Hey everyone,

It´s Friday afternoon here in Europe and time preparing for the weekend while having "fruitful-discussions" about various topics.

Today half-the office is discussing about the question: "What is the most common way amongst players to calculate how much rake in % you pay for a SNG?"

Option A: Look at a "$10+$1" SNG and say: I pay 10% fee, because $1 is 10% of $10!

Option B: Look at the "$10+$1" SNG and say: I pay 9.09% fee, because $1 is 9.09% of the $11 total buy-in!

Thanks in advance for your help!

Have a good weekend!

Cheers,
draw5cards4thenuts

A.

You are effectively counting the rake twice in your option B - both as the total buy in and then using the rake figure as a percentage of that total buyin (which already includes the rake amount).

To clarify - rake is a percentage of your total buy in. The sum of the rake is not part of the buyin, as rake doesn't contribute to the prize pool.

+1

Just to clarify the wording of the poll question, it should be what is right and what is wrong, not most common.

I'm sticking with my comment! Option B is counting the value of the rake twice and thus is simply an incorrect answer - IMO!

B.

you pay $11. prize pool gets 10/11... house gets 1/11 (rake).

I dont understand how this is counting anything twice

B is correct

It's an interesting one - but I think B is incorrect, because the whole point of rake, is that it is a % of a "buy in", and that buy in is used in the prize pool. "Rake" is not a percentage of the total amount one pays, it is the percentage of the "buy in" only.

Using the 10+1 example, if you say the buy in is $11 (which includes) rake, you are effectively saying that the buy in is $11, so what is $1 as a % of that total figure?

ie, the $1 is the rake, and the $11 also includes the $1 - thus you are using the rake figure ($1) twice in your calculation which isn't correct.

That's how I see it.

In a 6max 10+1 SNG 66 dollars is paid in total by the players, 6 of that is rake, or 9,09%.

The difference is in wether you see the rake as something that is added afterwards or just something that is incorporated in the price.

I think it should be incorporated in the price because you can't remove the rake from the price as a seperate component, it's not like "you pay 10 dollars and there is an extra cost of 1 dollar added", it's "you pay 11 dollars to play a 10 dollar SNG", it's an integral part of the product, not an added tax.

10x 10+1 sngs, Paid 110 in buyins $10 went towards rake. I don't see how this could be anything but 9.09%

Youve opened pandora's box

Think about sales tax. You buy something that costs a dollar pretax and is 1.10 after tax. How much is the sales tax?

I think Option A is right, because I think it´s the same principle as VAT.

Let´s say, I am a shop owner and want to sell a product for 100€ before VAT, then in Holland the pricetag shows 119€ because of 19% VAT in Holland.

Using option A the VAT % is right, because 19/100 is 19% as it has to be according to tax laws.

With option B the VAT is not 19%, because 19/119 is around 16% which is lower than what the tax law states.

For me, this is the point. The sales tax is 10% i.e., it is 10% of $1 dollar, which is 10c and that 10c is added to the value of the product, which is $1, thus $1.10.

It would be incorrect to say that sales tax is anything other than 10%, and this, in my view, is that same scenario as the $10+1 example.

you wait 1.5 years to make your first post and just say the same thing as the one above you?

I dont think theres correct and incorrect here. People are just thinking about two different things. Either what % rake does the site tack onto my buyin or what % of the money that i just paid goes to the house.

lol!

When determining your ROI you don't simply ignore the fact that you paid an entry fee. The most common way of viewing rake and the percent of rake that you pay is to look at as $1/10 = 10%. However, when determining your ROI, IE if your EV ROI is 10% in a $10+1 SNG, you should be earning $12.10 for every buy-in, not $12.00 flat.

The common way to view rake is Option A, however when taking into account ROI calculations, the math is similar to Option B. I wouldn't say that there is a mis-conception about calculating rake, however, as other posters mentioned, it's really how you view it. Buy-in * 10% = Rake paid, or Buy-in + Rake * 9.09% = rake paid.

So correct answer IMO, is both as it's irrelevant...

The maths is obviously correct on both options, and people are just squabbling over terminology. The rake is 10% of the prize fund contribution, but it is also 9.09% of the total buyin.

lol, saw someone who joined in 2005 make their first post in a zoom thread, like he's been hanging around 2+2 all that time waiting for pokerstars to get there act together

A IMO.

Juk

I typically think in terms of A, for no particular reason.
B seems more consistent with cash-game rake.
A has a range from 0 to infinity.
B has a range from 0 to 100.

Fuzzy thinking ITT.

NO. While that would seem to be the question that most ITT are answering, it doesn't make sense. It renders the question as

"What is the correct way to calculate how much rake in % you pay for a SNG?"

That is impossible to answer because you haven't specified what the rake is a percetange of, or what is the purpose of calculating rake as a pecentage of something. And that is why we get the two different answers.

Alternatively it implies that is incorrect to calculate rake as a percentage of more than one thing. This is wrong. Obviously it can be correct to calculate rake as a percentage of either buyin or of total expenditure. It would also be correct to calculate rake as a percentage of an indivdual's total winnings, for instance to compare whether the individual would make more money spreading the game than playing it. It would also be correct to calculate rake as a percentage of all investment fees paid if one was comparing the efficiency of investing equal amounts in poker, bonds and mutual funds. What one should calculate rake as a percentage of depends upon one's purpose. Since the purpose has not be specified, it is not possible to say that the percentage should be taken of one specific thing.

The question as asked does make sense, and is equivalent to asking: "Do most players calculate rake as a percentage of buyin or as a percentage of total outlay?" While this question makes sense, IDK if anybody knows the answer. A poll is a suitable way to arrive at the answer, but this one won't have the sample size to give a meaningful answer. Also, I have no idea what real use the answer would be to anybody.

Red writing is always fairly definitive so I'll go with that after my eyes stop hurting.

B but it really doesn't matter, you're still paying 1 dollar.

interesting that Pokerstars Steve voted for the higher rake option

Hi. The problem I see with this question is that it is pretty useless (a vacuum question) and doesn't lead to any useful insights.

I believe that an example of a relevant question on the same topic is: how much ROI you need to have to be break even in a 10+1 tournament?
Since our investment is 11$ we calculate ROI from that value, and to get our dollar back we would need 9.09% ROI, so it is B amount of ROI that makes us break even.

Now the question to people who answer A: Can rake be 10% if 9.09% ROI makes us breakeven?