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Rake pricing for a sustainable poker ecosystem Rake pricing for a sustainable poker ecosystem

01-21-2013 , 05:54 PM
Quote:
Originally Posted by john_kane
+1

Very bad players are easily capable of losing 1 buyin every 30 minutes.

Does anyone really think they stop playing because the rake is 10BB/100 rather than 6BB/100?

The reasons they leave are:
- they get bad beats and think it's rigged
- they get constantly isolated preflop
- nobody speaks with them
- they have no chance of recouping their losses (like they do with mtts)
- it becomes an expensive hobby very quickly

Now, maybe if they got paid a some cash every week, and got a token to some fun tournaments, then maybe they'd come back, deposit and play.

But between 2004 - 2011, this rake has gone back to the regs instead (something that has been changing in 2012 and will continue to change in 2013, fortunately for everyone)
IMO the very bad players (the ones that go all in with random trash, the ones that lose a buy in in 10 hands on average) are just as rare as the winning players - <5%. The majority of the people is losing a little or somewhat breakeven.
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01-21-2013 , 06:02 PM
The more tables people are playing the worse they are playing.
The worse people are playing the slower fish gets busted, or it can even win because they play 1-2 tables > less likely that fish gonna bust and start thinking poker is rigged or just that busting that fast is not fun and will not return.
The more average multitable players are there, the less good players have to play with fish only(bumhunt), because they can outplay multitablers.
To play more tables at least somewhat profitably there either should be more fish, or less rake. If there was possibility to get enough fish it would be done already, but the only possibility for that is to reduce field edge over fish somehow. So the only solution comes as reducing the rake, if stars policy will keep focusing on games being regfest(thats what they did in the last years).

Spoiler:
And some pure speculation, but removing shortstacking was a big, big mistake imo. It gave fish ability to gamble/win some while risking less, fish could stackoff with top pair or 2nd pair and not feel busted, while stacking off with 100 bb vs reg fish would be dominated by set or 2 pair or at least monsterdraw in 90% of cases. And the only ones who were unhappy were regs because their winrate suffered by 1-2bb because they couldnt play with fish all the time, so they complained and for some reason stars listened.
Then shortstacks either started to play big stack and became good regs, or they just left the game while being breakeven before and made no threat to the economy.
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01-21-2013 , 06:08 PM
Quote:
Originally Posted by LT22
Thank you for posting ITT. The only thing a reduction in rake does is help saturate the games with more tight/reggy players that you have little edge on. Fish don't play b/c there's no multi-way action. They're donkey tendencies get exploited so quickly when it's 5 vs 1 instead of 4v2 3v3 etc.

I'm not sure if I mentioned this earlier, but I intended to...the sustainability of poker is poor b/c people remember when fish were willing to lose thousands at $1/2+ cash games. These people basically don't exist anymore. They were always going to disappear regardless of rake.

I've said it before, I'll say it again. Poker is an economy with ebb and flow. If you eliminate or reduce rake, you will find a whole new economy, but that economy will still have tiny edges. There's always going to be some small minimum winrate that will keep regs playing. If that winrate happens to be 2bb/100, then the games will converge to the point where 2bb/100 is a solid winrate. There weren't enough good players to create this effect in 2005, but now there's an oversupply of regs just waiting to win money.
this

Quote:
Originally Posted by knircky
Well I have to repeat myself. Fish don't have any impact on weather or not the game is beatable.

Fish are great and all, but we don't have a problem of not enough fish when it comes to the sustainability of the game.
what?

Quote:
Originally Posted by knircky
I have to say two things:

1. Bad players and fish. Again are not the problem.
2. I agree with you that having to pay 80% on your winnings would suck. The problem is how can you like rake when it does just that?! Rake takes away the same 80% yet in a way that we don't realize and because of that its ok?


We are not saying rake matters to anyone. We are saying it should. People do not understand how much rake they are paying and that it makes the game unsustainable. That's exactly the problem. Rake is killing us, but no one notices.
Afaik most regs do know about rake and roughly how much they rake. The fish dont however, and I think keeping it this way makes the most sense.

