(This is only about cash)

Howdy, I have been having conversations with my fellow pros for a while about my extremely pessimistic viewpoint on the future of western pro’s in online poker, and figured I would write something up and share it here.

I can’t remember the last time I heard good news about online poker. It got me thinking about the future, and most of what I thought about was negative. The share of deposited money going to grinders seems to be getting lower every year. Stars increased their rake, sites have been slowly changing to Euro’s which is also a rake increase, and lots of networks are adopting “essence” style models. There is also more and more regulation, which is almost always a bad thing. Poker is just a stupid little card game, and all these increases in fee’s directly affect the outcome, something that is unique amongst games. Already so much is taken out that at all stakes below 10/20~ to significantly warp the outcome. At 2/4 for example at a 6-max table the average player pays around 3.5bb/100 in rake. That’s an incredible amount of bb’s**, someone at that table has to be extremely bad to allow winners, and that level of rake is vastly lower than what people at micro stakes pay. A lot of unhappy players on 2p2 take exception to the amount of table selection that takes place, but unfortunately it’s essential. If I had the option I would play in significantly tougher lineups than I do now, however there is no way I can tell myself I’m 4bb/100 better than my opponents at all reg tables, whereas if the rake was 1-1.5 it’s possible that quite a few pro’s could believe they have a big enough edge to play together. That’s why the only time you see 6 informed players all playing each other is at 10/20+, at lower stakes there is always at least 1 person per table who is not informed. Personally this is one of my biggest issues with online poker, I can’t think it has a great future when the fee’s are so high it forces the action to revolve around a group of players who don’t understand how bad they are. I can’t think of any other sport that operates based on burning new players like that, and I view it as one of the big reasons as to poker’s decline. Poker is portrayed as a skill game, and it is, however the enormous amount of money taken out in fee’s is a hurdle that no other sport/game has, and the players it currently needs to continue are those who get the worst experience.


The rake is so high because it’s not a factor that the important players care about, in fact it’s almost the opposite as the higher the rake is the more the site can offer in rewards. That plus the lack of competition in the industry are large reasons the rake is so high, and likely to remain so. On top of that there has been more and more regulation, which due to the lack of competition the cost of which has been passed almost completely on to the customer in a lot of cases. I think it would be very interesting to see if a site could thrive with way lower rake, with an image promoting poker as a competitive game, however with the extreme uncertainty in the industry’s future (Bots and decreasing player numbers) no one sane is willing to invest the enormous amount of money that would be required to build software and more importantly promote enough to generate the liquidity to compete. The current sites won’t do it, as they would instantly be cutting their revenue by a large % with no guarantee that there would be a huge increase in volume, and if there was a large increase in volume their costs would go up. If for some reason a site does significantly lower the rake, it’s likely in a few years, when online is even more competitive, that someone else would be making a big post about how the rake is to high.

I think we will see the trend of increasing rake continue. I spent a few hours on Russian PTR a couple days ago, and there seemed to be very few true breakeven players left. I made a little graph to illustrate how I believe the current group of players playing midstakes looks like.



*The x axis is bb/100 with the subjects on the left losing 30-50 and the subjects on the right being winner, with the large peak at 2bb/100


With a player distribution that looks like that, rake increases funnel more money to the site from the pro’s without many side effects. They will make a negligible difference to recreational player’s lose rate. At lower stakes or a few years ago there were a lot more breakeven semi-serious players who would have been turned into losers, and it would have had a larger effect. However the high rake has chased away most of those players, and at 1/2+ I believe has made an environment where rake increases are more likely. This leads to why I think the Western pro is going away. Sites do need grinders, but there is a huge pool of eastern europeans who are happy making a fraction of what western pros need to survive, and I can’t think of a good reason why sites should keep the rake at a low enough level to allow a western level of income. These days there are very few new western pros entering poker. A few months ago I was playing a fair bit of 1/2 and almost all the new faces were from eastern europe, as the amount of work required to make a living wage for western europeans is so high as to dissuade everyone but those with some extreme motivation from pursuing online poker.

