I wonder where you got this from.

I used to be a games programmer and a games designer working in industry. Technically the costs for making and running a Poker room are not high. Can't speak for the other costs (advertisement, ...). However I doubt that justifies the huge expense of rake.

Consider a game like WoW in which you pay a small monthly fee. Now the effort that goes into making all those game models, scripting those game scenarios, adding fallbacks for all the different 3D cards, ensuring realtime updates & downloading textures which uses tons of bandwidth IS a big cost. Yet they manage it for far less.

Bad regs will only continue playing at the site if they see some kind of profit. In this example in which the bad regs are actually losing against you (the good reg) they are in simple logic regression actually losing players --> since they need fish (aka regular depositors to actually) break even / win slightly. Thus they too will leave sooner or later.

There have been plenty of attempts at creating "rake free" poker rooms - and all of them are famous for populating the bottom spot on the poker-scout liquidity ranking - since they fail at bringing in the deposits that are actually required to fuel the winnings.

For a good winning player it can be massively -EV to move to a rakefree poker room if the delta in savings via rake is smaller than the delta in adjusted winrate. So if a player is winning e.g 8 bb/100 and paying 4 bb/100 in rake (RB calculated in already) he is left a 4 bb/100 winner. So if he has a 2 bb/100 edge over the regs at no-rake-nitfest room - he still ends up winning less than he did at the high rake room. This is without factoring in the capability to multi-table, table select, enjoy superior software, trusted company holding your money, etc. etc. etc.

OK I understand.

Paypal accepts payments from humans by humans putting their credit card information onto the PayPal site. PayPal then send this information to their acquirer who contacts the humans bank to debit the card (I've simplified, but you get the picture). The credit card transaction is coded as "Financial Payment" or "Money Transfer" or whatever. PayPal and their processor have been sanctioned to accept credit cards because they agree only to do gaming in certain countries, to reduce fraud, etc etc. This is strictly enforced and adhered to. If not, then VISA or MasterCard pull the plug, and no more VISA or MasterCard on PayPal. No more PayPal users.

As SOON as BitCoin starts being widely used (and by "Widely" I mean a few percent) on gaming sites, VISA and MasterCard will instruct the card issuing banks to treat BitCoin purchases as gaming purchases. They will also instruct the processors to treat any BitCoin sellers as gaming sellers. This will LITERALLY happen overnight, or maybe within 48 hours. It has happened before in lots of countries for lots of ewallets and ecurrency systems.

Example: In Norway earlier this year the law changed and the banks were told to decline all gaming transactions. Neteller still worked fine though, and players could use their cards on Neteller and deposit to the gambling sites. ONE DAY later anybody depositing to Neteller discovered that it was treated by their bank as a gaming transaction. That's it, game over. Doesn't matter if only 1% of Neteller's business in Norway is gaming, or whatever, VISA and MAsterCard call the shots, and Neteller must comply or risk not being able to accept ANY cards ANYWHERE.

You've missed a trick here with the payment side of things I'm afraid.

Currently it's not all that easy. You either have to use an exchange (of which there are a few) or do a person-to-person trade on a forum or IRC. Most of the existing exchanges don't take PayPal or Credit Cards due to the risk of chargebacks. They take other currencies instead. The person-to-person trades use a web of trust so you need to become a trusted party first.

One would hope that this process becomes easier as bitcoin sees more usage - and usage is growing.

For those interested there is an existing poker room running that uses bitcoin. It uses open source web-based software. It's not very active as mostly only bitcoin users know about it but it's fun to use to see the concept of bitcoin funded poker in practice. This server is not related to genjix's project btw, his plans are far grander! I'm not involved in either project but am a bitcoin user.

As I said before. When you play at Full Tilt, PokerStars, PartyPoker etc. you aren't paying for the software. This is part of the cost, but its not what you are ultimately paying for.

You are paying for the fact that they invest ********s into branding, advertising, customer service, retention, etc. etc. and ensure that players who are regularly losing money at their site - continue to do so - while attracting more people that are also willing to lose money.

This is the true cost and challenge of running a poker room.

I suggest you spend some more time in thinking about the whole ecology issue behind online poker since it seems you are looking at it in way which underestimates the true challenge you face.

He would buy the bitcoins through any of these or whichever other vendors:
http://www.bitcoin.org/trade#Currency_exchange

He could also earn bitcoins by selling something in exchange for bitcoins, just as they could earn dollars. Of course unless they someday really do displace government-backed currency, your average recreational player would not earn their bitcoins this way.

The bitcoins are then stored in an e-wallet on his PC. This is one of the weaknesses of the bitcoin system, in that loss of the bitcoin data file would also cost him the money. A bigger risk is spyware on the PC enabling someone to steal your bitcoins. Because they are electronic, people may tend to expect bitcoins to be secure, like money in the bank, but bitcoins are just like cash. You have to be careful to protect your physical cash too.

