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

05-15-2015 , 11:16 PM
Quote:
Originally Posted by SrslySirius
If you replaced rake with an equivalent membership fee, imagine how shocked recreational players would be at the price.
not as shocked as ppl that play all the time and 40+ table the **** and butcher the sheep.
Rake pricing for a sustainable poker ecosystem Quote
05-15-2015 , 11:23 PM
There's demand, so why lower/get rid of the rake?

It's just a business decision, with so much rake big sites are able to advertise and get enough players to play on their sites, and the site with more players will attract all the 16 tablings tards who will play anywhere that has enough traffic and then after a while they will complain about the rake because they saw the rake paid stat on PT4
Rake pricing for a sustainable poker ecosystem Quote
05-15-2015 , 11:30 PM
Quote:
Originally Posted by everydaygrind
not as shocked as ppl that play all the time and 40+ table the **** and butcher the sheep.
how are multi-tablers be shocked with a membership fee?
Rake pricing for a sustainable poker ecosystem Quote
05-16-2015 , 12:15 AM
Quote:
Originally Posted by dzikijohnny
Think there have been other threads but, still don't understand it.
Yup, and so I've merged this into one of those threads where you probably should have posted this - or better yet, have read and found the answer yourself.

Quote:
Originally Posted by dzikijohnny
World of Warcraft etc. doesn't rake.
Neither does Netflix or Office365. How is this relevant?

Quote:
Originally Posted by dzikijohnny
How come nobody set up a combo ClubWPT with some kind of per hundred hand charge/hourly charge. I am sure there is a reason. Just want someone smarter than me to explain it to me.
Because:

Quote:
Originally Posted by SrslySirius
If you replaced rake with an equivalent membership fee, imagine how shocked recreational players would be at the price.
Quote:
Originally Posted by Bill_Clinton
Quote:
Originally Posted by everydaygrind
not as shocked as ppl that play all the time and 40+ table the **** and butcher the sheep.
how are multi-tablers be shocked with a membership fee?
At an equivalent fee? I'm confident you can work that one out.

Quote:
Originally Posted by pipes
I always wondered if there was a win/win situation based upon a lower rake but then add ad revenue. For example, the tables have ads. Why not run commercials during tournament breaks lol. If the rake is lower, more players will play, and that will bring more sponsors willing to pay more.

Badugi could be sponsored by Skittles. Taste the rainbow!
No. Any advertising revenue would be a drop in the bucket, and the annoyance level from the ads would far outweigh any benefit from the slightly lowered rake.
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05-16-2015 , 12:55 AM
we so confident that considering some combination of the following changes to the status quo isnt desirable for all parties?

lowering the amt of winrate removed by rake per hand/tournament especially at the stakes hit hardest by current pricing
charging a fee for cashouts in excess of deposits in any number of potential pricing structures
having online poker still exist in 10 years in any similar form (trustworthy secure sites with large player bases)

borg is a life fish, who will call me entitled, for feeling entitled to think outside the sinking ship
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05-16-2015 , 01:25 AM
actually i'm not remotely a life fish and im the one who thinks outside the box and years ago was telling fools like you that all this mass multitabling software etc was a terrible idea and short sighted greed by the players.

i'm fortunate to be able to make money from a game-but if it wasn't possible for people running the games to make money in the prcoess, and lots of it the game wouldn't exist on the scale it does.

i guess if you wanna say you think outside the box because you fall in line with a bunch of other people who say "derp derp gimme rake free poker" have at it. while rake free
poker (or a tiny monthly membership fee) filled with fish would me amazing i live in reality and realize there is no shot of that ever happening and why.

maybe you can do to the BFI forum on here and suggest you're new great business plan with no rent, product cost etc and think outside the box some more.

the whole world of warcraft analogy is so unbelievably bad it does not surprise me that you think it's valid.

you are right in that the ship is sinking- and it's primarily the fault of the players and us gov't.