In my view there is a really bleak outlook for western grinders. For the past few years the average stake played has been decreasing, and the amount of players has been decreasing as well. On top of that people are getting better and better, yet the rake is increasing instead of decreasing. I heard a few years ago that Pokerstars captured in rake 95% of money deposited to play 1/2 with, I can only imagine what that % is now. There is nothing good that I can see on the horizon, just pokersites capturing ever increasing amounts of the deposits and tougher competition every day.


** The rake really is insane, the amount that is taken out to run the game is way higher than most people realize, and has a really large effect on the outcome of the game at almost any stake. I would compare HU rake at 1/2nl (7-8bbs/100) to taking 3ish goals from each team in an NHL game.

You mean it has no effect whatsoever on the outcome?

Cliffs: Another online poker is dying/dead thread

Sadly its all true

Howdy,

Agreed.

Mmmmmmyowdy +1

Who could have known that taking 5% of every pot would turn out to be an enormous hurdle to people winning?

For Zoom, if you go to "Players" in Holdem Manager you can very easily figure out reg winrates and see that they are not doing well at all. For nl100 zoom they are losing like -$1.8/100 hands pre-rakeback.

Supernova Elite is like $3/100 hands by comparison...

Cliffs: Amaya owes me a living wage and they are not providing it.

Your viewpoint is extremely realistic.

There is a price to pay for regulated internet poker. The price is not trivial. It changes the nature of the game. The best predictor of the direction and magnitude of the change is government regulated lotteries. Of the 43 states that run lotteries, the average payout is just under 60% of the revenue dollars collected.

If you are looking for a site with low rake and a high number of recreational players, it does not exist. You could use your influence to attract players to a low-rake site that is almost free from government taxation and withdrawal expenses. Waiting for Stars to lower rake is unlikely to be productive.

If there is some additional incentive that would prompt you and your associates to vote with your feet, speak now.

Had to look that up - is this description more or less accurate?

http://www.pokerhistory.eu/history/m...ongame-essence


Wonder if it would better work for Stars, with their larger player pool, to try voluntarily segregating some tables for markets with the most fish (eg UK, Australia), rather than looking for ways to 'punish' winners - although segregation might wind up being unfair, so that wouldn't be ideal

Just can't imagine anything working where winning is punished - dunno, it just seems like it'd be destined to fail ...

I wouldnt even consider playing poker for a living if i'd come from a first world country, it's just not worth a trouble. Being a baller for 1-2k$/month in eastern europe is pretty nice, though.

Cost of living in Eastern Europe is increasing fast though, so a model based on that isn't sustainable long-term either.

There is competition from sites like Seals with Clubs which have a 2.5% rake which is capped at a very low number, making almost any game on the site beatable, even micro and nano stakes, even if you are only a half decent player. I know a guy who played freerolls (cost: literally zero, only time sunk) on there and carefully turned it into a 3BTC roll (roughly $1000USD at todays BTC prices).

But people have a resistance to Bitcoin when in actuality the ease and speed with you can transfer coins is unprecedented and ideal for poker, it completely sidesteps regulation, currency exchange and withdrawl fees, checks being delayed or lost, deposit/withdrawl limits etc. Its a perfect type of money for what we're doing.

We are seeing what a fully regulated and taxed fiat-currency based online poker world looks like, where players pools are isolated are shrinking, and increasing skill levels make for diminishing margins - and it isnt pretty. But people are resistant to change. They are hesitant to try new things, if not lazy, and if not ignorant about the benefits of cryptocurrency, often simply uneducated or misinformed. People would rather pay guaranteed insane fees and wait weeks for a small cashout than "risk" playing with a currency which could go down (or up!). Doesnt make sense to me but...

Go ahead with that Bovada/Carbon/Stars deposit. By all means. Good luck.

oh look this thread again

Another rake is killing online poker thread which is just rubbish. The Rake in NOT killing online poker.

