For months now, we’ve been hearing about the effects of Black Friday on the industry and how it supposedly levelled the playing field for operators who exited the US Market post-UIGEA. However, there’s one major issue that was brought to the forefront on Black Friday which has hardly been discussed in the media, which is surprising since it benefits the operators who left the US market the most.

That issue is transparency. Before April 15^th 2010, PokerStars and Full Tilt Poker were highly regarded among players as two of the most trustworthy operators – companies who would ‘put things right’ if things went wrong, who you could trust with your money, and who were accountable to governments and reputable regulators if the worst happened.

But then Black Friday arrived, and shone a light on the extraordinarily complex web of companies that comprised PokerStars, Full Tilt Poker, and the Cereus network, with the DOJ indictments naming businesses throughout the world that players never knew existed, and listing bank accounts in more countries still. But the DOJ indictments barely scratched the surface. According to a court decision in early 2011, the PokerStars group consisted of at least 23 separate companies throughout the world, providing a variety of services including poker training, treasury management, live event sponsorship, and marketing. Furthermore, since Black Friday players themselves and popular poker blogs such as Subject:Poker have uncovered the complex corporate structure of Full Tilt Poker and the many faraway companies involved.

Online poker businesses have this complex corporate structure because it allows them to have their cake and eat it too. If you were building your perfect poker site from scratch, you might put your HQ in the Isle of Man (so you can take advantage of the respected licensing regime and 0% corporation tax), your marketing company in London (where marketing and TV production talent is easily available) your software development company in Dublin (which is rich in IT talent due to its high concentration of technology companies, and also has low corporation tax) and your treasury company in Switzerland or on an island somewhere in the Caribbean where nasty lawyers and taxmen can’t get to it. Maybe you’d start up a few additional companies to get licences in Europe, or in different time zones so you can provide 24-hour support. Oh, and you’ll need a holding company or three for all of those, obviously.

You can see how the massive corporate giant builds! Having a structure like this allows you to get the best of everything – you can be as tax efficient as possible by putting your big money-making companies in the most tax-friendly jurisdictions, while still being able to employ the best staff by not forcing them to move to inconvenient locations in the Mediterranean.

This sort of structure makes sense to accountants and lawyers (and frankly, I’m surprised that more online poker companies don’t have similar structures) but, to a player looking in from the outside, it looks suspicious. Many players find it difficult to trust online poker companies at the best of times, but when they find out that they’re not actually dealing with the brand directly but one of a myriad of confusingly-named subsidiaries, their level of trust plummets still further.

First and foremost, players want online poker sites to be accountable. If I go into Tesco to buy milk and get charged for a trolley load of things I didn’t buy, I know that if all else fails I can go to Tesco PLC to complain. If I buy a television from Amazon.com and it’s never delivered, I know that if I can’t work things out with their support team or my bank, I can complain to Amazon EU SARL. If my case is really serious and I’ve exhausted every other avenue, I can even sue one of these companies.

But with online poker companies, that’s not always the case. It’s not necessarily clear which of the many companies you’re actually doing business with, what country that company is based in, and what they are responsible for. Players can feel powerless if they have a trivial support problem, let alone if they have a serious dispute over a significant amount of money. Starting with the poker site’s regulator (if they have one) is a good beginning – but what if you don’t know how to contact that regulator – or what if you don’t speak the language of the country where they are based?

That feeling of powerlessness is extremely frustrating, and sites can do a lot to ease it by being transparent about who the player is dealing with and where they can go if they have a dispute.

But it’s not just powerlessness. When something goes wrong for an online poker company, often that company will shut down all communication for fear of saying the wrong thing. If the company does speak, it’s through lawyers or sponsored professionals – or the communication is written in such a guarded, corporate way as to sound more like a press release than something that really addresses the issues. Even in the best of times, online poker sites often communicate with their customers through anonymous media like internet forums or Twitter, using pseudonyms and not real names.

Pseudonyms, screen names and anonymity do not go hand in hand with transparency and accountability. Players want to deal with a real person – a public face of the company, and will forgive and even empathise a lot easier when they see a fallible human being is at the reigns. Somebody who knows what they are talking about, who has the power to solve any issues they might have, and who doesn’t patronise them with corporate bullshit. A sponsored pro isn’t enough here – it has to be somebody who has real power to change things, and who can get them done without going through endless layers of approval. Frankly, I’d rather have Jeremy Clarkson fronting my poker site than some anonymous, corporate, trying-to-please everyone shill – because love him or hate him, most people respect honesty and straightforwardness more than they do spin and buzzwords.