I dont rake even close to 80% of winnings, and i dont know any other winners who does either, so not sure how you get a number like that. With rakeback and rewards added into the calculation i bet rather few net-withdrawing players pay this much rake relative to their winnings. Im also pretty sure btw that the number you would to tax winners to compensate for normal rake would be higher than 90% even.
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01-21-2013 , 06:13 PM
Quote:
Originally Posted by pechkin
The more tables people are playing the worse they are playing.
The worse people are playing the slower fish gets busted, or it can even win because they play 1-2 tables > less likely that fish gonna bust and start thinking poker is rigged or just that busting that fast is not fun and will not return.
The more average multitable players are there, the less good players have to play with fish only(bumhunt), because they can outplay multitablers.
To play more tables at least somewhat profitably there either should be more fish, or less rake. If there was possibility to get enough fish it would be done already, but the only possibility for that is to reduce field edge over fish somehow. So the only solution comes as reducing the rake, if stars policy will keep focusing on games being regfest(thats what they did in the last years).

Spoiler:
And some pure speculation, but removing shortstacking was a big, big mistake imo. It gave fish ability to gamble/win some while risking less, fish could stackoff with top pair or 2nd pair and not feel busted, while stacking off with 100 bb vs reg fish would be dominated by set or 2 pair or at least monsterdraw in 90% of cases. And the only ones who were unhappy were regs because their winrate suffered by 1-2bb because they couldnt play with fish all the time, so they complained and for some reason stars listened.
Then shortstacks either started to play big stack and became good regs, or they just left the game while being breakeven before and made no threat to the economy.
Less rake will not lead to an equal increase in your win rate. Less rake will saturate the games even more and you will spread the fish money amongst a few more people. More peanut butter, but more bread as well.
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01-21-2013 , 06:32 PM
Henholland how would you define a game that is beatable?
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01-21-2013 , 06:37 PM
Quote:
Originally Posted by LT22
Less rake will not lead to an equal increase in your win rate. Less rake will saturate the games even more and you will spread the fish money amongst a few more people. More peanut butter, but more bread as well.
That makes no sense. Unless you are looking at this from one particular persons point of view. But even then I think the logic is wrong.

1) Less rake = more winners and higher win rates.
2) better players win more and will move up
3) that makes both small and higher stakes games softer

It's just common sense if players as a whole will win more on avg then everybody will win more on avg as well and more players can enter the ecology.
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01-21-2013 , 06:44 PM
fish are people too and unlikely many think, they come here to win, they want to win, they just can't.
There is not enough fish(anyone disagree?)
Thus regs are forced to play less tables, when they play less tables they bust fish that are left fast, much faster, they table select better and dont play regs.
What should stars do?
a) Increase the rake for non fish players and give reload bonuses or w/e to fish for that money > fish is happy, fish will return.( give status based not on rake generated, but amount deposited?)
b) Reduce current field edge on fish - ban huds(reduce only to vpip/pfr), ban notecaddy, ban fishfinding soft etc.
Give players reason to multitable - reduce their rake, but only if they play a lot of hands per hour or something, combined with no hud, it's not gonna be mirrions of profit for them, but possible option.
Onetabling fish now can win some and outplay soft-dependant players and multitablers for a little or at least not lose 100bb/100> fish is happy, fish will return.
c) Leave huds alone, Turn games into regfest with low amount of fish so people fight for money that are left. Not so much fish is needed. Only possible if the rake is reduced because the edges gonna be small.
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01-21-2013 , 06:45 PM
Quote:
Originally Posted by LT22
Less rake will not lead to an equal increase in your win rate. Less rake will saturate the games even more and you will spread the fish money amongst a few more people. More peanut butter, but more bread as well.
Is this a bad thing though? Presumably the money spread by fish in a lower rake environment will in part be going to the breakeven/slightly losing players who are now winning because of the lower rake. Anybody who was already beating these players is in turn going to win money from them as well as from the fish. Furthermore, these now slightly winning players are likely to take their winnings up to a higher stakes where they will no longer be winners, thus establishing a new equilibrium in the poker economy. The money is still going to funnel up, and if there's more money there will be more money funneling up.

So long as there are more fish there should be a) more money to go around and b) a widening skill disparity between the stakes.

The only question is will lowering the rake bring in more fish? Some people say no because decreased rake means less marketing done by the sites. Others are saying yes because a fish will be able to get more entertainment out of their money with a higher opportunity to run hot. This seems to me to be the focal point of this discussion unless somebody wants to argue that an increase in fish will not bring more money in the poker economy.
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01-21-2013 , 07:10 PM
Quote:
Originally Posted by pechkin
fish are people too and unlikely many think, they come here to win, they want to win, they just can't.
There is not enough fish(anyone disagree?)