Last edited by borg23; 05-16-2015 at 01:32 AM.
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05-16-2015 , 01:52 AM
Sites make more guaranteed short-term money by butchering online poker by combine-harvesting through new players rather than sustain a healthy poker ecosystem with happy returning customers.

My OP was an attempt to show how the games get exponentially better/healthier with each small adjustment to rake. My graphs in the OP clearly show halfing the rake makes the difference between nearly everyone losing constantly and long-dillusional-swings over many months.

Unfortunately with factors like International Law, improving AI bots, high skill barriers for beginners and the prevelance of rec-unfriendly software, I've got to say the sites are making the correct move of slaughtering the game instead of sheering.

Admittedly with the amount of egg-heads, passionate players and money flying around in this community I am really surprised after 20 years no one has come close to a solution for a workable open-source community poker site.

Bring on the doom and gloom comments "no rake sites never worked" etc, but there's a f*** load of open source and free to use projects running well on far more brains and investment than a poker site would be to run.

Why not make the battlefield free and sell weapons hmmmm? The game and industry would last much longer.
Rake pricing for a sustainable poker ecosystem Quote
05-16-2015 , 03:43 AM
Quote:
Originally Posted by pipes
Badugi could be sponsored by Skittles. Taste the rainbow!
lol nice.
Rake pricing for a sustainable poker ecosystem Quote
05-16-2015 , 03:56 AM
Brick and mortar casinos are too greedy and shortsighted to find the sweet spot in rake pricing that balances long term population growth of players with maximum profit. Such a price exists, but it's far less than the absurd prices charged today.

To any management that might read this... please at least consider lowering the price for your smallest stakes games so that new players have a chance to get lucky and win a few times, which, whether you know it or not is required to create long term poker players. Look at it as a 'loss leader'. You settle for less in this important beginner population in order to create more profit long term. The situation today is that the smallest stakes games are the most difficult to beat due to dramatically higher rake, and you are shedding new customers like never before.

Last edited by Uh*Oh; 05-16-2015 at 04:03 AM.
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05-17-2015 , 11:52 AM
Quote:
Originally Posted by POW
I think it’s 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

...

[W]hen >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

I’m not suggesting sites cut their prices by 85% but 1 look at these graphs and it’s 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 I’m not 100% sure sites give a fudge because their bottom lines for this year look great, and if poker could’ve taken off as a mainstream sport, they’d never know.

Thoughts? Actions? Picket signs?

Quote:
Originally Posted by POW
Sites make more guaranteed short-term money by butchering online poker by combine-harvesting through new players rather than sustain a healthy poker ecosystem with happy returning customers.

My OP was an attempt to show how the games get exponentially better/healthier with each small adjustment to rake. My graphs in the OP clearly show halfing the rake makes the difference between nearly everyone losing constantly and long-dillusional-swings over many months.

Unfortunately with factors like International Law, improving AI bots, high skill barriers for beginners and the prevelance of rec-unfriendly software, I've got to say the sites are making the correct move of slaughtering the game instead of sheering.

Amaya seems to maybe be in the business of buying up companies, rather than trying to work on the ones it already has, you think? Sort of like a real estate investor/flipper, minus the renovations? Like, guess they're hoping the money'll come from:
  • established companies growing over time (investing)
  • selling the company for a profit (flipping)
  • being able to buy up more of the above, by keeping the valuation of the company in the present-day as high as possible?