So why is this so rare? Public companies like bwin.Party and 888 should be making a big deal out of the fact that their financials are published for all to see and their board of directors are real people with real faces. Their employees have nothing to hide and should be proud to put their real face and name behind their product. But they’re not – and really the only person who has got this right in the past is Lee Jones when representing PokerStars and the Cake Poker Network. Jones was able to build a real rapport with players over the years, and despite the fact that the businesses he’s represented have had the occasional scandal, he is still highly regarded and his reputation is intact.

In the post-Black Friday era, all online poker operators are going to come under more scrutiny from players, governments, regulators and the media. Those who are able to do business in a transparent way, who hold themselves accountable for their actions, and who are able to provide a trustworthy public face should have a distinct advantage in this new, ever-more suspicious environment. Will your business be one of them?

This article originally appeared in InsidePoker Business, Nov-Dec 2011.

Good Software is Sticky

In the past few months much has been spoken, thought and written about ‘good software’ in the online poker industry. Good software, it has been said, is what made PokerStars and Full Tilt Poker the biggest poker sites in the world. In the last issue of InsidePoker Business, columnist Phil Shaw dedicated an article to the features that made these sites stand out from the crowd.

I agree with Phil that good software is one of the most important differentiating factors that an online poker business can have. Good software is ‘sticky’ – it helps you to retain players and builds loyalty, because a great deal of players are reluctant to convert to a competing site which has inferior software, even if other factors such as promotions or bonuses are better. To many players, perhaps even the majority, software is more of a factor in deciding where to play than game integrity and security, which tend to operate in the background with little visibility for the player. But what makes good software and how can you make yours better?

Let’s look at an unrelated company which is renowned for producing world-leading software. Apple is extremely topical at the moment, with the release of their latest operating system and smartphone, and the death of one of the company’s founders Steve Jobs. Apple has a reputation for producing some of the most user-friendly software available and has a loyal fan base eager to upgrade to its latest product.

You might think that Apple’s software has all of the leading edge features, but actually that’s not the case. Apple’s software is often criticised for lacking some of the functions available on competing devices. For example, Apple is regularly slated for not having support for the Adobe Flash platform on its devices, which competing Android, Blackberry and Windows mobile devices do. In fact, many have predicted that Android’s superior software features would give it an edge that would eventually wipe the iPhone off the map.

Apple knows that good software isn’t necessarily about having the most features. It’s about having features that are presented well and that work intuitively, without needing explanation. It’s also about introducing features that people will actually use, not offering endless levels of customisation for a tiny percentage of end-users.

Thus, an iPhone just works as you expect. The way you interact with the phone is natural. The interface is consistent across different applications. There are few unnecessary ‘expert’ features, and cool new offerings are packaged together in useful ways. There is a lot for online poker to learn here!

In recent years, there has been a tendency for online poker sites to focus on features aimed at advanced users, and to provide those advanced users with very powerful tools to help their game. This might have come about as site representatives have increasingly used player feedback from internet forums and elsewhere to plan their future product development strategy.

At first glance this seems like a sensible approach, as advanced users typically generate more revenue per capita than other player demographics. However, in some cases this has come at the cost of developing strong features for the remaining majority of players. The problem with using feedback from any vocal player group is that the players who are giving the feedback usually want you to hand them the money from every other player on a silver platter!

In my opinion, this has resulted in a great imbalance, with some online poker providers offering so many advanced features that the user interface is practically incomprehensible. This is particularly the case with smaller poker networks, who are keen to introduce features that will increase revenue immediately. Thus, we’ve seen features like ‘Auto Rebuy’ for ring games, and the ability to manage and play at insurmountable numbers of tables, tacked onto dated software not designed with expansion in mind, with these new additions sitting uncomfortably alongside older features and looking out of place.

