Four $1 Million Freerolls Planned for 2016
We are happy to announce plans to hold four $1 million freeroll tournaments in 2016 on PokerStars. These tournaments will surely create buzz and generate excitement among players at all skill and experience levels and the injection of $4 million into the economy will help many players' bankrolls. These tournaments will be on top of an already exciting - though not-yet-announced - series of promotions, events and new products that are planned for 2016.
We're doing everything we can to make 2016 an exciting year for poker, but recognize that 2015 has been tough for many of our players. This year has been difficult for our depositing customers who have seen a reduction in their purchasing power of close to 20% due to the strengthening of the US dollar, the primary currency of poker gameplay, vs their local currencies, most notably the Euro and other European currencies. This has reduced the value of their deposits meaning they are unable to play as long as before with the same amount of money, exacerbating issues of retention of new and casual players we have already seen over the past few years due to an increasing imbalance in the ecosystem. While we cannot influence where currency exchange rates will go, we can make changes that we believe will improve retention of such players by lengthening the time they will be able to play, allowing them to have more fun at poker and hopefully becoming a lifetime player.
We have been taking steps - across the whole business - to address these changes. The recent three-day boycott by some players that disagree with our announced VIP changes did not have a significant impact on PokerStars, as traffic actually spiked through the period as a result of the start of our long-planned holiday promotion.
Of course that doesn't mean it went unnoticed by us. We care very deeply about what players say and what they expect of us. And we strive to live up to their expectations.
Some of our players feel we have not met their expectations in the recently announced changes to the PokerStars VIP program. Indeed, some players who support the VIP changes feel we should have done a better job communicating the changes. We first announced that there would be significant changes to the 2016 VIP program in October 2014, following a comprehensive review we had undertaken earlier that year, and repeated this several times throughout 2015, including telling players that details would be provided in October. In fact, we had considered making significant VIP changes to take effect in January 2015, but our new ownership at Amaya chose to delay the changes for another year.
In hindsight, we could have communicated to players more often that significant changes were coming in 2016. We could have been more explicit that these changes would be significant and would take effect in 2016. And we could have noted this on our VIP web pages that gave details of the program. There was no intention to deceive and certainly not to profit from this, as an increase in the number of Supernova Elites, who are on average net withdrawing players, does not provide a financial benefit to us. It was simply a function of a long internal process and an honest belief that we had given players sufficient notice.
We sincerely apologise to players who did not expect cuts as significant in 2016 as we announced on November 1st and recognize that some players may have chosen not to participate in the rewards program in 2015 had they known. Although we did not publicize it at the time, we did recognize that players might not be expecting as severe a decrease in awards, so we provided a higher level of reward in 2016 than originally planned and delayed implementing the full decrease in rewards until 2017. This was explicitly in recognition that players were grinding in 2015 in order to reap the maximum benefit for 2016.
We believe that these freerolls are further affirmation of our commitment to bring more excitement and recreational players to PokerStars, which is good for ALL players.
Most importantly, these changes are a critical component of our broad-based initiative to improve our online poker ecosystem by attracting more new players, improving the environment for recreational players and instituting loyalty programs that serve the majority of players.
A tremendous amount of analysis goes into making these decisions by PokerStars. Our poker room management team is staffed with many former poker pros. And we have examined all possible scenarios. We are making these changes for the long term health of the poker ecosystem and to put in place a system that is sustainable.
We will not alter those plans. The current VIP program is no longer fit for its purpose. When combined with the increasing skill gap in the online poker market, the result is an increasingly poor experience for recreational and new players.
Changes are needed and we are making them. The funds that previously went to these rewards will be placed in more and bigger online promotions, more consumer marketing campaigns to attract new players and research and development of innovative new products and features. We have mass consumer marketing campaigns featuring Cristiano Ronaldo and Neymar Jr; we're launching innovative new poker variants that take advantage of mobile platforms, social gaming and the popularity of other card-based strategy games and e-Sports; and levelling the playing field for recreational and new players by restricting the use of third party software and data mining that give an unfair edge to professionals.
As we have in the past, we will continue to make changes to ensure our ecosystem is healthy and vibrant. We know and understand that players won't always agree with these changes. We'll do our best to communicate them early and with as much transparency and frequency as possible.
In that spirit of transparency, we can tell you that we did see effects from the recent boycott that give us even greater confidence that our strategy is on the right track to improve the health of the ecosystem. During the three-day boycott we recorded the healthiest consecutive three-day ecosystem results of the year with steady net gaming revenue, even though our net-depositing players lost at a much lower rate than they have all year. As we have seen with Spin & Go's, which have higher retention levels than cash games due to the increased winning experiences provided to all players, we believe this decreased loss rate will result in those players' deposits lasting longer and retention rates improving, resulting in more deposits and more money in the system because players are enjoying their time at the tables more. This is the right foundation for us to build upon.
Our commitment to poker is as strong as ever. We believe that our actions will demonstrate this in the months and years ahead.
Eric Hollreiser is Vice President of Corporate Communications for Amaya Inc. and PokerStars.