Insurance is something that has been a part of live games for many years, with players seeking to financially protect themselves against the spectre of bad beats. In the online world however, insurance has in most cases been absent from proceedings. In the past few years though, Chinese apps have successfully implemented insurance options, raising the possibility of insurance systems being rolled out online by major brands.
PokerStars tests all in cashout
In Asian games, both live and online, insurance has become very prevalent. Anytime you are in front and needing to dodge your opponent’s outs, there is always a desire to try to avoid the danger your hand is facing. Given this universal fear, it is surprising that insurance hasn’t made its way into major online poker rooms before now. According to pokerfuse.com, online giant PokerStars has finally started testing an insurance feature, experimenting with the new system at play money tables on its .net domain.
The system works in the following way. If you have a $10 pot and your hand has 70% equity, you have $7 on average coming your way if the hand plays out normally. PokerStars’ system will allow you to collect this $7 minus an admin fee of 1%, which is 7 cents. Therefore, to take insurance you would hit the cashout button and instantly receive $6.93. The hand then plays out, and if your hand would have won the pot, PokerStars will collect the winnings. If your opponent outdraws you, the opponent collects the pot as they normally would.
This gives an extra option to players of course and will take effect at NLH, PLO and 6+ tables, but it also takes money away from players, acting as a new type of rake for PokerStars, due to the 1% fee.
Following the path of Chinese apps?
Chinese apps have been offering insurance for some time, but in a different form. Players requesting insurance through an app will pay a commission while all in, guaranteeing that their hand will win the pot whichever cards fall.
This is system has been playing an important role in the business model of these apps with as much as 50% of their total revenue coming from players buying insurance. The fact PokerStars has adopted a practice it can use to generate more revenue for itself is certainly no surprise given its current business model of squeezing players for every cent possible.
GGNET before PokerStars
Chinese apps are not the only ones to have pioneered insurance systems, with the popular Asian network GGNET also offering a similar system to players.
The principles are the same, but the parameters are a little more complicated for players hoping to qualify for insurance.
In order to qualify, players must meet all the following conditions:
- You must be favourite to win the pot when you move all in
- The pot size must be at least 10 times bigger than the big blind.
- Your opponent must have 14 or less outs
- There must be only two players remaining in the hand.
If players meet all these conditions, they can then choose to what degree they wish to insure their hand, using a bet slider to pick one of three levels of insurance, or no insurance at all.
Article by Craig Bradshaw