.
Yes I disagree that there are not enough fish.

Actually every player is a fish.

If you are saying fish = losing player, well then no matter what happens, no matter who leaves or joined the game, there will always be winners and losers. In fact these days we have more and more losers.

if you claim fish = losing players then I think the problem is there are way to many fish. We need more winners. Losing players will eventually leave the game, while winning players will tend to stay, move up and increase the economy.

The current Rake structure is turning many players into losers. Which is the problem. So yes we have too many fish due to rake.
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01-21-2013 , 07:20 PM
no i mean real fish.
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01-21-2013 , 07:21 PM
Quote:
Originally Posted by fridge logic
Is this a bad thing though? Presumably the money spread by fish in a lower rake environment will in part be going to the breakeven/slightly losing players who are now winning because of the lower rake. Anybody who was already beating these players is in turn going to win money from them as well as from the fish. Furthermore, these now slightly winning players are likely to take their winnings up to a higher stakes where they will no longer be winners, thus establishing a new equilibrium in the poker economy. The money is still going to funnel up, and if there's more money there will be more money funneling up.

So long as there are more fish there should be a) more money to go around and b) a widening skill disparity between the stakes.

The only question is will lowering the rake bring in more fish? Some people say no because decreased rake means less marketing done by the sites. Others are saying yes because a fish will be able to get more entertainment out of their money with a higher opportunity to run hot. This seems to me to be the focal point of this discussion unless somebody wants to argue that an increase in fish will not bring more money in the poker economy.
I believe this to be true.

And yes bringing in new deposits is important and a key question, but at the same time we cannot forget that rake today is so high that more money is raked than deposited. And that is the problem. Of course we can solve this by getting more deposits, however that way the structural problem ( rake can be higher than deposits) is not solved.
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01-21-2013 , 07:22 PM
Quote:
Originally Posted by pechkin
no i mean real fish.
Real fish?
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01-21-2013 , 07:59 PM
Quote:
Originally Posted by knircky
Real fish?
nvm, i've misimagined that you were talking about who lose after the rake is taken, those are not fishes actually, as they only lose to the site.
And ye, anyone who lose any amount pre rake can be considered a fish.
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01-21-2013 , 09:01 PM
Quote:
Originally Posted by pechkin
nvm, i've misimagined that you were talking about who lose after the rake is taken, those are not fishes actually, as they only lose to the site.
And ye, anyone who lose any amount pre rake can be considered a fish.
That makes sense. So fish = net losing player.

Hower this is a relative term.

Imagine taking away all current fish from the economy. Would the fish be gone and the games would they be beatable?

No and yes. winners will simply become new fish and the game will be just as beatable as before. Likewise if you add new players old fish might become winners.

Who is a fish or not does not impact if the game is beatable. Poker decides who wins and loses and dynamically divides the players. That is as long as you do not distort the game. Which is exactly what rake does.

The game becomes unbeatable if rake is higher than money won. The higher that disparity the tougher it is to win because less money will actually move between players.

So again the problem is not fish vs reg ratios. The problem is the distortion of the game.
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01-21-2013 , 09:13 PM
Quote:
Originally Posted by LT22
Less rake will not lead to an equal increase in your win rate. Less rake will saturate the games even more and you will spread the fish money amongst a few more people. More peanut butter, but more bread as well.
This is incorrect.

What's the average earn rate in poker?

It's a simple question. Poker is zero-sum. In poker it's 0. In raked online poker the average earn rate is -rake. If the rake is 10bb/100 then the average earn rate is -10bb/100. If the rake is 5bb/100 then the average earn rate is -5bb/100. Simple.

The average earn rate will increase if rake is reduced. That much is completely obvious. Of course this doesn't approach the abstract notion of 'your' earn rate. The only way 'your' earn rate would decrease is if your average table after any changes would become substantially tougher than it is today. The average earn rate will have increased so for 'your' earn rate to decrease, the tables you play on would have to become vastly tougher. 5bb/100 isn't a lot relative to the rake, but relative to edges in poker it is enormous.