It kind of seems like maybe Amaya's decided that what benefits the company the most is to keep the income stream in the present as high as possible, to make it easier for them to buy up more companies? Unfortunately
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05-17-2015 , 02:18 PM
I always thought the rake should be significantly less playing online. If the can run a tournament with 10c fee at the same quality as the run tournament with a $15 fee. Espiasally when you see some of the nose bleed sng's. paying $50, $100 fee to play a game online seems a little crazy. Wasn't bad when sites actually had good promos and RB% but now most the rake just gets pocketed, which nobody blames them. Supply and demand I guess. They just need a walmart type site to come along and raise the bar.
Rake pricing for a sustainable poker ecosystem Quote
05-18-2015 , 07:33 PM
Quote:
Originally Posted by borg23
im the one who thinks outside the box and years ago
maybe years ago you came to the same conclusions i did about the long term impact of players focusing on SNE/RB and if thats true, kudos, because we were right.


but whoever you used to see yourself as, now you're effectively just a shill for the status quo.

you have never raised any potential positive changes in any of your numerous rants. you only advise tolerating the way things are.

and if there's a counterexample i bet it would take you a long time to find it, and you're you
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05-19-2015 , 01:33 AM
Quote:
Originally Posted by TrustySam
Amaya seems to maybe be in the business of buying up companies, rather than trying to work on the ones it already has, you think? Sort of like a real estate investor/flipper, minus the renovations? Like, guess they're hoping the money'll come from:
  • established companies growing over time (investing)
  • selling the company for a profit (flipping)
  • being able to buy up more of the above, by keeping the valuation of the company in the present-day as high as possible?

It kind of seems like maybe Amaya's decided that what benefits the company the most is to keep the income stream in the present as high as possible, to make it easier for them to buy up more companies? Unfortunately
But they have already run Ongame into the ground so they don't have skills in keeping revenue high.

The skill they have is that they seem to be the finance industry golden boys who are able to get the backing to put deals together.
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05-19-2015 , 05:15 PM
Yeah, something like that ... or exactly like that, I guess

I sold my stock in Amaya - in Canada, there's an option to set aside a bit of money every year into a retirement fund, which can be used as a tax deduction, so there's lots of advantages to putting aside a bit every year into this fund. And then also after that, any trades that would usually be taxed are tax-free - so like, even without a lot of $ in the fund, there's still an opportunity there for everybody to invest their nest eggs in whatever seems promising with the returns.

Thought Amaya seemed kind of interesting at first, because there was that chance to stay on top of all the stuff that happens on the site, and stuff. But every day the talk of poker dying gets more intense, and yet Amaya seems to keep taking on more debt to buy more companies ... it was starting make me nervous! Like wonder if maybe on paper PokerStars' future looks a lot different to those who have been playing on the site or something? And then what would happen if poker were to start shrinking in popularity a lot faster than projected based on past history or something :/

I don't know - maybe there's value to be had there with the way the company's going, but it just seemed less risky to go with Apple? And guess there's always the chance things could get worse if they tried lower rake, who knows for sure ...

My iPad's fun. Also, guess investing could be an interesting kind of a 'hobby' with +EV potential - wish there were more $ than cents in my 'retirement fund' to work with lol
Rake pricing for a sustainable poker ecosystem Quote
05-21-2015 , 12:47 AM
Quote:
Originally Posted by POW
Sites make more guaranteed short-term money by butchering online poker by combine-harvesting through new players rather than sustain a healthy poker ecosystem with happy returning customers.

My OP was an attempt to show how the games get exponentially better/healthier with each small adjustment to rake. My graphs in the OP clearly show halfing the rake makes the difference between nearly everyone losing constantly and long-dillusional-swings over many months.

Unfortunately with factors like International Law, improving AI bots, high skill barriers for beginners and the prevelance of rec-unfriendly software, I've got to say the sites are making the correct move of slaughtering the game instead of sheering.

Admittedly with the amount of egg-heads, passionate players and money flying around in this community I am really surprised after 20 years no one has come close to a solution for a workable open-source community poker site.

Bring on the doom and gloom comments "no rake sites never worked" etc, but there's a f*** load of open source and free to use projects running well on far more brains and investment than a poker site would be to run.

Why not make the battlefield free and sell weapons hmmmm? The game and industry would last much longer.
POW, first off I think you are right that sites kind off exploit the industry. This is pretty effective in most markets. Sites have found a way of getting all the money almost that goes into this industry. So the strategy is pretty much this: get as many customers and then get all their money. Poker sites are casinos.

