I am posting this here because it affects high stakes players as well and they are the people who can influence the masses the most.

By Benjamin1

I'm just a casual poker grinder. I used the game to get through University with zero debt and I've never really put a serious consistent effort into being particularly good at it. However time and time again I find myself wondering why online poker players are so unconcerned with the rake that they pay. Since mid 2007 I've only played about 155k hands. That's roughly 310 hours of poker at 500 hands per hour. Almost entirely at .25/.50 PLO. I've made a pithy $1377.00 which isn't really anything. I play almost exclusively on Pokerstars. Most of the time I've been a Gold Star. I've never been higher than Platinum Star. I've paid $13,687.00 in rake.

That is $44.15 in rake per hour/500 hands. That is roughly 9pt/bb in rake. If Pokerstars allowed me a choice of 100% rakeback but $50.00 per month up front for access to the service I would be playing 1/2 PLO with a sizable roll. What this means is that the games would be considerably softer. I'm not even very good and I play about two hours of poker a week. Instead what's really going on is that Pokerstars, FTP, and others are scooping most of the money. The games are thinning out mostly because people are being raked to death. They come up with flashy things like Supernova Elite to convince you they reward their players. It's all just a clever rouse to get people to grind more. People become obsessed with earning their next bonus rather than playing well or learning the game.

I don't play World of Warcraft. I do however know that millions of people do. These people do so for $20.00 per month or less. Imagine if 310 hours of access to something like WoW cost you $13,687.00. That's $44.00 per hour for your video game. Does that sound like something that makes any sense to you? Fast secure service for a reliable video game doesn't cost that much. Poker is an exceptionally simple game.

So there are maybe three realities of what might happen going forward:

1. People will continue to say and do nothing. Regulars at 1/2, 2/4, 5/10+ will make far less money than if the fish were being raked for less and managing to grind their way up to the higher stakes.

2. Someone will create a poker site similar to 100's of start-ups out there with one key difference. Rake will have two options. Option one will be the system and rates that currently exist everywhere. Option two will be a $50.00 payment up front for 30 days of access to the software. The person who creates this software will become a multi-millionaire and probably be credited with starting the 2nd "Poker Boom" after Moneymaker. Pokerstars, FTP, and others will quickly add the change to their software as well. The other site will probably die as regulars migrate back to the main sites but not without having collected a couple million dollars worth of up front fees for its original backers. The dust will settle and the major sites will now have an option to pay $50.00 up front for 30 days access and receive 100% Rakeback.

3. Players all over the world will publicly campaign for this option forcing one of the major sites to seize the opportunity to corner the market by making this change.

Do you players at 1/2+ want your win-rate to increase by 3pt/bb instantly?
Do you players at 1/2+ want more fish to work their way into your games instead of being raked to death at micros?

If you answered yes to both of those questions then start talking about this issue. The long term health of the games especially at higher levels depends on weak players being able to advance through the levels in order to donate money higher up. I'd be a fish donating at 1/2 instead of making Pokerstars 13k richer. Do you want Pokerstars to take all my winnings with 9pt/bb rake or do you want a piece of that pie?

If we can come together on this issue we will change the landscape of the online poker world as we know it. This is a change that benefits everyone. I urge people on this site and others to come up with a plan to strike on the major sites similar to the Pokerstars.fr sitting out strike until this change is implemented. There is no definable reason why players should pay over $50.00 USD per month for access to an internet video game. These websites are charging insane prices because nobody is protecting the consumer and the consumers are too lazy to stand up for themselves. Lets start standing up for ourselves!

+1

This is really quite useless without real numbers detailing how much it costs to run an online poker site. Do we know for a fact that the major sites could still turn a profit while taking in a fraction of their current income?

Considering the costs for support/marketing I am quite sure platforms cannot profit with this business model but that is why there will be different system from which you can choose - fishes who doesnt care will pay rake and people who care will have the option to chose what type of rake they will pay. I play midstakes and tbh i will be happy to pay even 1k upfront in the beginning of the month and not 5-7k i see now in the end of the month that i have paid.

+1

The issue is, that such a site would have to be created by PPA/other poker organisation/a kind hearted person, because there is no incentive for a profit maximizing firm to follow the business model you proposed (proof: if there were, it would have been created long time ago). The fish who don't care/know about the rake largely overwhelm the players who do.