Anyway, now that the bitcoins are on your PC, you can spend them with the bitcoin software. You can send the money directly to the poker site and identify the transaction as coming from you. The site receives the coins, verifies them and credits your account. The bitcoin software would then delete the bitcoins from your PC, and backing up the files wouldn't help, anyone else you tried to pay with those same coins would be able to tell that they had already been spent.

Now the poker site has the bitcoins on their server. Since it's core to their business, they'll guard these coins very tightly, or they might exchange them through one of the traders for something else, like gold or government-backed money which they could then put into a bank. When you want to cash out, the process is exactly the same, only in reverse.

It is up to the site whether they want to maintain the account balances and tables in bitcoins or use an exchange rate to hold them in USD or some other currency. If you held all account balances in bitcoins, you might even be able to host a site like this in the United States! (But don't count on it)

If you believe that taking some rake from players is beneficial because it results in better games then the community can elect to make that happen.

And if not everyone agrees with you- then the software is there and you can setup your own room to compete.

Maybe there can even be donation drives to get advertisements. Look at Firefox. The market was dominated completely by Internet Explorer. No other commercial browser was able to enter and compete against the monopoly of IE. Well the community organised and managed to place an ad in the New York Times. With that kind of regular intense lobbying they've managed to be a dominant browser on the web now.

http://www-archive.mozilla.org/press...004-12-15.html

Now imagine what Poker players can achieve when they think that such a thing will benefit them directly (by influx of fish). There can even be branded tournaments where people invest money expecting a ROI from entry fees- I'm just throwing around ideas here. We can't predict how these things evolve before they actually do.

The best thing to do is just ensure there's competition and the minimum hassle for people to self-organise.

If there were no rake, as your title suggests, who is going to compete for the $0 profit to be made? Who is going to setup such a poker site for that matter?

Instead of going into these platonic derivatives, lets examine what actually happens in real life. Online there are paid, and there are free services. They all have different models for running themselves. A few are better than the rest.

Additionally the technical cost of coming to the market is $0. Your operating costs are very low.

The main problem behind that is that many if not most poker players are driven by the desire to maximize their hourly winrate.

As such they might make "donations" if they see it as an "investment" - yet there would be plenty of hassle about how these investments are used and whether they are being used properly etc. etc. etc. etc.

At the end of the day every player is already paying "investments" on a regular basis by paying rake - which goes to finance a large professional marketing department.

The model you propose is ambitious - but I don't have high hopes of it working as decentralized as you propose - since it will be hard to create liquidity. Regs are attracted by fish and fish are attracted by advertisement. Without rake and designated support & retention there will be no fish, meaning there will be no money for winrates which brings regs.

Good luck nonetheless

Thanks.

No deposit bonus or promos and who will pay for the overlays in the guaranteed mtts?

OK I get it. And I even see there is a Bitcoin seller accepting cards and paypal, nice.

My point is that as soon as these credit-card-accepting-vendors start getting lots of poker-site type volume, they have two choices; become a gaming credit card processor or stop processing in licenced or difficult territories. Both have the same effect.

The fact is using a proxy currency will only work if players can get hold of it easily. The only way of getting hold of anything easily online is with a bank account transfer or credit card. The proxy currency in the middle does NOT make processing the card or bank transaction easier.

OK, so I've got a magic file on my hard disc that may be worth many thousands of dollars - or more - and if I don't back it up and my hard drive goes up in smoke I lose it all. So I back it up, and make really sure I don't have any spyware allowing it to be stolen. I'm now worried because I've got lots of cash lying around (basically) in my study, and my house hasn't got a smoke alarm and I am worried about power spikes on my electric and of course there is the risk of burglars taking my PC, but I'll get over that because of the rake-free poker.

What business? Stars/FTP have a clear reason for not making off with the millions they have deposited in their accounts because they are printing money legally at the moment. Its worth much more to them to sit tight and watch the money pour in than it is to risk running off with it all, and expose themselves to criminal prosecution.

A free poker site? What incentive does that have to hold these magic files safely? Sure, it may be able to continue to run indefinitely, but the people who write the software aren't getting paid, they aren't shareholders in the company. There isn't really much of an incentive for them to hold this money that securely. If they run off with it who is going to chase after them?

Why would anyone hold significant sums of money (that is significant to them I guess) with low level of security of funds?

I'm not saying anyone in this thread is likely to do this, but while there are very safe and legitimate ways of playing poker it seems quite a leap of faith to assume a significant number of people will choose to participate in something they will perceive as more risky.

Regarding the "rake pays to attract fish" argument. without rake you don't need fish. you just need to be slightly better than average. rake is massive. its changing the proportion of winning players on a site from ~18% (an estimate i've seen for pokerstars) to 50%.

liquidity is a big obstacle for any new room, commercial or otherwise.

IMO, unless you have industry interests (and lets face it, that's a lot of 2+2 posters) you should be asking how you can get behind a project like this. Its not like its gonna take over the world, but it could provide an interesting alternative and impetus to change revenue models.

+1

And fish don't really care about rake. They care about security, and depositing easily, and branding, and customer support.