2. I think we must exercise a bit of patience. I think there is a solution out there to change the business model that is less exploitative and yet more profitable for the sites because more valuable for the player and thus allows much more money to flow into the industry. Hence sites can make more $$ even though they would get less of a %age because more money flows overall.

But all that said, I am just as baffled by the fact that nobody is actually competing with the status quo by creating a new product. I.e. the way Apple entered the phone marked by completely changing what the product "cell phone" does.

I believe in poker this means changing online poker from being a casino game to being a skill game.

But until a true competitor to the industry emerges there is no reason for the industry to adjust and instead just pick up all the moneys.
Rake pricing for a sustainable poker ecosystem Quote
05-21-2015 , 02:41 AM
Quote:
Originally Posted by knircky
POW, first off I think you are right that sites kind off exploit the industry. This is pretty effective in most markets. Sites have found a way of getting all the money almost that goes into this industry. So the strategy is pretty much this: get as many customers and then get all their money. Poker sites are casinos.

2. I think we must exercise a bit of patience. I think there is a solution out there to change the business model that is less exploitative and yet more profitable for the sites because more valuable for the player and thus allows much more money to flow into the industry. Hence sites can make more $$ even though they would get less of a %age because more money flows overall.

But all that said, I am just as baffled by the fact that nobody is actually competing with the status quo by creating a new product. I.e. the way Apple entered the phone marked by completely changing what the product "cell phone" does.

I believe in poker this means changing online poker from being a casino game to being a skill game.

But until a true competitor to the industry emerges there is no reason for the industry to adjust and instead just pick up all the moneys.
Poker needs an old pickup truck driving Sam Walton, someone who will come in with the true intention of lowering prices and be dedicated to it, make it their lifes mission. That guy could potentially take over the market.

The shell game wall st slicksters like Amaya are ultimately bad for the industry because they don't really care about it. Speaking of iphones, someone linked to a great video of steve jobs in another thread



Amaya aren't even marketing people, they're big money deal addict street hustlers and wealth extraction specialists who probably think passion is something you get from coke, trophy wives and gaudy overpriced artwork.
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05-22-2015 , 12:38 AM
Quote:
Originally Posted by JudgeHoldem1848


Assuming Casinos are using legal frameworks to create monopolies and regulatory capture than this is quite relevant to our industry.
Rake pricing for a sustainable poker ecosystem Quote
05-22-2015 , 11:37 AM
Quote:
Originally Posted by knircky
... this is quite relevant to our industry.
fyp
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05-22-2015 , 12:22 PM
Quote:
Originally Posted by knircky
I believe in poker this means changing online poker from being a casino game to being a skill game.
So, instead of an online casino, maybe start a site that focuses on people playing skill games for money against each other. The argument that poker is a skill game might be stronger if you can play poker or chess vs if you can play poker or slots at a site.
Rake pricing for a sustainable poker ecosystem Quote
05-22-2015 , 01:54 PM
Quote:
Originally Posted by AsianNit
So, instead of an online casino, maybe start a site that focuses on people playing skill games for money against each other. The argument that poker is a skill game might be stronger if you can play poker or chess vs if you can play poker or slots at a site.
yes that's a great thought.

However I think the effective rake needs to be closer to 10-30% vs the 50%-100% we have today in online cash games, before marketing aspects can be effective.

I.e. if a site like stars makes 500M a year in rake, we should have a few billions in winnings as well in order for the industry to become healthy again.

