Zero Rake Poker Business plan

[Dennisa]

[ QUOTE ]
Tuff,

It sounds like you thought you found a loophole in which would allow you to start a site. You didn't, but let's say you did.

How would you pay for the six-figures in fees associated with accepting all these players' deposits via visa/mc etc. each year?

Since you said "well advertised" how will you pay the millions each year for that?

What about development and licensing costs of the client software?

24 hour support staff paid in American wages?

Where does all this money come from?

[/ QUOTE ]

Not to mention, one of the largest costs for an Internet poker room is fraudulent credit card / Epassport, etc charges.

Tuff Fish, how is your room going to fund paying out staff to monitor deposit issues? How is your room going to fund staff for bot detection / collusion issues?

[Benjamin]

[ QUOTE ]
[ QUOTE ]
Charge a membership fee: $25 annually

[/ QUOTE ]
LOL average site gets that by an hour. Flat fee isn't an option. No-one would pay it.

[/ QUOTE ]

You left out most of my description of how to raise funds: [ QUOTE ]
Set up the card room as a non-profit. Hire an experienced and successful non-profit fundraiser. I think money would rain down into such a non-profit from all the wealthy people in the US who love poker.

Charge a membership fee: $25 annually, with prizes and levels and stuff if you give more, like all non-profits. I.e. 'World Champion' level giving of $50,000 or more gets you an entry to the WSOP and all the prizes from lower levels.


[/ QUOTE ]

You don't think rich poker players like Gates and Soros would donate significant funds to such a non-profit? I personally support about 10 different non-profits with annual donations, and I'd be more than happy to add another poker oriented one if it's goal was to bring a no-rake 'homegame' site online.

[Tuff_Fish]

[ QUOTE ]
[ QUOTE ]
Tuff,

It sounds like you thought you found a loophole in which would allow you to start a site. You didn't, but let's say you did.

How would you pay for the six-figures in fees associated with accepting all these players' deposits via visa/mc etc. each year?

Since you said "well advertised" how will you pay the millions each year for that?

What about development and licensing costs of the client software?

24 hour support staff paid in American wages?

Where does all this money come from?

[/ QUOTE ]

Not to mention, one of the largest costs for an Internet poker room is fraudulent credit card / Epassport, etc charges.

Tuff Fish, how is your room going to fund paying out staff to monitor deposit issues? How is your room going to fund staff for bot detection / collusion issues?

[/ QUOTE ]

Good questions all. If it were easy, a caveman would be doing it.

Tuff

BTW, thanks to Dave pointing me over to the software forum, I now have another evil scheme brewing in my mind. [img]/images/graemlins/shocked.gif[/img]

[Grasshopp3r]

Here are some ideas on how to support the site. I am under the impression that the actual operating costs are pretty low for a poker system. Prove me wrong?

1. Donations. You have a "tip the dealer" or some sort of setting that allows the player to throw a buck or some set % back for ongoing support. At every B&M that I know, the players tip the dealers voluntarily.

2. Begging. Have a screen post a voluntary collection request when you log on and/or off. Display the # of hands, time and $ won so that the players feel guilty.

3. Funding. How do you get $ easily in and out of the site? A widely available payment system such as Visa/Mastercard is preferred as they are in most wallets. The clearing systems are not centralized; ie, every member clears according to their own policies. They can accept or reject according to their own discretion. Suppose that the site became a clearing member of Visa and was then able to process those accounts? Remember, there are no federal laws that they would be violating and if the feds want to actually prosecute with the UIGEA, we have a decent chance to win.

4. Smart cards. If #3 above is polly-anna ish, the site can function with smart cards. Our euro friends have been using these for a while. http://www.smartcardbasics.com/overview.html
http://www.howstuffworks.com/question332.htm
http://en.wikipedia.org/wiki/Smart_card
http://www.smartcardalliance.org/
The key is that smart cards store value on the card. A complicated system would require readers at the computer of the player, plugged in like a dongle. A simpler system would have a centralized authentication method.

