SHORTCHANGES

Ace Reporter

I think I have been shortchanged.
I recently won a package online for the Paddy Power Irish Winter Festival in Dublin. The package, valued at $4,500, was played on the iPoker network through Green Joker Poker, whose banking and customer services are provided by Bluesqpoker.com. I have won a number of tournament packages on this site before, mostly for entries to GUKPT events, and have never had a problem with these. The GUKPT packages were normally valued at $2,500 and covered the tournament entry and the balance was credited to my account to cover expenses. The tournament entry was paid using the exchange rate on the day of the online satellite, which I believe is standard practice at Bluesq for GUKPT events.
On the other hand, the IWF package included four nights’ hotel accommodation as well as expenses. As I had made my own hotel arrangements, I informed the poker site of this fact. Subsequently my account was credited with the sum of $1,050 for expenses and $620 for the hotel. At the same time as this was going on, Paddy Power were running satellites on their own poker site for a seat only for the IWF. This seat was valued at $2,222. If you add up the seat, 2,222 + expenses 1,050 + hotel 620 the total comes to $3,892, some $608 short of the $4,500 advertised value of the package. I emailed my sums to Bluesq and awaited their explanation. I was told that the iPoker network had purchased the seats in advance at a different exchange rate, costing them $2,600. I was also told by Bluesq that, “due to a human error in the communication between us and iPoker” my hotel refund should have been $725 rather than the £620 they had given me. They also informed me that they had deducted $100 from my winnings for a qualifiers welcome party, which they had failed to invite me too. Having refunded the hotel shortfall and the welcome party fee, this still left a $25 difference. I was informed that this related to “a deduction as a network “ buffer” for European packages currency rate variance at the point of transaction.” whatever that means. Considering that I am the one who feel he has suffered due to the “currency rate variance” they have a hell of a cheek in deducting $25 from my package to cover themselves! At the end of the day, this is not even their own money that they are dealing with. It is all players’ money. The site/network provided a platform for the players on the night of the satellite, for which they charge a fee to each player. Never mind the numbers, the whole thing was handled in a totally sloppy manner, leaving a bad taste in the mouth. This is not just a personal matter as there were quite a number of online qualifiers for this event on various sites across the network. I would advise all of them to check how much they actually got for their so called $4,500 package.
For my own information and on behalf of any readers who may also be affected or concerned with this matter, I posed a number of questions to the site/network. The questions and any answers I got were as follows:-
1) How many other players were affected by this issue? – No reply.
2) If the exchange rate had gone the other way and the network had bought seats in advance for, say, $2,200, would the network pass the savings onto the satellite winners?
3) If not, who benefits from any exchange rate surplus?
4) How does the network work out how many seats/hotel rooms to purchase in advance?
5) If they purchase too many seats, do they get a refund on the surplus? If not, why purchase them in advance anyway?
6)If they purchase too few, do they buy any additional seats at a new exchange rate or the original rate?
7) Do they actually pay for hotel rooms in advance or do they merely book the same number of rooms as the number of seats they purchase?
As regards the purchase of seats, they gave no details of the mechanics save to say that “iPoker pay the rate on the day of purchase.” As regards the hotel rooms they said “iPoker do not disclose their dealings with hotels.” I would doubt very much that they would pay for hotel rooms in advance and would probably have benefited from the rise in the value of the dollar against the Euro from the time the hotel rate was agreed to the time of the event itself.
They did say that “in both instances iPoker do not make a profit or loss as they pay the correct rate on the day of purchase – there is no currency surplus as you suggest. In fact, they would be exposed to currency fluctuations and potentially suffer losses if they bought packages at the end of the promotion – if the value of the $USD went down against the event currency.”
They continued “The only apparent way to resolve the situation you faced would be to reconcile the packages on a weekly basis; however iPoker are currently unable to do this as there is excessive administration and paperwork involved in transferring such amounts of money to external providers.” Not sure if this a valid excuse as there are only a handful of qualifiers each Sunday night and it should be no big deal, in the age of instant communications and cash transfers, to deal with the admin. weekly.
They concluded by telling me “they will consider splitting the reconciliation twice during a single promotion.” They are also “currently developing “multi currency” functionality for 2009 which means players will actually play in the currency of different events – resolving this issue.” Well thank goodness for that and the fact that they do admit that there is an issue.
While they are developing their new system, I think I will play for tournament seats directly on the sponsors own sites rather than through a third party who can blind me with currency fluctuation excuses.
I would advise anyone who wins tournament packages online to check the figures carefully to make sure they are getting what they are supposed to.

RoundTower

you're probably right. Don't expect any answers from iPoker, but the Green Joker owners who post here/own this site will probably sort you out in return for some silence and goodwill.