That said poker being a casino game, where the purpose is to get people to lose all of their money is certainly a great business model for the casino industry as long as new customers can be attracted.

the industry is focused on the later model today, thru regulatory capture (only existing casinos may get licenses, licenses are expensive and get distributed by choice) that create monopolies. A good example are the markets in NJ and NV, which are actually pretty healthy but so heavily raked that they seem to be shrinking.
Rake pricing for a sustainable poker ecosystem Quote
05-26-2015 , 12:21 PM
I have been debating Unibet's rake and reward model in the official thread with UnibetAndrew:

http://forumserver.twoplustwo.com/28...hread-1452899/

Decided not to derail that support thread any more than necessary so will make future replies here instead.
Rake pricing for a sustainable poker ecosystem Quote
05-26-2015 , 01:23 PM
Quote:
Originally Posted by POW
I have been debating Unibet's rake and reward model in the official thread with UnibetAndrew:

http://forumserver.twoplustwo.com/28...hread-1452899/

Decided not to derail that support thread any more than necessary so will make future replies here instead.
Quote:
Originally Posted by jalfrezi
It's telling that you're still avoiding the most obvious and financially important difference between playing at Unibet and PS, which is the softness of the NL games, and are obsessed with rakeback, all of which makes me question your true intentions.
Game softness is relative, so is irrelevant when discussing what a healthy amount of money to be removed from games by the sites is. Unibet does however have smaller skill gaps because they have taken away possible player edges by banning HUDs, making SNGs short-staked and fast, player anonymity, no hand tracking etc. This is great because bad players lose less money to good players, however Unibet pocket this difference in rake. Well played Unibet!

Quote:
Originally Posted by Keruli
Well, I rake a lot on Unibet and I don't get much less than I would from stars, if at all(but i don't rake at SNE level, and don't want to). So POW's claim is false.
Please point out the point on this graph where you rake a lot AND receive rewards not much less than Stars. Also bare in mind that at 10000 euros raked, around 1/3 of your reward value is a single ticket to a live donkament.



Quote:
Why is it that you don't reply to any of my points? For example, difficulty of the games, value of missions, looking at any points in the payout scale asides from the absolute lowest point, etc. It's because you don't have any good responses.
Difficulty of games, see my reply to jalfrezi above.

Mission values are small, fixed values. So make up very little of the rewards for players who play higher stakes and/or regularly.

I focus on the 75e-1000e/month rake part of your scale because you reward a these players a very uncompetitive rate (9-14%), and my experience tells me that of the players taking a decent interest in poker , nearly all of them will fall into this bracket. I think you know this, and set you lowest rewards accordingly.

Quote:
We pay out more in total bonus spend than PS do
Iím sorry but this is just rubbish. Even plugging in a player distribution into my model* with 85% of your players raking less than 50e still shows your total payments to be 77% of what Stars would pay in rewards. Plug in any other regular distribution of players and your site generally pays 65% of what Stars would pay.


*Model showing fixed reward schemes for Unibet, Stars and Test, where no. of players can be altered to see the affect of total rackeback paid by each site. Results are below:

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05-26-2015 , 01:48 PM
Christ, now I have to post here too, thanks....

I remember you from this thread now. And I remember why I stopped posting here, so I'll keep this brief.

Long story short, POW made up a model with imaginary inputs to give an outcome that he already wanted in advance, then spent a weekend derailing another thread with it.

Our aim is to spend (much) more on the lower end than any other site, about the same on the top end and less in the middle. This is to keep new and casual players alive for longer. This makes the games softer and stops them from failing. We spend as much money on our loyalty scheme as we ever did on MPN with a more traditional model. We spend more on overall promos than PS do, at least from when I last heard about their numbers (from an ex FP&A guy there, though I worked there for 7 years too).

Quote:
Originally Posted by POW
Game softness is relative, so is irrelevant when discussing what a healthy amount of money to be removed from games by the sites is.
Depends what you spend the money on, and we're spending it on keeping the games softer.

Quote:
Originally Posted by POW
Unibet does however have smaller skill gaps because they have taken away possible player edges by banning HUDs, making SNGs short-staked and fast, player anonymity, no hand tracking etc. This is great because bad players lose less money to good players
And also that we aim our promos and loyalty scheme at low end players. Which you don't seem to take into account at any point.

