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

01-24-2013 , 09:05 AM
Quote:
Originally Posted by theskillzdatklls
perhaps instead of all this rabble someone should just go out and create their own poker site with a sustainable ecosystem.
Perhaps instead of asking for lower taxes, you should just vote for a different president.
Rake pricing for a sustainable poker ecosystem Quote
01-24-2013 , 09:35 AM
Quote:
Originally Posted by BluffingX
Perhaps instead of asking for lower taxes, you should just go and settle a new country.
fyp
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01-24-2013 , 11:19 AM
The problem is that poker is a game that has proven from the start that it can be obscenely raked without having much immediate affect on player traffic. The method of sneakily taking little and often from winning pots is easily abused in an unstable high-risk market such as Online Poker. The big problems come in the long run as obscenely over-charging a game whose future market heavily relies on its deceptive swings, a community of regular players and a good flow of beginners will result in the loss of interest of its current players and stunt any future growth as it's image will be decimated.

Willingly paying customers or not, its killing the game in the long run.

Changing a system of paying will not make much difference, it's the amount being taken, of which the bar has been set ridiculously high from the start.

I believe the raking system is still the superior option as its:

1. More attractive to recreational players
2. Makes regs pay more per table
3. Maintains and encourages regular depositing, as appose to withdrawal fee method could see a lot of money swing back n fourth without customers paying anything

However, its one drawback is that it has proven to be prone to abuse from money grabbing companies, and its up to the players to persuade sites to see the long run and harmful affects of over-raking the game.

ps sites having been giving away 70%+ of life time rake away affiliates for having a banner, they CAN afford to do this right

pss rake-free sites are not good examples of their success as none have even attempted to advertise or invest a half decent amount in building a good size player base, and taking ZERO money is just the other extreme!
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01-24-2013 , 01:30 PM
Quote:
Originally Posted by knircky
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.
"Structural problem" That's well put. By lowering the rake you automatically turn ten of thousands of break even players in to modestly winning players. Now tell me that being a small winner vs. a breakeven one would not drive these players to continue playing. While if they continue to break even under the status quo, they may well choose to quit and put their time and effort into something more worthwhile.

Cliffs: With lowered rake, breakeven players become small winners and therefore more likely to continue playing.

Lower rake also carries less drawbacks than rakeback since it would not incentivize rakeback grinders.

Sites need to realize that if they want to take the long view over a short term cash grab that they need to be made aware that syphoning so much rake per annum is simply not sustainable. I honestly think that it's in everyone's best interest that rake be lowered. The effects of overraking can be seen in the dwindling number of cash game players on Pokerstars.fr.
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01-24-2013 , 03:33 PM
its funny that while we discuss this multiple sites announce that they are getting rid of their most grinder-friendly rewards. To instead focus more on casual player friendly promtions.
In an effort to do exactly what we talk about here, to improve the "poker ecosystem"
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01-24-2013 , 03:45 PM
Quote:
Originally Posted by henholland
its funny that while we discuss this multiple sites announce that they are getting rid of their most grinder-friendly rewards. To instead focus more on casual player friendly promtions.
In an effort to do exactly what we talk about here, to improve the "poker ecosystem"
What is even more funny is that people still believe that sites will give them more money or make it rake free, subscription only sites (which is like the most ******ed idea ever).
Currently only Pokerstars and Ipoker still highly reward high volume grinders and thats all when you consider sites with at least decent liquidity. Yet people still don't get it.
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01-24-2013 , 08:03 PM
Quote:
Originally Posted by henholland
its funny that while we discuss this multiple sites announce that they are getting rid of their most grinder-friendly rewards. To instead focus more on casual player friendly promtions.
In an effort to do exactly what we talk about here, to improve the "poker ecosystem"
Yeah they're robin hooding it from the grinders, doubt they'll get round to giving much of it to the poor though.

Quote:
What is even more funny is that people still believe that sites will give them more money or make it rake free, subscription only sites (which is like the most ******ed idea ever).
Currently only Pokerstars and Ipoker still highly reward high volume grinders and thats all when you consider sites with at least decent liquidity. Yet people still don't get it.
If a case can be put forward that slashing rake would make the difference between a moribund, rigged pit game and a mainstream popular skill game in 5-10 years time then yes, I think sites would have to start taking notice. Big if though.

Its totally up to players to kick up this stink now though cos sites will just slowly close though door after the horse has bolted, and poker's image and popularity is in the gutter.

