Insight to Brand and Network revenue

 

By gopoker.com, February 14, 2010

 

The trend today is that operators with one or several successfully brands B2C is looking to enhance business and profits through B2B, and while many are facing greater challenges in building a B2B division and network, as operations model is licensed from software suppliers and part of an existing network, other brands are independent and hence operates on ownership and control of system and thereby holds a stronger position to explore business to business in order to acquire more play and go network.

 

Analysing brand and network revenue this article do however not intend to advice, evaluate or make any other representation as to preferred direction, as there are several and thereto crucial factors that needs to be encountered for on a case by case basis, it do however present a brief insight to potential operations revenue, on various player levels and rounds per hour versus average rake.

 

 

Operations

The main essence of online poker is to build a solid poker community in order to maintain as many players and tables running at any given time, making sure that the rake is taken continuously in order to support operations, ongoing business and build revenue, and this is what online poker is all about.

 

 

Average Rake $1

Analysing facts, average rake is based on a variety of tables spreads and pot sizes, and reaching an average rake of 1, poker rooms require a variety of tables and limits, and the below tables represents an example of the most commonly played table limits, and represents a standard spread in reaching an average rake of 1 per round.

 

Table Limit	Pot Spread	Avg. Pot	Min Rake	Max Rake	Avg. Rake
0.50/1	4-6	5	0.25	1	0.25
1/2	8-12	10	0.25	1	0.25
2/4	20-25	20	1	3	1
3/6	25-30	25	1	3	1
5/10	30-75	65	1	3	2
10/20	75-140	100	1	3	2
15/30	140-150	140	1	3	3
20/40	150-230	170	1	3	3

 

Naturally there are brands and network that don't reach an average rake of $1, one being that a higher focus on low stake tables reduces average rake, while also rakeback and network model as well as royalties having an overall impact onto average rake.

 

 

10 million rounds

Establishing an average rake of $1, revenue will be driven by the number of rounds played by the hour, i.e. number of rounds versus time versus rake are the denominators for brands and network revenue...   

 

Table Limit	Tables	%	Rake/round	Rounds	Poker rake
0.50/1	4	17	0.25	1 700 000	425 000
1/2	5	22.5	0.25	2 250 000	562 500
2/4	4	17	1	1 700 000	1 700 000
3/6	4	17	1	1 700 000	1 700 000
5/10	3	13	2	1 300 000	2 600 000
10/20	1	4.5	2	450 000	900 000
15/30	1	4.5	3	450 000	1 350 000
20/40	1	4.5	3	450 000	1 350 000
Total	23	100		10 000 000	10 587 500

 

Analysing the chart of 10 million rounds and a poker rake of $10 587 500, one require an estimated 27 000 rounds per 24 hours, equivalent to about 1100 rounds per hour, or 19 rounds per minute, based on a 360 day period. Reaching the estimated numbers one require about 200-400 players online playing at any given time, per the given table limits, and average rake. 

 

 

25 million rounds

While looking and analysing numbers lets target the second goal of operations, 25 million rounds during 360 days.

 

Table Limit	Tables	%	Rake/round	Rounds	Poker rake
0.50/1	12	15	0.25	3 750 000	937 500
1/2	16	21	0.25	5 250 000	1 312 500
2/4	10	15	1	3 750 000	3 750 000
3/6	8	15	1	3 750 000	3 750 000
5/10	12	15	2	3 750 000	7 500 000
10/20	8	8.5	2	2 125 000	4 250 000
15/30	4	4	3	1 000 000	3 000 000
20/40	6	6.5	3	1 625 000	4 875 000
Total	23	100		25 000 000	29 375 000

 

Analysing 25 million rounds and a poker rake of $29 375 000, one require an estimated 70 000 rounds per 24 hours, equivalent to about 2900 rounds per hour, or 48 rounds per minute, based on a 360 day period. Reaching the estimated numbers one require about 500-1000 players online playing at any given time, per the given table limits, and average rake.

 

 

50 million rounds

Increasing marketing targets to high levels let's take a look at the numbers on 50 million rounds.