There is obv a good reason why this idea hasn't been implemented on any major site so far. somewhere back there in 1990s there was prolly a similar site that went bankrupt coz everyone was high on "free real money accounts" and "no deposit fees" etc, which were obv made to make the other sites' profits bigger (ldo).

Sites will be very reluctant to choose an option that can cut their revenue by several times, and fish will be reluctant to join a site where they have to pay a little fortune to play a few hours a month, i.e. you'd be eliminating the avg Joe who deposits $50 every week/month or so and drowns it in some 50 NL table in an hour or two. That means making the games tougher.

Your winrate might still go up as you won't be paying rake but a smaller flat fee, but sites will obv be earning much less money from you and they won't put up w that. When you're paying a flat fee for a variable service someone is usually getting badly screwed, and poker sites will def make sure it isn't gonna be them

Jspazz, couldn't they have an option for each way? You pick your preference. For the guy who doesn't play much the flat fee option seems quite silly and the pay by the hand seems to make more sense. For those that are 24 tabling, 20 days a month for 10 hours a day, a flat fee is obviously a lot more profitable as long as the fee is not a real huge amount. Rake online does seem ridiculously high for what service they are offering you. It shouldn't be the same as live or near live seeing that it costs much more for a live game to run.

You guys seem to feel a since of entitlement, you thinking the sites owe you or they need to make it easier for you to make money are idiots, what you should be saying is what can we do to help keep people depositing. With out fresh deposits game will die, so stop trying to concern your self with little buttons that will make it easier for winning players to win and think how to keep fresh money coming in.

Didn't WPEX start with 100% rakeback and then offered 75% for some time.
Don't know about now.
So why aren't they huge, when its all about the monies?

Completely agree! the sites are there to be profitable...as long as people are willing to pay rake and continue playing they will charge as much as they possibly can. What we need is a fresh inflow of fish....maybe merge some struggling sites with the striving ones and gain a denser population base.

Last years Stars raked $1.4billion or $4,000,000 per day every single day. (source)

Every single one of those dollars was at one point somebody's deposit. The problem isn't fresh deposits but the sites eating up those deposits so fast. It has nothing to do with entitlement, far from it. The sites are obviously free to rake as much as they want. But they're killing off their golden goose. Keep raking 4 million a day today and soon there won't be anything left to rake tomorrow. That's just bad business.

Also, good luck on the prop viffer. You'll pay about $17,000 in rake by the end of it.

Software sucked.
Promotions sucked.
Advertising was almost non existant.

I think it's unrealistic for players to expect no rake, but the current rake is pretty obscene and the profit margins I think must be huge. The sites have a small work force that handles software, servers, advertising, customer service as well as management. Obviously a ton of money goes into advertising (TV and sponsoring players). They also must spend a bunch of money on Lawyers. But I think they have little costs with respect to profits. Eventually some one will try to under cut them imo and if they have a good model it could change the internet poker landscape.

www.paynorake.com


Rake is a rape imo.

How anyone can defend the pokersites in thise case is beyond me.

i have been involved with poker sites in kahnawake, Quebec and know for a fact that charging nearly the same rake for online poker is pure theft. Why no company has created big competition for this is beyond me.

Unless players quit playing, nothing will change though. Supply/demand is simple. Imagine if Commerce could take its current staff in total, and now add about 2000 tables costing not one single dollar more to operate, and this gives a rough idea of what we are talking about.

Wouldnt such a scheme result in a massive increase in the grinder/good player to fish ratio?

Very interesting to see this post because i just recently had a long discussion about the same topic with a couple of my friends. The same wow argument was used however we were looking at this question from the otherside.

We were pondering why people who want to invest in running a poker site do not already run it on some monthly fee based model (similarily to what op suggested except we thought fee should be based on volume/stakes. so the occasional $50 guy would be charged close to 0 or 0, while an nl200 grinder might be charged $100 a month) Why is this weird to us?
1) They would still make profit for sure. I mean precisely if you think about WoW. They offer a service that requires a ton of programmers, graphics people etc. and a hella' lot more servers/bandwith to be running. They charge $20 and make a fortune. You could be offering a much simpler "online game" and charge $50 and you would brutally go under what your competitors are charging so possibly attract large crowds with the right advertising, etc.
2) On the contrary if you just do the same as everybody else, it is very unlikely that you will cut yourself any sort of significant slice out of the online poker cake, and thus become filthy rich.