Sounds dramatic, but on a personal level poker has been my life for the last 8 years and I've pretty much given poker up due to its image and bleak future.
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01-24-2013 , 08:10 PM
Quote:
Originally Posted by BluffingX
Perhaps instead of asking for lower taxes, you should just vote for a different president.
i never asked for lower taxes or bitched about them. i moved out of the country and take advantage of a 93k tax exemption for being out.

if the rake is too high, don't play or do something instead of posting mindlessly in these threads... because as we all know these threads have accomplished a whole lot over the last decade.
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01-24-2013 , 10:51 PM
If you're willing to move to an arguably less desirable country solely to play online poker then you should be more concerned about these issues than anybody. It can be a bit tough to see through the noise, especially given how cliche a comment this is, but online poker is indeed dying. We can still profit today, enough to even make a nice living quite easily in poorer countries, but the sites are experiencing rapid declines. Year over figures tend to be dropping by 5% to nearly 40% for all major sites.

The future of online poker a couple of years - perhaps even a year down the line is extremely bleak. The sites don't want to act on this issue since right now they're likely at a crisis level internally and most solutions would involve them losing even more money in the short run. When you're starving you're probably not going to be too inclined to listen a solution that involves you eating even less today - even if it might mean the difference between having any food at all next month or not.

I doubt this thread will change much for a site like Stars. With their monopoly they know that at least as there is 'some' online poker, they'll be at the top so long as the status quo remains. Their primary goals will be to procrastinate while appearing concerned about player interests as long as possible. But eventually new sites will be coming along. Whether that means US state based sites, bitcoin operated independent sites or something all together unexpected. And I think these threads are extremely useful for them to know that there are thousands of discontented players looking, somewhat paradoxically, for change and stability in the market.
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01-25-2013 , 12:13 AM
I mean it ultimately comes down to one simple thing. If you're raking more than is coming in then you're cannibalizing your own company. I think it's reasonably likely Stars is already in this situation - and most other sites almost certainly are. The question is how to deal with that. Right now the sites are trying to deal with it in an ostensibly reasonable fashion - by reducing the amount going out. Notice how there's basically no meaningful promos on Stars anymore? Party is cutting off the top tier of their VIP program, the US facing sites are getting rid of rakeback, etc. But the problem is that this, in turn, results in even less coming in as the sites become even less inviting to play on. As these measures are all just a bandaid, they'll likely be forced to soon resort to even more drastic measures which will again further reduce to the appeal and image of online poker.

In a way it's analogous to a government trying to decide whether to cut or spend their way out of a recession. But one major difference is that residents of a nation are generally stationary. For those that don't like your changes? Tough luck. But this is a business, and an internet business at that. If people don't like your changes - they're gone. And that's exactly what we're seeing happen.
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01-25-2013 , 12:54 AM
Quote:
Originally Posted by Unabridged
i'd love to see a poker site that charged a monthly fee instead of rake, i think $10 or $20 a month should be enough. i dont think it should be much more costly than running a large mmo. Maybe even have a high tier for large games at like $100 a month to cover extra transaction fees.
We should also petition the sites to deal fewer hands per hour so the fish get more bang for their buck! Fewer hands per hour, increased sustainability.

The invention and popularity of Rush poker must have stung Do it Right
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01-25-2013 , 01:34 AM
Quote:
Originally Posted by theskillzdatklls
if the rake is too high, don't play or do something instead of posting mindlessly in these threads... because as we all know these threads have accomplished a whole lot over the last decade.
Pokerstars rake 2003 =
Pokerstars rake 2013 =

Seriously, you don't have a point at all.

It takes me 30 seconds a day to post in this thread. And there is a >0% chance a new poker site sees a thread at the top of the most popular poker forum in the world and thinks to themselves "hey, why don't we try having lower rake on our site". Especially during a year with a lot of potential for US regulation.

The fact you even post here is pretty funny.. like going to drug rehab clinics and trying to convince everyone that drugs are ok.
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01-27-2013 , 09:21 PM
Quote:
Originally Posted by Do it Right
Let's say the rake was 10% to $20. Guy sits down at $200/400 on FTP, or scout sits down at $50/100 on Stars. Are you suggesting those tables would not instantly fill? How often do/did they run without a very soft spot? There will always be whales and always be people lining up to take their money. The rake in Macau is capped at 200hkd, or just over $25USD. Somehow those games still run. I'm not stating this to attack you or your comment, but rather pointing out a reality that the sites also realize.