This is the problem with some of these ideas; they consider the perspective of the volume generators (on poker sites it is regs, on ebay it is sellers, etc) and discuss ways of setting up the site for their own benefit (e.g. zero rate, zero listing fees, etc).

However the people that make a site a success are the people who pump money in (the casual players, the buyers) and they don't care about rake or open-source. They care about the stuff in bold above.

So everybody needs to be better than average? Wat?

You still are failing to grasp the economy of poker rooms. A few players play a lot and win a lot (regs). A LOT of players play some and lose some (fish). You can call them "below average regs" if you want, but you still expect them to play and lose and play again and be replaced by new players who play and lose and play again. These are the fish, whatever their relative skill level to the rest of the poker players in the world. And getting these fish to join a game costs money. And the raking sites have a LOT more money to do it.

Stop thinking like a winning reg, and think about what sort of player you need to attract to actually have a poker room up and running.

Some people may choose to place their trust in an online service like MyBitcoin.

Who says they aren't getting paid? Selling your software is actually the minority part of the market for development. Most programmers are selling a service. So if you're a site operator then you might request that this software add feature X like PLO and offer a bounty. Or you're a player and have a neat idea for a feature in the client that think will save you money in the long run by having- so you pay a dev for an improvement.

You build trust over time. Banks scam people all the time (legally) and yet they hold the world's funds. I trust PokerStars because they always are very clear and do no dodgy business, and because others trust them. If we have a fully transparent Poker room where it's finances and processes is 100% in the open- won't that make you feel better?

1) Clearly I didn't remotely imply that everybody needs to be better than average or that "everybody" making money was a remote possibility.

2) I think I have a pretty good grasp of the ecology of poker rooms as well as a good idea about how an alternative model might work. To return to my original point, you only need to be better than 50% of the player pool to win. The biggest obstacle is site liquidity. And indeed, raking sites have a model where they are able to attract new players through heavy marketing. New sites, however, often fail to reach the liquidity threshold to get up an running, regardless of their revenue model.

cool idea i hope it works out, take a rake and all players should vote where the budget goes etc. Players should still get like 90% rakeback but you are going to need some funds to bring in the new fish surely ?

Yep. This is an issue. I'd appreciate any insights you have. We have strengths over normal commercial Poker rooms. One of them is that we're the only software offering a Linux native client.

You might want to check our examination of rake-free Poker:
http://www.kartludox.org/index.php?t...ake-free_Poker

For others, here's another topic that needs discussing:
http://www.kartludox.org/index.php?t..._%26_Usability

Thanks. Let players reach a consensus. And we make all our internal information public. People can then weigh up themselves how best to manage things.

You think a player will pay for someone to change the software?

Either way though you seem to have two business models muddled up here.

1. A genuinely free poker service where the software is maintained by the "community" and there are no fees. You have no software development costs and no customer support costs because there will be a helpful bulletin board for you to write questions to (Apple do something similar IIRC). If you have this there is no income stream, and you can't pay people for development. I'll let you worry about how you pay for and run the servers.

2. A paid-for poker service, where the costs are much lower than on Stars/Tilt. An "Easy-Jet" of poker sites if you will (You are from the UK, so I assume you get the reference). Your site won't "waste" money in sponsoring players, putting overlays into tournaments, advertising on the web and paying lots of money for developers and support staff. You won't have TV programs where you stake loose cannons to play against the pros to increase exposure. Instead you will have a loose affiliation of people who maintain the software and pay just for the bare essentials.

How you choose to pay-for this is up to you, but its still paid for and there is still a rake and your USP (ZOMG! RAKE FREE POKERZZZ!1") is no longer true. Its just Poker, but cheaper. Which may be enough, I don't know. I haven't calculated what the running costs are likely to be.

I'm really not sure it will. Lets say you get a group of interested people together you meet online, and they are all clever hackers/coders and have an interest in poker. Two are Brits, one is Swedish, 2 American, 1 a Russian and 1 from Columbia.

These are the guys you are trusting. Presumably each and every one of them has access to the funds you are holding on my behalf. Just because you post your finances (when - in real time?) and processes (I don't know what that means) doesn't mean you aren't placing a lot of trust in people with a very high incentive to steal from you (lots on money, easy), and with a very low risk of getting caught (long way away, false names, who is going to track them down - Interpol??).

Good luck with all this anyway. I don't think it will fly but I may be wrong. Im some ways I hope I am.

You said "Regarding the "rake pays to attract fish" argument. without rake you don't need fish. you just need to be slightly better than average."

(I added bold)

I was just querying who the "you" is in this sentence? If you mean "winning players" than that makes sense - being better than average on a zero rake site will make you a winner. The point I make is the SITE needs fish, that's what the my posts are about, the viability of the SITE, not of specific groups of players.


I think we are in agreement here (more or less - the 50% figure is a bit low but that's not really important).

Basically the site model as proposed above is going to have few donating recreational players. Without those players MOST regs will flock elsewhere, the really really good players who can stay ahead of 50ish% of the remaining population will be winning players but the population will be very small without fish.

And I don't appreciate the insults by the way, but whatever. My posts in this thread are intended to be helpful.