The real reason online poker is dying is because the skill gap between regs and fish is becoming narrower and narrower each day either because of programs like HM2 or Notecaddy or thru knowledge being given away thru various means, coaching training sites, poker forums, coaching etc.

If rake was the issue, then live games would not be beatable with a rake structure that is far worse than online.

If rake was the issue, softer sites like Bovada/888 would not have much higher winrates across the board with a higher rake structure than a site like Stars.

Sit any mid stakes break even reg with his knowledge set in today's games in the games that ran 6-7 years ago with today's rake structure and that break even reg would be a 6bb+/100 winner.

If I could wave a magic wand which would raise the rake by 20% and place me back 8 years in time and it would allow me to play in the era where Party Poker was King I would snap that in an instant even with the 20% rake increase and so would any other reg

bitcoin is the answer

Just based on all the mother ****ing politicians and their regulations (unlikely to go away), crypto currency must be the way to move forward (unless something better appears). By the way, this is the first time i see this website and i will buy bitcoints for the first time ever so that i can play there.

But, the billion dollar question is, how can you remove any friction for somebody currently playing on stars (who is not as open minded as i am) to start playing at a site such as seals.

Why is it not possible to simply deposit money on this site as normal and receive bitcoins in return? I am guessing that it has to do with the availability of bitcoin and you would sort of have to run a buy/sell bitcoin platform and integrate a poker software to achieve this?

There are quite a few variables killing online poker. However, the point remains that poker players are bleeding an insane amount of money in rake in order to play poker. This market needs to be disrupted. The question is who will do it, how, and when.

This is wrong. It's just the standard misconception that every online grinder is blinded into believing. Rake is not killing online poker even though every online reg will argue it is.

The fact that such a minor increase in rake can have such a devastating effect on the game tells you that it's not rake that's killing the game but the way the game is played itself.

The fact is rake in online poker is minuscule compared to that in live poker and live poker is hugely profitable and can easily withstand increases in rake.

Online poker is dying because it's full of nut-peddling multi-tabling nits playing small pots. The games are dreadful and regs are deluded into thinking their best option is to 24 table NL50 and grind out some rakeback when one-tabling NL500 in a live scenario is so much softer and more profitable.

Oh but then there's the 'I'd kill myself if I had to play 25 hands an hour' mentality that online regs will scoff at because wow they can churn out 1500 hands an hour winning $2 pots.

And that's where online regs don't get it. Yes playing 25 hands an hour might be boring but it's the boredom factor that makes the game so profitable and online regs are too blinded by rake and rakeback that they don't even realise it. Boredom is the most essential ingredient in Poker and way way more critical than any rake you'll ever play. Games have to be boring but not in the way online poker is boring.

Boredom is what makes players play suboptimally. The slower the game the more suboptimally they'll play and the more profitable it will be.

I 24 tabled 6 million hands and 37,000 tournaments for 6 years before I realised what a ridiculous waste of time and effort it was.

Rakeback is irrelevant. Rake is an issue but not to the extent that online grinders will have you believe. Profit is all that matters and if you can make more playing 25 hands an hour, paying higher rake without getting rakeback then that's all that's relevant.

The only thing online poker has to be to be profitable is a simulation of live poker. It has to be slow, it has to he boring and it has to encourage people playing NL10 to play NL500 which is what they'd be doing in a live scenario .

Rake online should be increased not decreased so that it's profitable for companies to run online poker, microstakes should be abolished, tables should be capped at 2 or 3 max, rakeback and VIP programs should be abolished and the smallest game should be NL200.

