Not neutral
‘Neutral’ is the most expensive word in the gaming industry.
Yesterday I saw a tweet (since deleted) which argued that prediction
markets are neutral because, in their ideal world, trades would have
fairly uniform aggregate outcomes such that no one really won or
lost, and as players traded the platform would gradually consume
their account balances via fees. In a narrow technical sense, that’s
accurate. The message was consistent with PMs trying to position
themselves as somewhat more virtuous than their traditional
counterparts. But on closer inspection, it reveals an important
subtlety in how parts of the gaming industry actually work - one the
PMs prefer not to be explicit about.
This type of ‘agnostic to the outcome’ positioning is not unique to
PMs - it’s also true for a poker site (which I obviously know
intimately). In poker, if you could engineer a situation with parity
of skill, where everyone won a bit and lost a bit, never cashed out,
and just slowly eroded their bankrolls into the rake, that would
indeed be the ideal scenario for the operator. In fact, poker sites
over recent years took explicit steps to try and do that in the name
of ‘ecosystem health’, albeit to no externally obvious benefit.
Of course, that scenario is entirely fantastical. You never get
parity of ability. People get on hot runs and bad ones. They cash out
after big wins, and they stop playing after big losses. Crucially,
such a scenario requires all participants to be indifferent to the
rake or fees they’re paying, which absolutely isn’t the case for a
core cohort of customers in any actual gaming product I’ve ever been
near.
The base of the pyramid
One thing that’s true about poker sites, and almost certainly true
about PMs, is that a large portion of revenues comes from a
relatively small percentage of the customer base - the whales.
That’s also true for games in general and for sports books, but the
difference for a poker site or a PM is that their presence is a
necessary condition for the ecosystem to function. On a poker site,
that’s generally the people who play the most. They do tend to get
the biggest rewards to keep playing - but in aggregate they still
contribute more than anyone else, and I’ve not yet seen any data
that suggests the situation is different for a PM. The ultimate
viability of one of these sites rests on liquidity, which is driven
by a small percentage of customers, the majority of whom require a
specific version of the product/service.
So while it is technically true to say that a poker site or a PM is
agnostic to the outcome of any particular game or trade, they are
not at all agnostic about the experience of their most important
customers. To be so would be to be agnostic about the success of the
business.
The person you sit beside
How to square the circle of catering to the ecosystem while also
relying on a specific cohort within it was one of the fundamental
problems poker had as well, and I think PMs are already facing it,
albeit at a different stage of their ecosystem lifecycle. Inside
PokerStars at the end of the boom period (which was teeming with
serious poker people, many of whom drove the product design) I used
to describe it as ‘building for the person you actually sit beside
rather than the one you want to sit beside’. The optimal product for
your most valuable customers is not the product that’s optimal for
the players they want to play/trade against, and the operator always
ends up quietly choosing - which means they’re not really neutral at
all.
One key aspect of that most important cohort is that they are mostly
(but not universally) price and outcome sensitive - by which I mean
that if they can’t make winning trades or be net winners at the
poker tables, they will take their liquidity somewhere else. Part of
that whole calculation is who they’re playing or trading against,
how much the rake/fees are, product features etc. Their behaviour
feeds into the marketing approach, the product design, the CRM -
basically everything.
To build is to choose
So yes, you can claim that PMs are neutral, but they need to feed
the monster that feeds them, and everything is downstream of that
tenet. When you design a PM product with an API, you are not neutral
(especially if it gives privileged access/data). When you allow
players to massively multi-table a poker site, or to use certain
third-party tools to profile opponents, you are not neutral. When
your fee or rake schedule varies between groups, you are not
neutral.
Recently I was clearing out some files and stumbled across an old
org chart from Scheinberg-era PokerStars. What is obvious from
looking at it now, and remembering the big strategy/planning
meetings about marketing etc., was just how ruthlessly efficient and
effective it was at finding, opening and developing new markets.
Everything was sequenced - local partnerships, regulatory outreach,
media, marketing and product. It was a system designed to keep the
player/money flow going in the right direction, and it was
exceptional at it. But efficiently opening new markets is running to
stand still - there are only so many of them, and ultimately you
have to find a way to achieve long-term balance in the product.
PokerStars, and the poker sites in general, never found that
balance. Indeed, you could argue their business model made it
impossible. In the end, this was one of the underlying forces that
(somewhat) fatally damaged online poker. PMs might be stuck on the
same railway tracks.
Philip Atkinson, CEO, May 2026