In today's games your typical table is 5 moderate to good regs and 1 softer spot. That spot might be weak reg or indeed a fish. Though of course fish today rarely means 40/5 gonna call it off with top pair. How exactly are these games going to become vastly tougher? If indeed the sites are flooded with tons of bad regs, with lower rake you can actually afford to try to eek out an edge against them - it may even be comparable to playing against 4 good regs and 1 soft spot with high rake.

If the only way you can profit is by playing against huge fish then fortunately there's also this little tool known as table selection. You'll still be able to bum hunt as much as you want. Indeed there will be more competition as there will be more players - but there will be more fish as well. Their money will last longer due not only due to lower rake but instead of being attacked by 4-5 moderate to good regs there will be substantially more weak regs who will be much less efficient at taking the fish's money. And hey you know - that even sounds like more fun for the fish. Maybe they might actually decide to deposit a second or third time for once!

And re: the concept that the games would become super tight. Good regs adjust their tightness relative to the rake - even if without consciously doing so. Good regs will approach the optimal tightness over time. That optimal figure is a direct consequence of the rake: the lower the rake, the looser the optimal VPIP will be as you'll be able to squeeze edges out of hands and spots you previously could not due to the rake. And as for the bad regs. Who were the first regs to end up dropping out of the games as the games have become tougher? It was the 28/23/12 3-bet type guys - the 'action' regs. The nits and tags are the ones still around in today's games whereas lags have become an extremely rare sight.
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01-22-2013 , 12:38 AM
Quote:
Originally Posted by knircky
That makes sense. So fish = net losing player.

Hower this is a relative term.

Imagine taking away all current fish from the economy. Would the fish be gone and the games would they be beatable?

No and yes. winners will simply become new fish and the game will be just as beatable as before. Likewise if you add new players old fish might become winners.

Who is a fish or not does not impact if the game is beatable. Poker decides who wins and loses and dynamically divides the players. That is as long as you do not distort the game. Which is exactly what rake does.

The game becomes unbeatable if rake is higher than money won. The higher that disparity the tougher it is to win because less money will actually move between players.

So again the problem is not fish vs reg ratios. The problem is the distortion of the game.
its a 2 sided problem, either there is not enough fish to beat the rake, or the rake is "too damn high".
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01-22-2013 , 01:22 AM
decrease
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01-22-2013 , 01:28 AM
I just read something very interesting, historic even: http://www.pokerscout.com/news/weekl...ar=2013&week=4

It's the latest Poker Scout weekly traffic update. It seems generally unremarkable except for one little key point. For the past weeks, months, perhaps even years Poker Scout has been coddling the rapid decline of the sites with a little phrase they've used in damn near every single traffic update since the major declines have begun: "...the total worldwide market continues to feel the effects of a tough regulatory environment and a global stagnation in poker's popularity...."

That phrase is finally absent. In its place it seems even Poker Scout is starting to realize maybe it's not entirely outside forces causes this decline in poker. In place of their typical blame-game for the losses they stated flatly: Overall, the market is down 5% from this time last year, despite the relaunch of Full Tilt Poker and the launch of the Spanish market.

I'm not sure what, if any, influence Poker Scout has but it sure is nice to finally see at least one company willing to admit even if indirectly: "Hey.. ummm.. maybe our actions might actually have something to do with the reason why we're bleeding players faster than Usain Bolt being chased by a rapid bear."
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01-22-2013 , 04:22 AM
Thanks DIR for that link, and for keeping the public (and sites aware) of the effects of rake on the overall economy.
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01-22-2013 , 04:33 AM
Quote:
Originally Posted by POW
I think lowering rake to a calculated point would be hugely beneficial for the growth and sustainability of online poker and ultimately for the siteís profits in the long run. The reason poker is so popular/attractive is because it is a beatable skill game, viewed by many as a sport and anyone can win. Itís addictive because it is very tough to know if you are the winner or fool, which is why I think itís so important that the industry sets its prices to result in:

1. A notable proportion of *average-skilled players going on heaters over decent samples

2. Evidence the games are beatable by a notable number of players equating to a desirable pro image

* average-skilled meaning player of average skill level

The effects rake has on variance

Player skills are relative, but the key to sustaining healthy games that contain whales and gods (the minority) is to retain a good customer base of average-skilled players (the majority) in between keeping the games running and churning rake. This is achieved by keeping the av-skill players blissfully unaware of their losing edge to the rake over a decent sample by fulfilling the 2 points made above. This is far from the case at the moment and the graphs below show the effect current rake prices are having on the average-skilled player.

