I decided to post this in the "Live Casino Poker", but this question/thought applies to online poker as well. I'd like your opinion on this.

Alright... Every poker tournament, live or online, has it's entry fee - money not going into the prize pool but rather used to cover the expenses of the casino (salaries, advertising, electricity, food). The casino also needs to have a profit, of course. Let's assume that the same casino (or online operator) is about to host the following tournaments in the next two days. Also assume that both of the tournaments have the same or identical structure and will be done within the same day.

Tournament #1 - Buy-In = 55$ (50$ + 5$)
Tournament #2 - Buy-In = 550$ (500$ + 50$)

Almost every time, tournament #1 will have greater attendance. Let's say that 200 players enter tournament #1, and 80 players enter tournament #2. In the first day (tournament #1) the casino will have to use more staff for more time, use more tables (reducing the number of tables available for cash games aka rake) and feed more people. Of course there could be other expenses that I'm missing. Bottom line, the expenses of the casino during the first day will be greater than the one's of the second. When at the same time...

Income from the first tournament: 5$ * 200 players = 1,000$
Income from the second tournament: 50$ * 80 players = 4,000$

In both cases, the entry fee is 10% but, in the second tournament, it is quadruple despite the players being less than the half! When at the same time, the expenses are lower... Plus that the difference between an entry fee of 5$ versus 10$ won't have much of an effect to players' bankroll, when an entry fee of 50$ versus 20$ will have a bigger one. The higher (buy-in) we go, the greater this effect will be.

Doesn't it make more sense that the higher the buy-in the lower the percentage of the entry fee? Isn't it better for the poker players willing to move up and for the poker ecosystem in general? (The exact same question applies to online poker)

I don't think you'll find many 50+5 live tourneys.

Which live casino has two such tournaments?

Please give any such casino.

ie, I think your assumptions are not valid.

I'm merely speculating, so feel free to correct me, but I assume that the live casino will lose money on the $50+$5, but earn money by having 200 players come to the casino, many of them playing other games before and after, while perhaps also bringing others. A higher buy-in tournament also brings in people, but less people, and possibly more skilled and specialized and less recreational players. Another possible answer, I guess, is: Because they can.

Edit: If this casino doesn't actually exist, then I guess an explanation is superfluous.

First I don;t think that question is random.

Second your assumptions tend not to accurate representations of real world live poker. (generally the rake in higher buyin tournaments is a lower percentage than that of low buyin events, and usually give longer structures to higher buyins ---- I realize that online may be different but there costs are different)

But if we take your assumptions for what they are .... just hypotheticals you would be correct that the casino would be making more profit on the larger buy-in tournament.

But so what.....when you go to the grocery store not item on the shelf has the same markup.

Why might a casino do this .... well at the end of the day does it matter to the bottom line where the profit came from? If using the profits from high buy-in tournaments helps subsidize your lower cost tournaments isn't that just a question of marketing decisions ... perhaps they feel that that low buy in tournaments are good for getting traffic into the room which maybe they believe feeds other profit centers (cash games, high buyin tournaments, or the slot machines)

1) Structure and starting stack will rarely be the same between those two buyins. The bigger event will have some combination of more chips, longer levels, more intermediate levels such as having a 100-200 plus a 100-200 with 25 ante, and a dinner break.

2) The smaller event likely has unlimited rebuys and due to the low cost players will be getting their money in very light during the rebuy period. They would be paying rake twice for the same single seat they would continuously occupy with one buyin in the $500.

3) The only times rake is that low in a low buyin event is in satellites which tend to be over very quickly or in a nightly tournament run for the purpose of getting people into the room so they will stick around and play cash/table games after. They're losing money and forcing the dealers to work for a fraction of their normal cash game rate.

In my experience dealing tournament series the rake tends to match the number of downs (half hour of dealer/table time) pretty closely across the various tournaments. The $1k+ events are a little higher but not by a lot, more like 20% higher than the worst (for us) small buyin huge field tournament. There are sometimes additional costs associated with the main events such as online streaming, reporting, renting the ballroom for an extra day to handle the final 1-3 tables, etc.

Yes, and that's why virtually every casino does it that way.

First of all, I never said that what I described is a representation of the real world. What I illustrated was, obviously, an extreme example and I know that's not what happening in both live and online poker tournaments. What I wanted to ask (but I guess I didn't make that clear) is this: aren't medium and high buy-in event's entry fees higher that they "should"? I mean... Even if you have the entry fee of the second tournament down to just 20$ (only 4% of the buy-in) you would still have 1,600$ of income in total. Make that a two-day event? Then some players will have to sleep somewhere in the night... Plus, some of them will still give away money to the casino in slots/blackjack/roulette. The fact that someone is an average and above poker player doesn't mean that they can resist a casino's temptations, we already know that. So... Do you think that casinos/online operators could help the poker ecosystem by lowering the medium-high buy-in events entry fees even more, thus making it easier for players to move up in stakes - benefiting the poker ecosystem?

if a $550 buy in tourny were to get 200 players, how many players do you think theyll get for 520? it will prolly be about the same. the casinos gunna do what benefits itself and that relatively little decrease just doesnt make sense for them economically

Higher buy-ins generally mean longer tourneys (higher starting stacks, longer levels, etc). More expense for the tourney.