We came up with the following explanation pretty much:
1) Small investors join one of the networks as a skin, and thus have no such freedoms to radically change things.
2) Large investors who have potential to create an independent poker site and advertise it properly, just generally do not like these sort of gambles. If they see a market with all of the winning players following the same payment model they will be reluctant to go against it. If it does not look promising to invest into a poker site that follows this model they just invest into something completely different.

Of course there might be many oversights here, since I am no expert of economics, but the question itself is very interesting imho.

and Viffer: whose side are you on srsly? less money goes to sites/casinos -> more stays on tables -> less chanche that profitable games die?
such a change would be good for anyone except current leading poker sites? why are you not advocating it?

If online poker gets legalized then we will see major competition. Currently all large scale companies that would invest in this have far too much to lose exposing themselves to this business. Party is a publicly traded company- and they left the US market largely because they couldn't take the liability. Stars and Tilt are basically the only major players willing to take the risk. Online poker is legal FOR US. What they are doing is not a grey area- it violates the UIGEA and the US government considers it to be a big deal.

Online poker has huge profit margins for similar if less severe reasons than Cocaine has huge profits.

trolls are everywhere




There are many aspects of the problem "rake" and the solution will be much more complex than introducing a 50$ monthly fee. This was just an idea which can be brainstormed.


Sites can allow regulars to opt-in some type of upfront payment based on the stakes/volume they play and ofcourse anyone who doesn opt-in will be paying rake exactly the same way they do currently.

Another big problem of "the rake" is that Micro and Small stakes games and especially pot limit games are ridiculously over raked and in the long run it affects mid/high stakes games because people are unable to move up unless they have really high winrates.

Let me ask you a few things:
1. Does it make any sense that the player at 5/10 is raked at the same cap of $3.00 as the guy at NL25?
2. Why are micro/low stakes players so disproportionately raked making it difficult for them to move up the stakes?

I'd prefer this:
NL2 - 10 cent per pot cap
NL5- 15 cent per pot cap
NL10 - 20 cent per pot cap
NL25 - 25 cent per pot cap
NL50 - 50 cent per pot cap
NL100 - 75 cent per pot cap
NL200 - 1.00 per pot cap
NL400 & NL600 - 2.00 per pot cap
NL1000+ - 3.00 per pot cap

Something like that would be a massive improvement. It's not unheard of either. The rake cap at HUNL is 50 cents for a reason. It's because nobody was able to win when it was set considerably higher when the tables first came out.

ps. idea taken from Benjamin1

http://en.wikipedia.org/wiki/Information_asymmetry
http://en.wikipedia.org/wiki/The_Market_for_Lemons

care to elaborate?

I'm guessing that not all of their revenue is from rake. Surely they must be making interest on the billions of dollars in players' deposits that they hold on to.

Yeah. All the rakeback pros will rush there and fish who doesn't know about rake won't be playing there unless they spend a ton on advertising.
If you're good pro you should be looking for sites with highest rake cause they will be fishiest. I don't think we can do much about it.

I would really like to see some competitive raking setups instead of competitive RB (which is going to **** now) or VIP setups. As it is it seems that all sites just roll with the 5% rake with $3 cap. Im surprised a Walmart type of business hasnt jumped into this market and set its setup as 4% with $2 cap taking down the competition. I do know that as it is its hard for small rooms to even compete with just the standard market's take which cued many of them closing down after the UIGEA.

At the same time I do see the Limbo that's set up now where within years the US market could become wide open letting in big business allowing this kind of competitive market. If it does become legal we might see some super competitive rake structures but at the same time we could see the "sin tax" just completely destroying the profit of the big time companies that would come into the market.

A chat with my friendly local liquor store owner educated me about how much tax is taken from both alcohol and tobacco. The sick thing is was that both of them are taxed over 50% of the actual cost to the consumer in my state.

With that I very much wish that rake was much much lower but I think the cost of doing business in this legal climate and all of the addon costs that Ive read earlier itt that tacks onto the rooms cost makes it hard to drive down the consumers' cost in this area.