Should casino tournament wins be included in commission calculations?

[Muppet]

We all know that a progressive jackpot win should never be deducted from affiliate net revenue. Jackpots are self-funded by player contributions, and not casino "profit" that can be lost as the money never belongs to the casino. For this reason a progressive win can be great for both the casino and affiliate.

My question is, do you think casino tournaments should be treated the same way? Imagine you referred a player that won a significant amount in a tournament that was self-funded by players. Would you expect that player's winnings to be deducted from your commissions or the player segregated until they played the winnings back? Or would you expect a tournament win to be excluded from the commission calculation, same as a progressive jackpot win?

I believe they are equivalent scenarios. A tournament is more or less a short term jackpot that is guaranteed to be paid at a certain time. The tournaments are funded by players who contribute to a kitty that is partially paid out at the end. The contributions made over and above the prizes (and any affiliate commission paid on buy-ins) are profit for the casino. The prize money is never the casino's money and paying it out is not a "loss" that the affiliate should share in, either through reduced commissions or segregation. If a winning player plays and loses some of the winnings, the affiliate that referred them should be entitled to a share of that profit.

What say you?

If you are an affiliate manager, how does your program treat this situation?

[universal4]

I think it depends on the structure of the tournament and whether the entry fee is treated like a rake.

An example would be a slot tournament with a $1.00 buy-in.

If the tournament jackpot is derived from the $1.00 entry, and we are paid a commission on that rake, then the jackpot certainly should NOT come out of our net-win, as that jackpot has been paid from the tournament fees.

The casino should be happy to earn whatever percentage they have defined from the entry fee, and often less than 100% of the fees are paid out in the jackpot so they often gain on that side too.

If the casino is not happy with this scenario, they should define tournament commissions separately, and we as affiliates will then determine if we want to promote the tournaments (or the casino) based upon those commission terms.

Rick
Universal4

[JackTenSuited]

As above, a poker style rake system is the fairest way as you are sharing (guaranteed) profit with the casino

[Muppet]

That is exactly the situation that I am describing.

[Renee]

Tourneys are treated like progressive jackpots with us.

[Jason FTA]

Hi Ladies and Gents,

Long time no chat

This is an interesting topic and I am thinking of running a test today. This is my scenario:

I player signs up and plays in a $1000 winner takes all freeroll. He is lucky enough to get the highest score without taking part in any add'ons or rebuy's. The player then takes the $1000 and losses it back to the casino. Does the affiliate earn commission on that 1000 bucks lost back to the casino?

What this space for the answer!!

See you all soon.

Regards
Jason

[universal4]

Of course the affiliate should earn on those losses.

The casino should have already earned from the tournament rakes that were generated from the buy-ins for the tournament, the jackpot won by the player was already covered and the casino earned the profit they already made.

The winnings should be deposited in the players cash account so if they do in fact play it off, that is net win to the casino, and normal commissions should be paid on that.

Rick
Universal4

[Jason FTA]

Ok, I created the account... played in a test tourney and won the prizepool (Cashable money). I then checked the account and noticed that the tourney winnings were in fact a noncash entry which means it will not affect affiliate earning if I happen to lose the 200 bucks back to the casino. Now cashing in the winnings might be a different story as it will result in a loss to the casino.

[Kazino]

IMO This case (and not only) can be explained much more simply ... As an affiliate I earn money from Casino/Poker Earnings...

... In Case of Tournaments, Casino/Poker sites will earn some commission for organizing these tournaments (from Buy-In, etc) ...

... As consequence Casino/Poker site will never lose when organizing a Tournament, regardless of the fact which player has won this tournament (player sent by you or anyone else) ==> Which means that you will never loss from Tournaments (except some cases such as Chargeback and may be some other similar cases).

In case when your player has won this tournament, then lost a part of earned amount by playing in the casino (exclude tournaments, progressive stakes, etc), your commission will be your % of "Casino Earned Money" = "Player Lost Money".

[universal4]

Jason,

In my opinion, the flaw takes place when the tournament winnings are NOT CASH.

Why are winnings non cash?

Were your tournament fees paid by bonus money?

If you paid the tourney fees from your cash account, and winnings are not cash....then I do not want to promote the tourney's at whatever property you did this at, and not sure I want to promote them at all...

Please name the casino you ran this test.

Rick
Universal4

[Muppet]

This is an interesting topic and I am thinking of running a test today. This is my scenario:

I player signs up and plays in a $1000 winner takes all freeroll. He is lucky enough to get the highest score without taking part in any add'ons or rebuy's. The player then takes the $1000 and losses it back to the casino. Does the affiliate earn commission on that 1000 bucks lost back to the casino?

Ok, I created the account... played in a test tourney and won the prizepool (Cashable money). I then checked the account and noticed that the tourney winnings were in fact a noncash entry which means it will not affect affiliate earning if I happen to lose the 200 bucks back to the casino. Now cashing in the winnings might be a different story as it will result in a loss to the casino.

I don't think the way you framed the question is particularly clear. There is no such thing as a true "freeroll" because the winners almost always spend money on rebuys. And even if not as in your scenario, other players that did not win the tournament did rebuy. So it is a given the casino earned some money from hosting the tournament. Whether that was enough to pay for the $1000 prize pool is another question. Maybe they made $3000, maybe they only made $500. So your last line of "it will result in a loss to the casino" is debatable and could be completely wrong if the tournament was profitable. Remember the prize money is paid at least partially, and in most cases totally, by players - not the casino.

However I can see that unlike a progressive jackpot it is possible that a casino could pay out a "guaranteed" prize pool that ends up being more than the combined total of entry fees and rebuys (rather than the pure rake-based tournament situation where the entry fees contribute to a pot that is a fixed percentage of the buy-ins).

The reason I asked this is that we referred a player that won a 5 figure tournament amount in a guaranteed payout tournament, rather than a rake-based pot (apologies for saying the opposite earlier, my mistake). The player has been segregated from other referrals, so thankfully it did not wipe out our other commissions for the month. However that means we don't earn any commission on that player unless or until they lose more than they won in the tournament. I think that is an unfair situation. However the casino's position is that since they paid commissions on the entry fees from players that were referred by us and other affiliates, they don't want to pay them again on the prize money which is funded by the entry fees as it would be double paying. I can understand this argument to a certain extent, but holding the entire winning amount against our commission is not a fair solution.

It is obviously complicated and without knowing how many players that paid entry fees were referred by affiliates and the total money earned on the tournament I'm just guessing. But I think that a fair solution may be to segregate the player and have a negative balance that is based on the proportion of the entry fees that were paid to affiliates, rather than the whole prize amount.

Further bad news though, I have since found out after further discussion that this program does the same thing with progressive jackpots and will subtract wins from an affiliate's earnings, which is complete and utter nonsense! I'm still in discussion with them so I'm not naming names right now.