PokerStars cancels rake increases: Full announcement

    • JoshLogan
      Joined: 24.07.2013 Posts: 1,648

      Author: PokerStars Steve, Source: 2+2

      In Brief:

      • All rake increases announced in October, except for Spin & Go changes, are cancelled effective immediately.
      • VPP multipliers will be reduced within the next few months for players in several additional countries where VAT and/or Gaming Duty are payable. These players will be informed directly in the coming days.
      • At some point in the future, we may deploy rake surcharges for countries that charge gaming duty or VAT. We will not do so before July 2015 at the earliest, and we will maintain our policy of passing on no more than half the tax to players and absorbing the rest ourselves.
      • Other than this, we will not implement rake increases in 2015.
      • The above apply to and shared liquidity, not for our segregated sites in Italy, Spain, or France.

      Rake change rollback

      We announced several rake changes on October 29th, 2014. The changes to Spin & Go rake will remain as implemented on November 3rd, 2014. All other rake changes announced in October, including those not yet implemented, are cancelled. As many of you have noticed, the rake rollback has already been fully deployed.

      We will not implement any additional increased rake in 2015 other than possibly in jurisdictions where we experience gaming duty or VAT as described below.

      VPP multipliers for taxed countries

      Within a few months we will reduce the VPP multipliers for some countries that are subject to gaming duty or VAT but that do not have their own software clients. We will deploy the change as soon as we are technically able, likely within the next two months.

      These changes will be enacted consistent with our previously communicated policy of sharing up to 50% of taxation with players. VPP multiplier reductions have already been implemented previously in other taxed markets including Denmark and Belgium.

      Adjusting rake and rewards due to taxation

      For our segregated markets of Spain, Italy, and France we use varied combinations of higher rake and lower rewards as we aim to pass on half of the tax cost to players. For shared liquidity we have thus far only adjusted for tax increases by lowering rewards. The primary reason is the technical challenge in charging different rake or fees for different participants in the same game. As a result, to date we have passed on substantially less than half of the tax.

      Reducing rewards by 10%, for example, does not cover half of a 20% tax. Tax is generally calculated based on rake/fees generated, not rewards. Consider a case where a player pays $10 in rake and earns $3 in rewards. If we are taxed 20% of revenue, that is $2. If we pass half on to players, that is $1. In order to reduce rewards by $1 out of $3, we would have to reduce rewards by 33%, all to pass on half of a 20% tax. These numbers are just examples to make a point, not figures from any particular market.

      More and more countries are introducing taxation, increasing the impact on our business. As a result, we plan to develop the ability to charge different rake/fees for different players within shared liquidity.

      Rake increases will be paired with the existing VIP Reward reductions, so significantly less than half of the tax will be passed on through rake increases. As an example, a player in a country with 20% tax would expect a rake surcharge of significantly less than 10%.

      We may not implement such charges this year, but if we do it will be in the second half of the year.
  • 8 replies
    • Ramble
      Joined: 17.11.2008 Posts: 1,460
      :f_drink: This is GREAT NEWS! :f_drink:
    • rupucis2
      Joined: 27.10.2008 Posts: 306
      Taxes.. hmm.. :why:
    • redskwerl
      Joined: 03.03.2008 Posts: 3,812
      thank you! great decision. for both pokerstars and us, the players.
      i wonder what they have in store for us for next year, though.
    • meandi289
      Joined: 22.08.2009 Posts: 213
      Hoping my country is not among taxed countries
    • Tomaloc
      Joined: 17.01.2011 Posts: 7,014
    • Grifer25
      Joined: 14.02.2010 Posts: 663
      All Eu country's will get FPP reduction.. already started in FTP

      E-mail form FTP

      We just wanted to let you know that due to a change in EU tax duties, the rate at which players based in Lithuania accumulate Full Tilt Points will change. From Tuesday, January 6th, players will earn 8 Full Tilt Points per $1 raked.
    • fred7790
      Joined: 22.04.2013 Posts: 252
      "Spin & Go" is unaffected by this rake rollback, with the planned 5% increase on player tax in exchange for a 3000x jackpot remaining in place.

      What do they mean by 'in exchange for'? Is the amount of money that contributes to 3000x included in rake (doesn't make sense for me) or is this just bullshit?
    • rupucis2
      Joined: 27.10.2008 Posts: 306
      Grifter25 same tax in Latvia! This tax is stupid and unfair! Its a fkn money scheme!

      Stars and FTP is connected, I don't want to see the same thing happening on stars, but its coming, I feel that.

      Poker rooms are earning profits on players raking money... on top of that poker rooms want to make those same players pay taxes.. in addition to this nonsense they tell that they are the good guys and sadly there are players who think that they are. POKER PLAYERS! DONT BE FOOLS!!

      This rake reduction is short term benefit for you. Remember, once already we had this, then they took it away, and now they gave it back. Its like a game with donkey and a carrot. Its not happening just of good will, its a poor PR and its a greedy business (close to monopolized), just wait for taxes to come!

      They say that they have to pay VAT to players country.. So what!?!? Its your tax, why players should pay it for you? You gain profits from us, so pay it from those profits.