5. PPA. They are a non-profit. What is their position on this concept?

6. Telephony/cameras. If the site was 1 table only, I would like to see an integrated voice/camera setup so that you can at least interact more with the other players.

[freecard4all]

[ QUOTE ]
You left out most of my description of how to raise funds: [ QUOTE ]
Set up the card room as a non-profit. Hire an experienced and successful non-profit fundraiser. I think money would rain down into such a non-profit from all the wealthy people in the US who love poker.

Charge a membership fee: $25 annually, with prizes and levels and stuff if you give more, like all non-profits. I.e. 'World Champion' level giving of $50,000 or more gets you an entry to the WSOP and all the prizes from lower levels.

[/ QUOTE ]
You don't think rich poker players like Gates and Soros would donate significant funds to such a non-profit?

[/ QUOTE ]
either my sarcasm detector is broken or I don't get the point.
I considered the first paragraph to be a joke [img]/images/graemlins/wink.gif[/img]


And no, I don't think anyone would admit publicly that he "posted 1.000.000 for hungry children, 1.000.000 for peace and 1.000.000 for gambling for free".
What's going to be next - free hook shop non-profit organization, because "that price is a joke"? [img]/images/graemlins/grin.gif[/img]



If Tuff Fish gets some advertisement this idea can work. But I doubt he will get sponsorship anywhere close to the rake (why wouldn't you pay the rake directly then...).

[Grasshopp3r]

See Craigs list if you want an example of something that was started without profit expectations and then blossomed.

[Alobar]

[ QUOTE ]
See Craigs list if you want an example of something that was started without profit expectations and then blossomed.

[/ QUOTE ]

comparing craigs list with a poker site is absurd. The overhead to run and setup craigs list is like a bazillion times lower than what it would take to setup and run a poker site.

It would be like comparing the costs of running a local mom and pop grocery store to WAL-mart

[questions]

Who's going to work at a non-profit poker site??? Further, there are rules about who can legitimately claim to be non-profit. A poker site probably won't fall within those parameters. [img]/images/graemlins/laugh.gif[/img] The very idea. And I seriously doubt the IRS is going to let you claim a tax deduction for money sent to support this "non-profit's" mission, thus undercutting one of the biggest appeals that non-profits hold for philanthropists and the affluent. This business model needs work.

[MicroBob]

I reiterate that I still don't know if any of this makes it potentially legit or not and also that I really don't know what I'm talking about AT ALL regarding non-profits and stuff like that...but fwiw:

Seems like there is some flexibility with non-profits from state-to-state and with the right lawyers and re-working of 'your mission' etc I think you can take a profitable enterprise and try to pull off calling it a non-profit.

I worked for a minor-league hockey team in Memphis that was owned by a non-profit organization partly claiming the charitable stuff they did for the community and stuff like that.
I believe it was revealed that this organization moved from Tennessee to Mississippi because of more flexible and lenient laws about non-profits or something like that.

I know diddly about how it worked. The team president had a really good lawyer to figure out all that stuff and how they could pull it off.
They also got in some trouble for suspiciously looking more like a for-profit venture than a non-profit and I don't know what came of that. Buying your own hockey team and then claiming that now it's part of your non-profit organization struck some people as kind of weird.

Cliff-notes version: You might be setting yourself to get in trouble. But I believe there are creative ways to re-define "non-profit" if you have the right legal-counsel to help you do it.

One way I could immediately think of might be to take an extremely small rake or membership-fee, use some of it for operations and to maintain the site, and use the rest of it to donate to charities.

This would effectively be similar to some charity poker or charity casino night where people pay an entry-fee or whatever and compete for some prizes in there and part of the money goes to renting the space and perhaps even paying the host or MC of the event.

For the non-profit poker-room, get various poker celebrities and companies to donate chip-sets, autographed posters or hockey-jerseys or whatever, have the members of the site bid for the items, and then donate the extra profits to more charities.
My extremely uninformed and amateur impression is that donating to charity in such a way could conceiveably allow you to take advantage of not-for-profit status.

[syncmaster]

Who's paying for all this if the players are not? I don't think its cheep to process cashouts, advertise, and stop cheaters.