Quote:
Originally Posted by POW
I’m sorry but this is just rubbish. Even plugging in a player distribution into my model* with 85% of your players raking less than 50e
This shows just how little you know about site ecology. Significantly fewer than 15% of our players rake > €50 per month. This is going to be the case at PokerStars too.

And if anyone is wondering why I'm abrupt with POW it's because he keeps posting this stuff again and again even when I tell him about real world data. And these are data I shouldn't really reveal - it's commercially sensitive. He also then just says I'm lying and accuses me of constant dishonesty.

Your RB% numbers for our site are wrong at literally every point. It's so wrong that I can't even tell what you did to mess it up. So let's just leave it there shall we? I don't want to spend my working days refuting this stuff, it's a waste of my time and you aren't learning from what I'm posting anyway, you just plod on, ignoring it all.

Last edited by UnibetAndrew; 05-26-2015 at 01:54 PM.
Rake pricing for a sustainable poker ecosystem Quote
05-26-2015 , 03:51 PM
Quote:
Originally Posted by POW
Quote:
Originally Posted by jalfrezi
It's telling that you're still avoiding the most obvious and financially important difference between playing at Unibet and PS, which is the softness of the NL games
Game softness is relative
Yes, relative between different sites like the two examples I gave ie the ones you're keen to compare.

Quote:
Originally Posted by POW
Unibet does however have smaller skill gaps because they have taken away possible player edges by banning HUDs, making SNGs short-staked and fast, player anonymity, no hand tracking etc. This is great because bad players lose less money to good players, however Unibet pocket this difference in rake. Well played Unibet!
This is too simplistic because you're ignoring the ratio of good players to bad players. The point is that the difference in profits that stems from a lower ratio of good to bad players more than offsets the higher rake.

Last edited by jalfrezi; 05-26-2015 at 03:56 PM. Reason: clarity
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05-26-2015 , 10:11 PM
Quote:
Originally Posted by UnibetAndrew
Christ, now I have to post here too, thanks....

I remember you from this thread now. And I remember why I stopped posting here, so I'll keep this brief.

Long story short, POW made up a model with imaginary inputs to give an outcome that he already wanted in advance, then spent a weekend derailing another thread with it.

Our aim is to spend (much) more on the lower end than any other site, about the same on the top end and less in the middle. This is to keep new and casual players alive for longer. This makes the games softer and stops them from failing. We spend as much money on our loyalty scheme as we ever did on MPN with a more traditional model. We spend more on overall promos than PS do, at least from when I last heard about their numbers (from an ex FP&A guy there, though I worked there for 7 years too).



Depends what you spend the money on, and we're spending it on keeping the games softer.



And also that we aim our promos and loyalty scheme at low end players. Which you don't seem to take into account at any point.



This shows just how little you know about site ecology. Significantly fewer than 15% of our players rake > Ä50 per month. This is going to be the case at PokerStars too.

And if anyone is wondering why I'm abrupt with POW it's because he keeps posting this stuff again and again even when I tell him about real world data. And these are data I shouldn't really reveal - it's commercially sensitive. He also then just says I'm lying and accuses me of constant dishonesty.

Your RB% numbers for our site are wrong at literally every point. It's so wrong that I can't even tell what you did to mess it up. So let's just leave it there shall we? I don't want to spend my working days refuting this stuff, it's a waste of my time and you aren't learning from what I'm posting anyway, you just plod on, ignoring it all.
I moved my posts here out of respect for your support thread.

If your only replies are 'your data is wrong' without giving any evidence or 'correct' data to the contrary, then I guess we're at an impass with the discussion.

Time will tell if your model works, but considering the only group of players who should care about rake price prefer to remain in ignorance, I'm going to predict Unibet will eventually play it's part in the decline of online poker through over-raking.

Hope I'm wrong, and thanks for atleast replying
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