Many people are suggesting none of this money will make its way through the stakes. After all it's just microdonks getting everything, and they've always been, always will be microdonks. Of course this is completely ignoring the correlation between high stakes players and 2003, and similar, registration dates - well before most microdonks had even played a hand of poker. Let's not forget those tables didn't even exist back then. 2003, that's one number, a very important number. Let's consider some other numbers.

http://www.buyhands.com/blog/rake-top-100/

That link provides rake information per stake. Here are the top 15 stakes Stars makes their money from:

1. $100NL 6-max
2. $50NL 6-max
3. $100NL 9-max
4. $200NL 6-max
5. $25NL 6-max
6. $100 PLO 6-max
7. $200 PLO 6-max
8. $25NL 9-max
9. $400PLO 6-max
10. $50NL 9-max
11. $50PLO 6-max
12. $200NL 9-max
13. $10NL 6-max
14. $100NL 6-max
15. $200NL CAP 6-max

Stars rakes roughly $700k from those 15 stakes on a daily basis.

Here is how the proportion of rake versus earnings for the top 50 players at each stake, by winnings. It provides an interesting insight at those stakes, compared to higher stakes:




So let's say we bring those stakes, which are generally $200NL and lower, in tune with higher stakes games. So we drop the rake by 40%. We just said above that Stars rakes around $700k per day from those games. That is $280,000 more that's in the poker economy every single day. That's more than $102,270,000 more money left in the poker economy each year.

Let's now look at a player like scout: http://www.pokertableratings.com/sta...earch/scout326

He drops roughly $1million per year and lately has been dropping even less. Dropping the rake at those games introduces the equivalent funds of 102 more scout's into the game per year. Just think about that for a minute. If you know anything about poker player it's that they live and die by the Peter Principle. We're not going to have SSNL millionaires, that money is going to move up the stakes.

It seems ridiculous to suggest that lowering the rake at stakes 20x, even 100x, lower than what you're playing could benefit you. But when you look at the actual numbers, it will. The amount of money is enormous.

I think Stars raising the rake higher stakes games is a bit silly. It is ultimately pennies in comparison on to the amount of money in play in this game, but at the same time I hope it was a wake up call. The low stakes can't really be raked much more. As that graph I showed above the biggest winners at lower stakes games are already giving 50-70% of their winnings back in rake. That's a grim picture for the other 99% of players. But as online poker continues to decline in popularity and costs for the sites because of regulation and other issues continue to rise, they're going to look to maintain their old revenue lines. Guess who they're going to turn to next. There's a group that is still only paying about 3% of their earnings in rake.

It's cliche but it is -as always- so apt:


First they came for the communists,
and I didn't speak out because I wasn't a communist.

Then they came for the trade unionists,
and I didn't speak out because I wasn't a trade unionist.

Then they came for the Jews,
and I didn't speak out because I wasn't a Jew.

Then they came for the Catholics,
and I didn't speak out because I was Protestant.

Then they came for me
and there was no one left to speak out for me.


Some very successful high stakes players have even gone so far as to suggest that over-raking the lower stakes games was a good idea since it prevents competent competition from being able to move up, keeping the higher stakes games soft. But we're all hens in this game and trusting that fox to keep you safe from the other hens, well that's a dangerous game.
Do it right, i cant find these charts any more. Can you?
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01-27-2013 , 09:25 PM
By the way Do It Right i think the numbers from your post are so different to mine (from a few million hands) because I have only 2k+ from most guys in my DB thus the variance evens out a lot and makes lots if guys winners that actuallt are not?

What do you think. You can read the details if u combine knircky and blogspot, if u dont know them already.

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01-27-2013 , 10:41 PM
**** this ****. Very good post, Do-it-right.

The cause of this is the over-hyper regulation and taxation of the market. Hold on, I am not a crazy libertarian, I'll explain.

I've been looking at the requirements for a european gaming license. Most (all maybe?) euro rooms have a lisence either from Malta or Gibraltar. With the exception, of course, of closed markets (France, Italy, Spain) which get their licenses from their own govenrnment. Some other countries are also looking to regulate and block the traffic, take for example my country, Bulgaria, has recently passed a law, that is listing all the rooms into either "approved" or "un-approved" list. As soon as ONE poker room gets a license from our Gambling Commitee, all other rooms will be authomatically moved in the "un-approved" list and blocked. The law grants power to the executive organs to manually control the traffic via ISP censure.