Mellor

Currency exchange rates vary all the time and this kind of thing happens alot, it also goes up aswel as down I'm led to believe.

Ace Reporter wrote: »

While they are developing their new system, I think I will play for tournament seats directly on the sponsors own sites rather than through a third party who can blind me with currency fluctuation excuses.

Also, as for playing on a sponsors own site. The IWF was sponsored by paddypower, which is also on ipoker. So the package, the value, and even the weekly grand final are the same. So it would of made no difference. Most of the people you out lasted in the final were likely on PPP.

Ace Reporter

Mellor wrote: »

Currency exchange rates vary all the time and this kind of thing happens alot, it also goes up aswel as down I'm led to believe.


Also, as for playing on a sponsors own site. The IWF was sponsored by paddypower, which is also on ipoker. So the package, the value, and even the weekly grand final are the same. So it would of made no difference. Most of the people you out lasted in the final were likely on PPP.

Not sure if this would have been the case. In the same week that I won my package (seat valued at $2,600) Paddy Power were running seat only satellites (seat valued at $2,222) Don't see how PP could have justified the higher price considering they were running the tournament themselves.

bohsman

If this was a newly opened live casino people would be on a witch hunt by now.

Mellor

Ace Reporter wrote: »

Not sure if this would have been the case. In the same week that I won my package (seat valued at $2,600) Paddy Power were running seat only satellites (seat valued at $2,222) Don't see how PP could have justified the higher price considering they were running the tournament themselves.

It was the case. The sat you won wasn'y a GJP or Bluesquare only sat. It was ipoker wide. Which means PPP were running the same. If you made the final on GJP, and I played it on PPP. We would be playing the same tourney, same tables, same package.
The seat only sats were started later, and therefore a different exchange rate was used.

Ace Reporter

Mellor wrote: »

It was the case. The sat you won wasn'y a GJP or Bluesquare only sat. It was ipoker wide. Which means PPP were running the same. If you made the final on GJP, and I played it on PPP. We would be playing the same tourney, same tables, same package.
The seat only sats were started later, and therefore a different exchange rate was used.

I totally understand the point you are making about the network wide satellites. The point that I am trying to make is that the seat only satellites on PP were already running at the time I won my package. Winning a seat in the same week for the same tournament had two different values, $2,600 in my package, $2,222 on Paddy Power.

AdMMM

Poker Stars had to recently explain a very similar situation recently.

Hello everyone,

We have been reviewing this issue within PokerStars, and after considerable discussion and analysis, I'm now able to share the following information with you. We believe our players are entitled to understand how these things work, how they affect PokerStars, our players, and the events we host. Thank you to those who have participated in this discussion so far.

First, it's important that we explain the process we have used for setting prices on live events. (A document detailing the process, and our policies regarding said process, is being developed and will be added to the PokerStars.com website as soon as possible. More on this later.)

Before satellites are deployed to a live event, we define the overall package price by converting the price of the event and hotel into U.S. Dollars. The conversion rate is based on a forecast (which we receive from our bank) of the rate at the time the tournament is to be played, to which a small margin is added to cover the costs of repeated conversions (from player to PokerStars to event venue). At no time is the margin or forecasted rate designed to turn a profit, from either the buy-in or the hotel costs.

With regard to hotel prices, when we add the value of the hotel stay into a package, we add the price which we pay to the hotel. We get the best price we can, getting a variety of rooms and in rare instances across more than one hotel. We do sometimes receive a number of free rooms for PokerStars staff which is managing the event (though not nearly enough free rooms to accommodate all staff members). While a price which can be found on a travel site a week before the event may vary from the price we have included as part of an event package, we do not mark up the price of the rooms in any way. We secure the rooms for our players and pass the costs through to them – without increase – via the package price.

As the weeks pass and exchange rates change, there are situations when PokerStars takes the worst of it and times when the players take the worst of it. The latter situation has been shown clearly in the last few months as market fluctuations have hurt the value of our players' satellite winnings, but to label it as a built-in “hidden profit” is incorrect. PokerStars has taken no action to intentionally cause this to happen.

Some examples of the effects of currency rate fluctuations:

For EPT4-Dublin, the package price was €9,170. On the day that we deployed satellites (24 August 2007), this worked out to a price in USD of $12,431.77, and the package price was set on PokerStars at $12,350. By the time the tournament was played, the ‘correct’ price (by the exchange rate on Day 1) was $13,217.64; by these calculations, PokerStars took a net loss per player of $867.64.

For EPT4-San Remo, the package price was €6,260. On the day that we deployed satellites (27 January 2008), this worked out to a price in USD of $9,193.44, and the package price was set on PokerStars at $9,125. By the time the tournament was played, the ‘correct’ price (by the exchange rate on Day 1) was $9,891.43; by these calculations, PokerStars took a net loss per player of $766.43.