Some sites seem to be focusing almost exclusively on introducing features to enable people who are already multitabling to do so even more. Perhaps these improvements will enable this tiny minority of players to play 10 tables instead of 8. But let me ask you this – would you rather implement a feature that helped 2% of your players go from playing 8 tables to 10 tables, or would you prefer a feature that helped 90% of your players move from playing one table to two?

There is an entire third-party ecosystem built around expert players, with hotkey programs, table managers, and fish finders among many pieces of software designed to provide the niche features that aren’t available in the mainstream. Therefore, your expert customers gain little when you implement a feature which is already available in a piece of third-party software. Most likely, they’ve already paid for it!

This focus on the expert user has meant that user interface design and simplicity has suffered greatly. A typical poker table is now covered in checkboxes, banners, pop-ups and buttons, often inconsistent in size, appearance and behaviour. This is one of the places where we can learn from Apple. Apple keeps the number of ways that a user can interact with its interface to a minimum – if an option can be either off or on, then a toggle switch is shown, and never anything else. Once the user has worked out how to use this one switch, they then know how to use every similar option in the software. 

Think about how you can make the look and feel of your software consistent across the entire product. From the beginning of your customer’s interaction with your business online, the behaviour of key features should be the same so that by the time your customer is signing up for an account and playing in the games, they already know how your software will behave. A user shouldn’t be faced with a steep learning curve every time you present them with a dialog – they should already know how to use it, because they’ve interacted with similar dialogs before. If you use a checkbox to turn something off and on somewhere in your software, every similar option should also be a checkbox – and not a mixture of radio buttons, menu selections and toggles.

Another thing that Apple regularly does is to hide options which are unnecessary or irrelevant. Turn an option off, and all of its confusing sub-options magically disappear. In addition, Apple products tend not to support legacy features used by a minority of people. This approach can also be extended to poker software – if there is an option that few players ever use, why have it? A good example is the ‘Auto Post Blinds’ checkbox which for some reason is still a staple part of poker software, despite the fact that a huge majority of players check it immediately at the beginning of a session, and never touch it again. This checkbox belongs in the past, along with so many others.

Above all, Apple software removes the distractions and focuses the user on the task in hand. We should do the same, and allow the user to focus on the game of poker. After all, that’s why they’re playing.

This article originally appeared in InsidePoker Business, Sep-Oct 2011.

Continuity of Message

Throughout the past few years, businesses in our industry have started to realise that poker has become a truly global game. Even before Black Friday, the USA no longer represented the overwhelming majority of players as it once did, and companies couldn’t rely on the US market alone if they wanted to be successful.

Poker companies began to acknowledge the importance of carefully tailoring their product to each market, and as a result, we saw classic poker books from authors like David Sklansky, Dan Harrington and Doyle Brunson being translated into Spanish, German, and French. Online poker sites introduced foreign-language websites, support teams and game software. Magazines and discussion forums sprung up for every market, live poker tours started to flourish in places we never thought possible, and celebrities and pros from many new countries were signed up to represent the game.

Localisation of your product is hugely important, and it’s easy to see why – simply look at a company which doesn’t bother to localise it’s product to your country, and see how you feel. Look at the TV advertising from a company such as IBM or Chevrolet for example, who reuse the same advertising and branding concepts in Europe as they do in the USA. When was the last time you bought any product from IBM? Would you even consider buying a car from Chevrolet?

The simple fact is that people don’t tend to like products that are too ‘foreign’ unless they evoke a particular image of quality or luxury (such as French perfume or Italian fashion). Companies in many types of industry regularly forget this however, and the results are often disastrous. Take the infamous case of the Coca Cola Company, who attempted to launch their bottled water brand ‘Dasani’ in the UK a few years ago. Dasani is water taken from the mains, and then put through a very advanced purification process before being bottled and sold. Water purified in this way is huge business in the USA, and you can’t walk any Las Vegas poker room without seeing bottles of it on the tray of every cocktail waitress. But Coca Cola didn’t tailor their product to the European market in any way, and the press ran with the story that Dasani was simply ‘bottled tap water’, killing any hope that the product would be successful.

It seems that online poker companies have realised that, while poker is a fundamentally American game, you can tailor the product to individual markets like Britain, Russia or Australia and make it even more successful in those regions. But it’s important that the local message you send to those regions persists from the first moment that the customer interacts with your product until the last, and this is something that many operators are getting wrong.

