Don't we already have demotions based on losses? I've just begun with PvP so, I'm very low on the rankings and I've not lost enough to see a demotion, but I figured once your stars go to 0 you get booted to the earlier rank.

Anyhow, casuals will just play casual matches. Seems only logical, your rank should represent your skill as much as possible. Not how much you queue, no?