Rakeback caught up with Winning Poker Network (WPN) CEO Phil Nagy just as he was taking his children to a theme park in Costa Rica where he lives.
Over the course of the interview, Phil explained what he was doing to make WPN and its flagship poker room Americas Cardroom into one of the world’s most popular online poker rooms.
But first, we had to talk to him about the last Million Dollar Sunday which ended up with a $225,000 overlay after play was disrupted by a vicious Distributed Denial of Service (DDoS) attack.
“As far as this last Sunday, it was a stinger and it sucked, I can’t lie, it was actually pretty sad for me, but the way I kind of looked at it is I’ve got 4 more in October. It wasn’t because we didn’t have the headcount it wasn’t because we didn’t have players online, it was because players were afraid to play with the [DDoS] attacks and the pause in tournament and everything.”
The event was interrupted by a DDoS attack, where hackers overwhelm internet bandwidth causing players to disconnect and then have difficulty getting back online. After a previous attack when the network attempted to put on the first million dollar guaranteed tournament offered to US players since Black Friday, WPN has upgraded its defenses.
Back to Phil.There is now a pause tournament feature which the organizers can bring into play. An event can be stopped for a short period to allow players who have disconnected to get back into the game.
“Coming into that Sunday, we were on fire compared to the period leading up to all the other ones. When the problems started, I said to my team, this is going to suck, but I’m going to show everyone that unlike last December where I had to cancel it, I got online, I got onto Twitch, I explained to everyone that we were fighting massive DDoS attacks and said this is what you’re going to experience - You’re going to see a few five minute pauses.”
“I sent messages to the tables, saying we’re going to do everything we can to control it, but it’s going to finish. I told my team we’re going to lose $300,000 or $400,000 today, but that should build players’ confidence that no matter what happens they aren't going to get screwed. When we couldn’t handle the DDoS attacks we refunded people, when we could, and it wasn’t unfair to people, then we let it run.”
Every Sunday in October Americas Cardroom is hosting another Million Dollar Sunday. The tournament comes with a $540 buy-in and a $1 million guarantee.
“In the month of October, we’re going to be the second biggest site in the world for multi-table tournaments, measured by tournament guarantees.”
“I’m like a salmon swimming upstream,” he explained, showing his indomitable optimism. “When I was doing this, I expected around $500,000 of overlay between the five different tournaments. I didn’t expect to lose half of it in the first one, but all our numbers say we should be close to covering all the other four.”
Rakeback asked Phil if he thought the overlay was a good way to spend marketing money.
“If you look at marketing avenues right now for the unregulated market. You can’t do ESPN, you can’t really buy billboards, can’t buy a lot of radio or internet stuff or anything else. You’ve basically got affiliates and your offering.”
“Look at the Freebuy Super Series. We dig pretty deep into our database to understand the numbers, and we have a good understanding of what the customer value is to the business and how to retain them, and basically, for us, what we have to do is attract players with an offer that is good enough that people will actually talk about it, and tell their friends about it and get out into the news.”
The Freebuy Super Series offered tournaments that were free to enter, but where rebuys and an add-on cost money. Each event came with a guaranteed prize pool, and 58 of the 60 events ran with an overlay. Phil is convinced the Super Series was still great value for the company.
“Well, when you take away the expense of ESPN, and take away the billboards and all of these advertising channels and wrap it into the cost of these events which become your advertising channel, it actually a lot less expensive.”
“I used to spend $150k a month on ESPN during the WSOP, It’s thanks to the people of New Jersey who took that away from us that we can’t use it. But you know what, we got more sign-ups from the Freebuy Super Series than we got in three months of commercials on ESPN. My net, net is plus $250k thank you to the guys in New Jersey.”
“It’s really, really important to the industry that we introduce new players. The reality is you have to introduce new players to the game, but there also has to be a co-existence.”
That guy who is sitting in front of his computer 10 hours a day five days a week earning a quarter of a big blind per 100 hands. The fact is he still has to pay the light bill, the internet bill and he still has to feed his kids. But without that guy you can’t get the big peaks, you can’t get the mass of players.”
“The fact is with every other casino vertical, every other casino vertical is easy because you don’t need that headcount. The greatest software in the world is worthless without people.”
“Example is Full Tilt. Full Tilt was absolutely rockstar when they had 60,000 people online, now even with PokerStars owning it and being to be able to transfer money from their PokerStars accounts, they are having to turn to the casino model so they can have these higher margin products to try not to be a big giant red figure for Amaya.”
Amaya owns both Full Tilt and PokerStars. Before Black Friday, Full Tilt’s software was considered to be among the best, if not the best in the business.
After his comments on the importance of attracting new players while still maintaining an attractive environment for high volume players, it was no surprise that Phil did not think the recreational player model adopted by many poker rooms was likely to be successful.
Rakeback asked him about the new Full Tilt Players Club which has been designed to provide random rewards to low volume players, and about the anonymous table model which is in use at Bovada, which also continues to accept US players.
On Full Tilt, Phil simply said, “I think it’s very utopic.”
“I don’t agree with the Bovada model, because I believe absolute power corrupts absolutely. That’s all I want to say about that.” With anonymous tables, he complained that “there’s zero transparency.”
“Poker is really, really hard and one of the reasons it’s hard is because the margins are so much different than every other casino vertical. It’s a matter of public perception, poker players are followers, where the big game is, is where everybody goes,” he said in explaining why high levels of player liquidity are so important.
“Whether you like me or not you have to come play my games. My theory on this is if I can’t get you to my site one time, then I’m never going to get you as a regular customer.”
In Part 2 Phil talks about Jackpot Sit & Gos, and how the regular sit & go will go the way of Limit Hold’em. He tells us to expect some big developments about the Cage, a hybrid tournament/cash game, and he explains why he is a Bitcoin fanboy.
By Joss Wood Rakeback.com Content Manager
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