Now, what it takes to get a gambling licence? For online poker, or remote gambling, to even be considered by the Gambling Commitee, you have to fork out 40k BGN (20k EUR) in legal fees, the whole process will probably take close to a 100k BGN (50k EUR). Both the Gibraltar and Maltian licenses are even more expensive. Even MORE if you want a sports betting site, or online casino. If you want all three, you don't pay the highest fee, you pay all the fees.

This is just to be considered a viable candidate for a lisence. There is no refunds if you are not approved.

Furthermore, you have to be able to prove you have at least 600k BGN in investments in your business, and 300k money reserves. For poker; close to double that if you want casino/sports betting.

****. I mean, 600k? For this money, I could not RENT an office, I could buy the whole ****ing building and fill it with computers, provided I'm not too picky.

And 300k just sitting there for no good reason? I mean, I get the idea, but any self respecting business will keep the player funds separated from the operating funds anyway. Holy ****, this is effectively just burning 300k.

And not to forget, all these money are just to be considered. Where are they going? Funding the commitee, with 5 members... And how long does it take to be considered? 1 month, with a clause that if the decision is hard, they will take 2 months.

....Oh, and not forget, they require 15% of the winnings just going simply to them. Just like that.

How can you try and make business like that? I am 100% that with 100k BGN (50k EUR) I can successfully start an operating room, give better promotions than any other room on the market, put more money towards improving my software that most of the rooms, and still make up my investment within a year. There are several banks that may give 100k loans, but a million? Nah. Nobody. Even with a perfect business plan, no. There can be no free market if there are no competitors.

I'm not against regulation, but this is not regulation for the sake of our protection and well being, just think about Purple Lounge for example. What good did the LGA did then? Nothing. This is regulation purely on the basis of "We are the government, you have no choise, we will take your ****ing money because we can".
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01-27-2013 , 11:45 PM
Quote:
Originally Posted by knircky
Do it right, i cant find these charts any more. Can you?
Those charts are based on data from PTR. The numbers are from the top 50 earners at each stake.

Quote:
Originally Posted by knircky
By the way Do It Right i think the numbers from your post are so different to mine (from a few million hands) because I have only 2k+ from most guys in my DB thus the variance evens out a lot and makes lots if guys winners that actuallt are not?
The reason your graphs are so radically different is because 2k hands is going to yield artificially high earn rates, solely due to variance. 10bb/100 in rake isn't going to seem particularly bad when you're looking at a 40bb/100 winner!
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01-27-2013 , 11:56 PM
Quote:
Originally Posted by Do it Right
Those charts are based on data from PTR. The numbers are from the top 50 earners at each stake.



The reason your graphs are so radically different is because 2k hands is going to yield artificially high earn rates, solely due to variance. 10bb/100 in rake isn't going to seem particularly bad when you're looking at a 40bb/100 winner!
Yep that's what I thought as well. Did you create these charts?
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01-28-2013 , 10:40 AM
the feeling when you stack off with AK and villain got ak too, and you both lose3-6 bb from it is just disgusting.
Rake pricing for a sustainable poker ecosystem Quote
01-28-2013 , 11:16 AM
Quote:
Originally Posted by meepwn
**** this ****. Very good post, Do-it-right.

The cause of this is the over-hyper regulation and taxation of the market. Hold on, I am not a crazy libertarian, I'll explain.

I've been looking at the requirements for a european gaming license. Most (all maybe?) euro rooms have a lisence either from Malta or Gibraltar. With the exception, of course, of closed markets (France, Italy, Spain) which get their licenses from their own govenrnment. Some other countries are also looking to regulate and block the traffic, take for example my country, Bulgaria, has recently passed a law, that is listing all the rooms into either "approved" or "un-approved" list. As soon as ONE poker room gets a license from our Gambling Commitee, all other rooms will be authomatically moved in the "un-approved" list and blocked. The law grants power to the executive organs to manually control the traffic via ISP censure.

Now, what it takes to get a gambling licence? For online poker, or remote gambling, to even be considered by the Gambling Commitee, you have to fork out 40k BGN (20k EUR) in legal fees, the whole process will probably take close to a 100k BGN (50k EUR). Both the Gibraltar and Maltian licenses are even more expensive. Even MORE if you want a sports betting site, or online casino. If you want all three, you don't pay the highest fee, you pay all the fees.