 

Table Limit	Tables	%	Rake/round	Rounds	Poker rake
0.50/1	25	15	0.25	7 500 000	1 875 000
1/2	18	21	0.25	10 500 000	2 625 000
2/4	22	15	1	7 500 000	7 500 000
3/6	18	15	1	7 500 000	7 500 000
5/10	14	15	2	7 500 000	15 000 000
10/20	10	8.5	2	4 250 000	8 500 000
15/30	8	4	3	2 000 000	6 000 000
20/40	6	6.5	3	3 250 000	9 750 000
Total	23	100		50 000 000	58 750 000

 

Hence with 50 million rounds there is a potential poker rake of $58 750 000, which requires an estimated 140 000 rounds per 24 hours, equivalent to about 5800 rounds per hour, or 96 rounds per minute, based on a 360 day period. Reaching the estimated numbers one require about 1000-2000 players online playing at any given time, per the given table limits, and average rake.

 

 

Operational Target

Whether a reality or not there is today highly successful brands online and while corporate revenue differs greatly from the numbers presented, the numbers are from analysing actual operational online brand(s), however exclusive of operational costs; bandwidth, hardware, software development, management, staff, support, bonuses, rakeback, promotions and more. Facts remain however, operational poker can be highly successful and one need to go no further than looking at the numbers of some of today's public gaming companies.

 

Operational rake over a three year period, accordingly to the above charts, holds the potential to reach close to a $100 million ($98 712 500).

 

Year	1	2	3
Rounds/Year	10 million	25 million	50 million
Rake/Year	10 587 500	29 375 000	58 750 000
Rounds/minute	19	48	96

  

Understanding target, one need to understand players, what is required and what can be expected, hence let's take a look at player patterns versus poker time.

 

 

Player Targets

With operational target set on a high level more interesting is analysing player levels required by the hour and what potential revenues brands and network can rake in.

 

 

800 players

 

	0.50/1	1/2	2/4	3/6	5/10	High limits	Total
No. tables	1	1	1	1	1	2	7
Players/table	8	5	6	6	8	8	49
Time/player	2h	2h	1h	2h	1h	2h	10h/1h
Players/hour	8	5	6	6	8	16	49
Players/24h	96	60	144	72	192	192	756
Rounds/hour *	40	40	40	40	40	80	360
Rounds/minute	0.66	0.66	0.66	0.66	0.66	1.33	4.6
Rounds/24h	960	960	960	960	960	1920	6 720
Rounds/360d							2 419 200
Rake/24h	240	240	960	960	960	1920	5280
Avg. rake	0.25	0.25	1	1	1	1

 

Attracting 800 (756) players per 24 hours, or 49 players by the hour, holds the potential to run seven active tables continuously and rake in about $5 000 (5 280) per 24 hours.

 

 

1100 players

 

	0.50/1	1/2	2/4	3/6	5/10	High limits	Total
No. tables	2	1	2	2	1	2	10
Players/table	4	5	6	4	4	4	43
Time/player	1h	1h	1h	1h	1h	1h	6h/1h
Players/hour	8	5	12	8	4	8	43
Players/24h	192	120	288	192	96	192	1080
Rounds/hour *	90	45	90	90	45	90	450
Rounds/minute	1.5	0.75	1.5	1.5	0.75	1.5	7.5
Rounds/24h	2160	1080	2160	2160	1080	2160	10 800
Rounds/360d							3 888 000
Rake/24h	540	270	2160	2160	6480	6480	13 770
Avg. rake	0.25	0.25	1	1	2	3

 

Attracting 1100 (1080) players per 24 hours, or 45 players by the hour, holds the potential to run ten active tables continuously and rake in about $14 000 (13 770) per 24 hours.

 

 

2600 players

 

	0.50/1	1/2	2/4	3/6	5/10	High limits	Total
No. tables	3	4	3	3	3	4	20
Players/table	4	5	6	5	5	7	108
Time/player	1h	1h	1h	1h	1h	1h	6h/1h
Players/hour	12	20	18	15	15	28	108
Players/24h	288	480	432	360	360	672	2592
Rounds/hour *	135	180	135	135	135	180	900
Rounds/minute	2.25	3	2.25	2.25	2.25	3	15
Rounds/24h	3240	4320	3240	3240	3240	4320	21 600
Rounds/360d							7 776 000
Rake/24h	810	1080	3240	3240	6480	12960	27 810
Avg. rake	0.25	0.25	1	1	2	3

 

Attracting 2600 (2592) players per 24 hours, or 108 players by the hour, holds the potential to run twenty active tables continuously and rake in about $28 000 (27 810) per 24 hours.

 

 

Spread

The business of poker is hence managed through rake and where key factors are number of rounds per hour versus number of concurrent players. However the spread in revenue from one brand to another is in great dependent on table limits and whether the majority of tables are low- medium- or high stake-tables. Healthy poker operations, spread between tables and players should reach an average rake of $1, exclusive of operations cost.