The sort of player that the casino would really like to attract, the recreational player who is going to consume a lot of the hotel's ameninities and play a lot of house advantage games, is going to be pretty insensitive to rake/entry fee concerns. Players who really pay attention to this stuff are going to try to give the casino as little of their money as possible in other areas. And a typical casino isn't really going to care at all about the "poker ecosystem" overall.

Plus whenever someone makes the argument that poker brings in additional casino revenue from the players who came for poker but then gamble at the slots or pit they always conveniently forget the other effect ..... the poker room taking a slots/pit player away from those games for the time they spend in a poker room. I may be that the people in this forum wouldn't go to the casino if their was no poker but we all know that isn't true of everybody ....

The example I used was an extreme one. I don't think you'll ever find an entry fee of just 4%. Even 10% is on the low side. But if you compare 20% to 10%, then we're talking about 50$. The higher the buy-in, the bigger that difference. I do understand that casinos are businesses trying to maximize profit and that's perfectly fine. All I'm asking is how we find a plan that benefits both the casinos and the players/poker ecosystem.

Indeed. But, at the same time, less players means less staff/tables used for the tourney. If the tournament lasts for more than one day, players will have to stay somewhere. Some of them will still gamble, as well. Plus they could use massages, spas etc. I don't know the actual numbers, but you'll have to consider these as well.

I agree with you, although the percentage of these players in medium-high buy-in events that we're talking about is smaller than in the lower ones. In this case (low buy-in), poker is the lure. Indeed, a player that pays attention to entry fees will generally be less of a gambler. But again, we're talking about medium-high buy-in events that, as said, could last for more that 1 day. Plus, the players could spend the money they saved from the reduced entry fee to other features of the casino. Everyone is happy. I know they will "care" about the poker ecosystem if they somehow profit from it. But it's the players' responsibility to somehow speak out and present a plan that will benefit both sides.

Live casinos have much larger fees, especially at the lower buy in.. An $80 tournament, for example would be $65 + $15

Right now, there's a tournament with 0% rake and $6 million for first place.

If you are looking for fees of less than 4%, take a look at events with >10k buy-in.

And it has a buy-in of just $300,000. I've stated multiple times that it's the medium-high buy-ins we're talking about - the general population, the core of the poker ecosystem. Neither the $10,000 and above nor, obviously, the SHRB are in that range. Didn't really get what you're trying to point out.

This about covers it.

Generally, any player that hypothetically would play in a $50+$5 tournament, but wouldn't play in a $50+$15 tournament is not the sort of player the casino wants to attract.

At the $500 level, a 10% rake can be found, but would be on the low side of normal. A 15% rake would be on the high side of normal. I've never seen a rake as high as 20%, at least in the US. So it sounds like casinos are basically in line with your expectations, and thus I'm not sure what your point is.

I think we're focusing too much on the numbers and missing the forest, which is the overall poker economy. In order for it to work properly, there has to be constant flow of players from bottom to top, stakeswise. I think we all agree on that. Concerning online poker, players can easily play a $500 tournament in the exact same way they would play a $1 tournament. But in order for this player to make the same transition in the live poker scene, the expenses will be quite a lot (unless they can play both in the same area, but we know that's not always the case). I'm not only talking about making a living from live poker tournaments, but even playing them recreationaly. Low stakes will always be low stakes, the entry fee doesn't make much of a difference. But if a winning low stakes players can't move up in stakes due to the expenses, then we have a flaw. Many players complain about the cost of playing live tournaments. So, my question is: how do you think the poker tournament organizers could play a role in fixing that hole in a way that benefits both sides?

I'm not sure about that tbh. It's perhaps not the ideal customer, but it's still a customer. A thing you can see in a large portion of "suckers" is their need to make it look like they know what they're doing, even though they clearly don't. This is why salesmen need to give them the feeling that they're getting a good deal, for instance by letting them haggle down an overpriced product to a slightly less overpriced product.

A lot of gamblers have perhaps played a bit online, enough that when they see "$50+$15" it looks like a bad deal, which they on principle don't want to take. Either way, the casino probably won't make much money on the tournament, and it probably won't be scheduled unless they expect the players to also drop off some money on other games as well. Speaking as a guy that has a massive non-poker gambling problem, I can confirm that by tricking me in with a slightly good offer for a $50 poker tournament, I will later spew off $1000 on an 80% rtp slot machine on my way out (why I've blocked casino on my PS). Could be I'm unique in that way, but I imagine that I'm not. They just need to chum the water, bring out the (wannabe) shark, then harpoon it in its god damn face.

*Speaking as someone who also has no idea to run a casino, but who enjoys speculating.

Maybe I'm in a different market, but if I have a $50 tourney and a $500 tourney, I am getting 4x the number of players in the $500 tourney than I am in the $50 tourney and it lasts 4x as long using way more resources and costing me 15x as much to host.

Who isn't playing in a $500 ($450+$50) tourney that would if it was $500 ($470+$30)? Or a $2,000 ($1,800 + $200) that was $2,000 ($1,850 + $150)?

So you think that, inevitably, entry fees can't be lower?

They will play both, if we're talking about the recreational player. But the pro will have to count every dollar to decide if it's worth it. What do you suggest?

The end all is that ppl are going to go where there will be the biggest fields. Entry fee is not usually the deciding factor for where will have the biggest field.