This is just to be considered a viable candidate for a lisence. There is no refunds if you are not approved.

Furthermore, you have to be able to prove you have at least 600k BGN in investments in your business, and 300k money reserves. For poker; close to double that if you want casino/sports betting.

****. I mean, 600k? For this money, I could not RENT an office, I could buy the whole ****ing building and fill it with computers, provided I'm not too picky.

And 300k just sitting there for no good reason? I mean, I get the idea, but any self respecting business will keep the player funds separated from the operating funds anyway. Holy ****, this is effectively just burning 300k.

And not to forget, all these money are just to be considered. Where are they going? Funding the commitee, with 5 members... And how long does it take to be considered? 1 month, with a clause that if the decision is hard, they will take 2 months.

....Oh, and not forget, they require 15% of the winnings just going simply to them. Just like that.

How can you try and make business like that? I am 100% that with 100k BGN (50k EUR) I can successfully start an operating room, give better promotions than any other room on the market, put more money towards improving my software that most of the rooms, and still make up my investment within a year. There are several banks that may give 100k loans, but a million? Nah. Nobody. Even with a perfect business plan, no. There can be no free market if there are no competitors.

I'm not against regulation, but this is not regulation for the sake of our protection and well being, just think about Purple Lounge for example. What good did the LGA did then? Nothing. This is regulation purely on the basis of "We are the government, you have no choise, we will take your ****ing money because we can".
The two biggest online poker rooms have licenses from Isle of Man http://www.gov.im/gambling/. They don't seem to need all those requirements you listed.

An application is 5000. Then 35k per annum + 1.5% of profit.
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01-28-2013 , 12:24 PM
Quote:
Originally Posted by knircky
Do it right, i cant find these charts any more. Can you?
I find it slightly disturbing that you quote a post in which the author compares raking a few more dollars a day from high stakes poker players to the Nazis imprisoning and ultimately killing millions of innocent people, and all you want to know is where can you find the excel charts?
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01-28-2013 , 03:39 PM
Quote:
Originally Posted by pechkin
the feeling when you stack off with AK and villain got ak too, and you both lose3-6 bb from it is just disgusting.
Yea I wish they would have zero rake for split pots or at least do it for supernovas or sumthing but its like this whole thread ; wishing
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01-28-2013 , 04:26 PM
Poker scout shows a pretty solid upward trend over to past 6 months for all the major poker sites. To me, that doesn't say poker is dying.

Haven't people been saying the same thing since the birth of online poker? First it was 2006 with UIGEA, then 2008-2011 about people whining about games being too hard, then Black Friday (which was a legitimate concern), and recently the scaling back of RB and promos has lead to people spouting the same moronic doomsday prophecies. There are problems with online poker right now for sure, but they aren't nearly as dire as many people here make them out to be.
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01-28-2013 , 04:37 PM
The grim reality is that due to heavy regulation and a fractured market, PokerStars holds a virtual monopoly, and that's always going to cost more for the consumer.

Pretty sad that it costs about $14/hour per table to play online cash poker, which is about the same as it costs to play live poker. Surely the online sites could pass the savings of having a virtual room as opposed to a live room on to their customers.

That being said, as soon as online poker is legalized in the US and the regulations are aligned with other countries, PS will get some competition that will lower the rake.

Obviously the current situation is already killing the ecosystem.
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01-28-2013 , 04:43 PM
Quote:
Originally Posted by Bad Luck Brian
Poker scout shows a pretty solid upward trend over to past 6 months for all the major poker sites. To me, that doesn't say poker is dying.

Haven't people been saying the same thing since the birth of online poker? First it was 2006 with UIGEA, then 2008-2011 about people whining about games being too hard, then Black Friday (which was a legitimate concern), and recently the scaling back of RB and promos has lead to people spouting the same moronic doomsday prophecies. There are problems with online poker right now for sure, but they aren't nearly as dire as many people here make them out to be.
This link through pokerscout has the graph below showing peak-player numbers:

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01-28-2013 , 04:47 PM
Also, I think charging a fixed rate per time, say $7-$8 per hour at $100nl would be good but either way I'm sure that the sites could charge about half the rake they charge right now and still make a tidy profit. Although the Eric Lindgrens of the world won't get their 5fig monthly paychecks and 7fig credit lines, they'd at least have a shot to make a living at the tables.
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