One example that never ceases to irritate me is the ‘English only’ rule. This rule states that players must only chat at the tables in the English language. It stems from live poker games, where there are concerns that if two players are speaking in a language that nobody else understands, they could be colluding with each other by sharing their hole cards or cheating in some other way. The rule famously appears in the movie Rounders, where Ed Norton’s character chastises two Russians for speaking ‘Sputnik’ at the table – a term which nicely illustrates why I don’t like the rule.

Players who speak a so-called ‘foreign’ language at the tables are typically issued with a written warning for doing so, which might coincide with a temporary chat ban. Such players, who probably haven’t taken the time to read all of a site’s rules, are often completely perplexed by this course of action, and rightly so. Take a German player as an example. This player came to your German .de site after seeing a German advert on German TV. They downloaded the German software, reviewed their game using German hand histories, and may even have dealt with your German support team. But they’re not allowed to chat in German? Why not?

This type of action alienates players in markets where poker is growing the most (markets where English is not the first language) in order to satisfy paranoia in markets where online poker is dead or declining. The English-only rule doesn’t do anything to prevent serious collusion – when was the last time you caught a professional collusion ring who were sharing hole cards in the chat? It only helps to dispel the appearance of collusion – but what is more important, appearance or the facts?

Another example that I think deserves serious thought is the issue of game currency. Since the birth of online poker, we’ve been using the US Dollar for our cash games and tournaments. This made a lot of sense in 1998 when the only country that really mattered in online poker was the USA. It even made sense in 2006. But does it make sense in mid-2011, now that Black Friday has rewritten the rules for online poker operators, and no major site is accepting US players?

Once again, the theoretical German player has interacted with your company from Day 1 as if it were a local company, just as likely to be based in Berlin as in Gibraltar or Dublin. When that German player comes to deposit, chances are they can use their Euro credit card to do so, and they might even be able to keep their account balance in Euro too. But when they go to play in the games, all of a sudden they are required to change their money into US Dollars?

The German player has probably never been to the USA, has probably never held a dollar bill before, and has probably never looked at the conversion rates from US Dollars to Euro. Yet you’re forcing this player to make this leap – and for no good reason, since players from countries that actually use the US Dollar aren’t allowed to play anyway!

Of course, the currency issue isn’t that simple. Every good Poker Room Manager knows that the more games you spread, the more you run the risk of fragmenting the player base and actually decreasing game stability, along with the number of hands dealt and revenue generated. But isn’t it worth at least trying different approaches to this issue, instead of adopting the ‘if it isn’t broken, don’t fix it’ attitude?

The continuity of your message to players in regional markets is damaged when you tell them that they can’t do what is natural to them – like speaking their own language or playing in their own currency. Each time you put a player in such an unnatural position, there is a chance that they might leave to play elsewhere, or not to play at all. These rules and policies are in place simply because of the history of the marketplace, and because nobody has thought to rethink them.

It will be a shrewd poker operator that is the first to get these things right, and provide a continuous message to players regardless of which part of planet Earth those players are from, and what language they speak. Will it be your company?

This article was published in InsidePokerBusiness, Jul-Aug 2011.

Gold Farming

The online poker industry, and the poker-playing public, is at war with bots – that is, computer software that plays poker without human intervention. At first glance, this is a somewhat illogical position. After all, playing without human intervention is not necessarily cheating, because a poker bot plays by the same rules as everybody else. A typical bot doesn’t collude, abuse other players in the chat, or multi-account, but it does keep games running and generates revenue. What’s more, a typical bot is extremely predictable and should therefore be simple for a skilled player to beat. If you didn’t know much about poker, you might think that a bot would be exactly the kind of player that the public would like to play against and that poker businesses would want as a customer.

However, the vast majority of the poker playing public does not want to play against bots. This is partly due to an irrational fear of bots brought on by the success of computer programs at playing chess (IBM’s Deep Blue computer) and backgammon (Snowie), which has led players to believe that sophisticated poker bots are going to win their money by playing perfect, unexploitable poker. As a result every top poker site prohibits bots, not because they are against the rules of the game, but to protect their reputation.

