Zero Rake Poker Business plan

[Benjamin]

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payment processors charge a shít load, if a million dollars was deposited in the first week your site was up that probably costs you $50,000, certainly $30,000, and what do you think you need to be deposited on a site to get liquidity? A lot more I would guess.

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Definitely agree with grassho: charge the depositor, but also agree with freecard that the charges need to be hidden.

Marketing could be something like: "Join the US Poker Player's Association and receive the ultimate unlimited deposit bonus", and then just always deduct any deposit fees before paying out the 100% rakeback you give to members. This is obviously covered in the fine print. Members are also paying a minimum $25 annual membership fee to help cover other costs.

Capital drive covers start-up costs, and voluntary donations over $25 are encouraged, as well as voluntary donations i.e. 'tips' when you win a pot are encouraged.

[Benjamin]

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Donations are voluntary and tipping the dealer is not rake. If you have a case for Colorado, please cite it.

For Colorado, membership fees are considered rake only if they are tied to the game. There are very active games at the various country clubs in Denver and they all charge dues, but not specifically for poker.

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I have not case to site. I lived in Colorado for 13 years. I do remember around Superbowl time the radio stations discussing rules for gambling / pools.

If you pay for a membership at a country club, its mainly for the club itself and poker is not a primary benefit. There are no legal poker club memberships in Colorado. If you charged dues for this site, its main service would need to be non gambling related. If its only service is rake free poker, I doubt it will fly in the vanilla poker world.

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As someone pointed out the rules will vary by state. It could be that charging a membership fee would not fly in a lot of states, or maybe all of them for all I know.

Maybe you could have a suggested voluntary donation, and you could solicit voluntary donations with every won pot.

You still hold back finance charges from the rakeback, or from the 'unlimited bonus' in marketing speak. You never receive it, so that should be no problem.

Building a foundation of regular contributers, some of them substantial, would be key.

Yes, there would be free-loaders, but I do think a lot of money could be raised for this vision if you could put together the right team and backing.

You would want to establish an endowment so that down the road you have operating expenses coming from the interest/gain on the endowment.

[Benjamin]

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Who's going to work at a non-profit poker site???

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Non-profits hire people to work for them every day. Why would this non-profit poker site be any different?


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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.

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I am no expert, but I think you can set up a non-profit corporation for just about any 'mission' under the sun. You are right that a poker club would probably not be qualified for tax-deductible contributions.

Tax deductions are a nice tool that do help a lot of charities raise money, and I really doubt a non-profit poker room would be able to use that tool.

The poker room would not be a charity: note the distinction here between a non-profit corporation and a charity.

That doesn't mean that you couldn't raise money from people who support your mission. I support at least two non-profits that are not IRS charitable organizations, and I'm happy to do so despite not being able to write off the donation as a tax deduction.

[Mitch Evans]

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Who's going to work at a non-profit poker site???

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Non-profits hire people to work for them every day. Why would this non-profit poker site be any different?

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Because those organizations actually generate revenue and can pay staff a wage. Your ideas on how this site could actually generate revenue makes me think you live in Fantasy Land. Bill Gates? Come on. Giving gamblers a means to play rake-free poker, I'm sure, is not what he would consider helping the unfortunate.

[Dennisa]

Benjamin

As I mentioned earlier in the thread, and Tuff Fish agreed, if we are using a non profit model, California is very hard assed on non profits. No cash games, tourneys that can only return 10% of the funds received as prizes, with the remaining 90% going back to the charity.

If its run as a for profit company, I don't think its going to fly under the home game statues in many states.

Also I did not mention, that most likely you will need to set up 50 different sites for each state. You don't want the DOJ to interpret this as interstate commerce.

[Rzitup]

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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?

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In the 6 years I have been associated with online poker the number one thing that has always made me chuckle the most is when people say "the overhead to run a poker room is small". It is usually followed by a mention of needing a few servers and some gas money.
If anyone is truly interested in knowing how much it costs to operate a successful poker site I would suggest looking up the publicly available information related to PartyGaming. PG is a publicly traded company on the London Stock Exchange.

[Flintoff]

I have read most of this thread. Is anyone else a little disturbed by Tuff? I genuinely think he is starting to lose the plot.

[Alobar]

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Revenue:
1. Donations. If there are 1,000 players with 1,000 hands per month, that is 1 million hands. If donations are $1 per hand, that is $1 million per month.

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why the hell would I pay $1 a hand I win, in order to play "free" poker. Thats worse than the rake for the vast majority of limits. And even the ones its better than, its not much better once you factor in rake back. For that price id rather play on a reputable site that has competent CS people who arent working pro bono, and who can afford to advertise otherplaces than the local cable access channel.


I dunno what tilts me worse, the amount of replies this completely worthless and total [censored] thread has recieved, or the fact I keep wasting my time replying to it.

[MicroBob]

"I dunno what tilts me worse, the amount of replies this completely worthless and total [censored] thread has recieved, or the fact I keep wasting my time replying to it."


Pretty sure it's the fact you keep replying to it...but it's close.

[kemystery]

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

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well obviously VISA, MC, Neteller, etc. Will rally behind the idea of a free poker site and wont charge any fees for transactions. And the TV stations and websites they will advertise on will feel the same way and give away free advertising. Cheaters just wont play there because they respect what tuff is trying to do, and because he made a statement saying cheaters will be shot.

Its pretty brilliant really

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rofl, exactly.