And then there’s the FREE insurance.  Obviously, I’m no dummy and am only going to insure as much as you contribute.  So if Merge shuts down tomorrow, you’re just as screwed as you were before.  But if you take me as an example, I can be 70% insured in 6 months: I generally keep around a $4K on a site, and I have $2.5K in perpetual cashouts.  I generate over $5K a month in rake.  That means after 6 months, I’ll have the max 70% coverage on one site.  So I can actually open a second account and get that protected as well by the end of the year.  Two accounts are enough to get me two to three cashouts every 4-6 weeks.  That’s not bad.  Add another cashout (or two) from my new Co-Op buddies, and I’m sitting pretty – mostly insured and a cashout every 7-10 days.  Black Friday will be a distant memory.

The insurance money would kick in on a number of different contingencies:

1)    If a site actually goes under (whether it be seizure, bankruptcy, fraud, etc), you have the right to transfer your account balance in exchange for the 70%.  In effect, you are guaranteed 70 cents on the dollar on your bankroll (including pending cashouts, but not including non-cash benefits like points, tourney tickets, freerolls, etc.).  That’s pretty good as a fail-safe, considering Merge funds are trading as low as 80 cents on the dollar now… and Merge is up and running!

2)    If a site has “difficulties,” like they have some temporary legal woes or it takes longer than 2 months to process a cashout (like Cake), you can borrow against 50% of your share of the fund.  I think the way this would work is you sign over a prorated share of your bankroll, and when things calm down, you can repay that amount.  This gives people the comfort of knowing that they can have good cash flow even when times are bad.
 
3)    As mentioned yesterday, the fund would also kick in should any member not follow thru on a trade.  It's unpleasant to think about, but the protection is there.

I think each player needs to take some responsibility for their bankroll management.  That’s why I’m reluctant to have the cooperative insure more than 70%.  70% sounds about right to balance the objectives of peace of mind and responsible bankroll management. 

The framework has been discussed in the last three posts, but I'm still mulling over some details, so let me know what you think - or if you have any concerns.  I will probably start with Carbon, Black Chip and Lock (if they'll ever get back to me) as the Merge sites, and then go from there.  Merge should be opening its doors in the next few weeks to US players, and this means you can actually start playing with some new fish.  I’ll also open up an Everleaf site, Minted Poker (see my review next week).  Bodog’s not taking any affiliates right now because of their management change, and Cake is just a mess.  So if you are a US player, these are your best two options.  Or is it?!? (later post)

This could potentially be great for everyone, and it is a live example of the "cooperation between players" I talked about in a previous post.  Since no one stepped up the last time, I figure *I* should.

(For the non-nature lovers out there, there is a high probability the first penguin gets eaten)