But there is another, more philosophical reason not to allow bots. Some bots are designed by computer programmers as a sort of intellectual challenge – the same sort of motivation that drives programmers into hacking or virus creation. Others are used by people who either can’t resist the urge to cheat, or who are looking for the next ‘get rich quick’ scheme. But neither of these types of people is a poker lover, and no bot is a true participant in the game of poker. A bot does not contribute to the growth or popularisation of the game like a human player might. It doesn’t socialise with other players and create a fun environment like a human player might. A bot doesn’t engage in the game beyond simply taking action – it doesn’t enrich the lives of others or create joy. Every bot which breaks even or wins simply drains money and resources from the online poker community without giving anything back. That’s the real reason not to allow them.

In 2004, I was approached by a businessman who wanted to create an online poker ‘sweatshop’. He proposed that I would develop a simple strategy for beating the game, and he would then hire workers in India at very low cost to play the game using that strategy, with all of the profits going into the business. He didn’t see this as unethical because the players wouldn’t be colluding with each other, and no bots would be used which were against the Terms and Conditions of most sites. Indeed, what he was proposing was totally within the rules. I declined, and no doubt the businessman went on to find someone else to develop his strategy. This was my first encounter with a ‘gold farm’.

The term ‘gold farming’ derives from the popular online role playing game ‘World of Warcraft’, developed by Blizzard Entertainment. The game’s virtual currency, known as ‘gold’, is bought, sold, and traded for real money outside the game. As a result, a similar problem as in online poker arose, with bots designed to play automatically and earn gold which would then be exchanged for real money, and teams of workers in countries like China and India being paid to earn gold from the game. These gold farms could make money because of the extremely low cost of labour and the relatively high price that the in-game currency attracted in the real world.

In online poker, a gold farm consists of a group of workers paid to play online poker. Their accounts are funded by their leader, and the workers are paid a salary for the number of hours they put in, with profits going to the leader. Workers don’t need to be poker players, as they can simply follow a strategy from a chart, or from one of the many advisory programs available to assist players as they play. Workers might assemble in an office, or work from home.

In recent years, gold farming has attracted some mainstream attention. In 2008 and 2009, a notorious gold farm from China made a lot of money playing Seven Card Stud online. Although no cheating was ever proven, the fallout from the case resulted in a lot of negative publicity, a great deal of suspicion, and much resentment from players.

It’s abundantly clear then, that players don’t want to play against gold farms. What’s more, gold farms detract from the game in the exact same way as bots do, by draining money and resources from the community without contributing anything in return. For those reasons, I believe that gold farms should be prohibited.

I can understand the industry’s reluctance to do so, however. After all, it’s generally not a good idea to create a rule which you cannot effectively police or enforce, and detection of gold farms is potentially very difficult. Unlike bots, gold farms interact with the games in exactly the same way as a normal player, because there is a human at the controls. The difference between a human gold farmer and a human poker player is small and difficult to detect.

Automatically analysing the playing style of players and comparing them against known strategies, which is a technique used by online backgammon providers, could potentially identify those players who follow strategy charts, or use an identical strategy to other players - a potential indicator of a gold farm or a bot. However, this method’s reliability is questionable if used in isolation and expensive to implement.

Another alternative is to not spread games that can be played well by following a simple strategy chart. Two obvious examples of such games are short-stacked No Limit Hold’em cash games, and tournaments with very fast betting structures such as Hyper-Turbo Sit & Gos. By not offering such games, you make it harder for gold farms to develop a simple winning strategy.

Also worth considering is prohibiting the use of third-party tools which provide advice about what action to take in every situation. It’s one thing for a tool to tell you what the pot odds are, but it shouldn’t be acceptable for a tool to tell a player that they should ‘raise all-in’. Yet such tools exist and are allowed by some sites.

Lastly, we can make gold-farming more difficult by placing stricter rules on player-to-player transfers, which are often used to fund the accounts in gold farms, and on the sharing of accounts by multiple players.

These are just ideas. It is worth investigating how Blizzard and other developers of online role-playing games deal with the same problem, and of course the best solution will be one that the whole industry adopts together. It’s clear to me that gold farms are just as much of a threat to online poker as bots are, and are just as unwanted by the poker community. It will be a brave but virtuous business who takes a stand against them first.

This article was published in InsidePokerBusiness, Mar-Apr 2011.