For EPT4-Monte Carlo, the package price was €12,615. On the day that we deployed satellites (9 October 2007), this worked out to a price in USD of $17,794.72, and the package price was set on PokerStars at $17,750. By the time the tournament was played, the ‘correct’ price (by the exchange rate on Day 1) was $19,924.13; by these calculations, PokerStars took a net loss per player of $2,174.13.

Note that the above examples were during a period when euro was climbing but the market was not as crazy as it is now. The current volatility in the markets, particularly in currency exchange, has made setting an appropriate rate extremely difficult and in some cases resulted in situations where our players are taking the worst of it:

For EPT5-Barcelona, the package price was €9,932.30. On the day that we set the price (23 June 2008), this worked out to a price in USD of $15,506.31, and the package price was set on PokerStars at $15,700. By the time the tournament was played, the ‘correct’ price (by the exchange rate on Day 1) was $14,015.47, as the Euro tumbled from an exchange rate of 1.5612 to 1.4111 in the interval. By these calculations, each player’s package was worth $1,490.84 less than when they qualified.

For APPT2-Seoul, the package price was 4,196,000 KRW (Korean Won). On the day that we set the price (8 July 2008), this worked out to a package price of $4,034.45 and the price was set on PokerStars at $4,020. By the time the tournament was played on 26 September 2008, the value of the KRW had changed to the point that the value of the package in US Dollars was now $3,627.44, resulting in a net difference of $392.56.

(rates above from www.oanda.com – rates vary slightly depending on the site used to search for historical rates)

The above examples illustrate that the markets always fluctuate, and that sometimes the fluctuations greatly benefit the players, and sometimes they don’t benefit the players at all. For every event we host, there is also, of course, a category of costs which PokerStars has never passed onto our players, the costs beyond running the tournament (dealers, tournament director, tables, etc.. which are covered by the tournament fees). Each event requires a significant amount of funding to make happen, from getting the venue and the staff to manage the event, to the party we host for many of the events, and much more. The entry fees for these events do not cover these additional costs.

In addition to these costs, nearly every series of live event satellites on PokerStars suffers a significant amount of overlay in the online qualifiers, value added to the satellites when guarantees are missed. Also, we host freeroll and VIP satellites which add value for our players. For APPT1-Manila, a relatively small and inexpensive event (by live event standards), $82,666 in value was added. An event such as the World Series of Poker or PokerStars Caribbean Adventure involves added money in the satellite prize pools that reaches well into six figures in total. For some events, the added value is more direct: PokerStars added £250,000 to the prize pool of EPT5-London. APPT2-San Jose, with a guaranteed prize pool of $1M USD, had $253,000 added to the prize pool.

The fact is that sending players to live events is expensive, but it is an expense that we consider to be well worth it. PokerStars’ position with respect to live events is that each one is a branding exercise, not a profit center. We grow our business by increasing our presence in the world, and the live events that we host on five continents accomplish this in a way that we feel is effective, despite the up-front costs that tend to make the accountants cringe a bit.

All of that said, we do recognize that the system we use should be improved for greater transparency. Going forward, we are changing how we handle live event packages, and this will be done in two stages.

For stage 1, rather than taking a forecasted rate for the price on the day of the event, we will use the exchange rate on the day as close as possible to the day we deploy the first satellites, plus a small margin (2.5%) to cover the costs of exchanging the funds back and forth from player to PokerStars to the venue. We want to be fully transparent, and this process will be detailed on the web page mentioned above, which is being developed and will soon be published to our website. We will of course continue to add value to the live events we host, while continuing to hope, along with our players, that the world exchange markets stabilize a bit.

We have now used this process to set a package rate for EPT5-Deauville (satellites will be deployed shortly). The Deauville package includes the buy-in (€5300), a hotel stay (€1290 – €215 per night for 6 nights), and $1,000 in spending money for each qualifier. From these figures, we used an exchange rate of 1.3025 (1.2731 + 2.5%) to reach a total of $9,583.475 which is rounded to $9,580.00, the final cost of the Deauville package which is being offered on PokerStars.

For stage 2, we will deploy EPT satellites with buy-ins and fees in Euros. Conversion from dollars (when players have dollars in their accounts) will take place when players register to the satellites; that way, currency fluctuations will be minimized. We plan to have this software feature in place in time for EPT Season 6.

Thank you for taking the time to read this post. I look forward to any feedback you may have, and will answer any further questions you may have to the best of my ability.

All the best,

Bryan S.
PokerStars Poker Room Management Team

Ace Reporter

At least Stars and the ipoker network have now admitted that there is a problem. The sooner they bring in the changes they talk about, the better for everyone. I just wanted to bring the matter to the attention of any other players who may have been affected by the current situation.

Goodluck2me

what goes around comes around imo mick...