To illustrate this point I am using these parameters and stats:
- Decent rec and reg sample size over 1 year
- Standard Deviation is 80bb
- Rake inc. rewards @ low stakes 7bb/100
- Winning player wins at 2bb/100


Effects of current rake produce <1% winners among average skilled players and winners experience huge variance over 1 year sample:




With a 43% reduction in rake, theres a huge increase in the number of average-skilled players now profiting, >10%, and winners have more desirable variance over 1 year sample




With an 85% reduction in rake, it is virtually indistinguishable how many average-skilled players profit vs lose, even by looking at this graph, and winners variance is well controlled and solid over a 1 year sample.



I understand that the large majority of poker players have to lose so that sites and skilled players can profit, and individually this isnít a problem, but when >99% complain they never win, rarely go on heaters, and most good winning players suffer huge variance with some breaking even over a year, this seriously harms pokers image and fundamental attraction for beginners to the game, and rake is becoming a more prominent factor as skill levels converge

Iím not suggesting sites cut their prices by 85% but 1 look at these graphs and itís obvious that a change in rake would make a huge difference of how online poker will be viewed and discussed by the masses, it would keep average-skilled players far more in the dark of their true edges and winners with a great image, to me it looks like there is a tipping point that can make the difference between a sustainable/growing industry and a passing trend and Iím not 100% sure sites give a fudge because their bottom lines for this year look great, and if poker couldíve taken off as a mainstream sport, theyíd never know.

Thoughts? Actions? Picket signs?
rake not going anywhere done ,so u worry about the rake dont play!!! SIMMPLE
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01-22-2013 , 04:47 AM
Quote:
Originally Posted by bigsid
rake not going anywhere done ,so u worry about the rake dont play!!! SIMMPLE
smoking not going anywhere, so you worry about smoke don't go to bars!!!
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01-22-2013 , 05:06 AM
Give players who are not grinding statuses just for the money they deposit, they would feel more welcome and will return. Offtopic, but what do you think?
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01-22-2013 , 05:25 AM
Quote:
Originally Posted by pechkin
Give players who are not grinding statuses just for the money they deposit, they would feel more welcome and will return. Offtopic, but what do you think?
That seems like a great idea, but I think a large part of Stars' business plan is to give as little back as possible to recreational players. Many of them are playing with well under 10% rakeback. Even when Stars took over FTP one of the first things they did was to make rakeback require a lot of volume (for not even as much back!) and they also got rid of Iron Man which was arguably the most rec-friendly promo on any site.
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01-22-2013 , 05:44 AM
Quote:
Originally Posted by Do it Right
This is incorrect.

What's the average earn rate in poker?

It's a simple question. Poker is zero-sum. In poker it's 0. In raked online poker the average earn rate is -rake. If the rake is 10bb/100 then the average earn rate is -10bb/100. If the rake is 5bb/100 then the average earn rate is -5bb/100. Simple.

The average earn rate will increase if rake is reduced. That much is completely obvious.
no, you are completely missing the point. The point he was trying to make is that if you decrease rake then more regs will over time flock into the games, because they now are able to win money playing these games. This will make for a reg to fish ratio that is way worse than it is today.
The relationship is definitely not linear either. Cutting rake in half for example would increase the number of regs (after some time) by a factor way bigger than 2. This is because there are a lot more players that would then make it into the winners-club than currently is in winning-club.

So over time a decrease in rake wouldnt translate into what you guys think it will translate into. It will reach a new equilibrium after some time where there are a very big number of marginally winning players fighting for each fish (net-losing prerake player). So for the guys who are now winning this situation wont necessarily be better and more profitable at all. Most likely it will after it has reached equilibrium be about equally profitable as before, but it would be different in the sense that table selecting and bumhunting-skills would be more important than it is today for anyone who wants to maximize profits
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01-22-2013 , 05:57 AM
henholland, do you think it's clever to simply cut off my quote exactly at the point I begin responding to the point you claim I 'missed'? I'm not sure what you're trying to accomplish aside from making yourself look like a troll. As you added nothing to LT's point, beyond that I'd simply refer to my previous post - sans your creative editing.
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