I am not certain, but I believe it is related to survival of the site. They only deal in Bitcoins. They do not exchange Bitcoins for dollars or any other currency.

if the max sustainable winrate is 4 times the rate of rake, that player pool is likely to grow

if the max sustainable winrate is equal to the rate of rake, that player pool is not so likely to grow


would you rather be wal mart/shop at wal mart
or sell dodo birds/try to buy dodo birds

its not like there is no potential upside for stars to restructure rake, they just dont think its in their interests, and no corporation has ever made a mistake about the future of their industry, right

The only way i can see Online Poker coming back significantly is if the U.S.A makes a law that exempts it with Daily Fantasy Sports. .. Draft Kings and Fan Duel make so much god damn money it is ridiculous. They Rake anywhere from 10-15% on all stakes lower than 100$ and nothing lower than 5% rake on high stakes games. Those 2 sites are booming with traffic and tons of people just giving money away. Their are commercials every couple of minutes on the Sports Networks and they now are the main sponsors of NHL,NBA, and i think they signed a deal with MLB.

Now the problem with Sports is that they are only on so much during the year. and these sites are going to want something you can fill your time with in between games. Draft Kings already sponsors WSOP and they actually have satellites on the site to make the WSOP ME. Their Profits are already in the hundrends of Millions. This means they have the money to make Online Poker software and they have the traffic and user base to sustain it.

If Online Poker ever did get an exemption in the U.S like Daily Fantasy. I guarantee the DFS sites would offer Online Poker in a heart beat.

I know from reading your past posts that you have a "rake is killing the games mentality"

You quoted 2 arguments supporting why this is not the case and why such a small minuscule rake increase is not killing online poker and did nothing to contradict them or support evidence why the opposite (your view) is true.

No one is debating that if Pokerstars lowered the rake winrates would be higher and that it would go a long way to helping the longevity and sustainability of the games but that's not what this OP was about.

OP stated that rake is killing the games. Over the past 14 or so years that online poker has been around the rake increases have been minuscule and is not the reason that games are "unhealthy"

Several examples have been brought out to counter this argument and not one of them were addressed by you. If you want to have a discussion great, if you want to sidestep the issue you can always do that also.

I for one would welcome and gladly play in an online environment with a 25% rake increase over the current rates if the game quality was the same as it was in 2005, where the skill gap between reg vs reg and reg vs fish were much larger and programs like HM2/PT4 were not fully being utilized by the vast majority of regs and things like Notecaddy were not fully being utilized by regs which helped to widen the skill gap.

But back then, coaching sites were in there infancy, things like CR EV and notecaddy didn't exist. Poker Coaching was basically non-existent, there was no player segregation, the ratio of fish: regs was much better than it was today for several reasons, HM1 and PT were super simplistic programs compared to the versions run today. No sites allowed mass tabling. Party Poker was king and allowed 4 tables max unless you signed up and played on one of their skins and played on 2 accounts at once. Even PokerStars did not allow 24 tabling back then. Basically, nothing was done to help narrow the skill gap to the extent that is happening today.



Player segregation, coaching, advanced Hm2/PT4/Notecaddy/CREV, PokerStove tools, scandals scaring away fish, coaching sites, population explosions of forums, mass tabling regs such as this one are all contributing to the same thing:

The skill gap has been lowered considerably and edges are so much smaller, that is the reason why poker is dying, not the rake

I don't get why people say that bitcoin is the answer to the declining poker-ecosystem?

Bitcoin wouldn't solve the rake-fees, bitcoin-sites would have to generate revenue to ward off bots, maintain the site, provide customer-service etc, which would have to be from raked pots, or at least some alternative stream of income for the sites. I don't think commercials would cut it..

I think the only plausible solution would be to create more competion to the point where the rake would be forced to decrease dramatically. Lets be honest, the landscape of poker and rake-fees are really at a bad place and for any outsider it would have to be considered a rip-off. I mean does internet storage really cost 3.5bb/100. It seems like thievery to let sites take incredible amounts of money just to let you use their sites. And is it really fair for a company to leach off of their customers to generate billions in an activitythat is more and more being recognized as a skillbased sport. Me don't think so.

There should be a baseline fee you'd have to pay to play poker, whether it's 1-2,2-4 or 10-20 it shouldnt make a difference on the amount raked, because afterall its just virtual numbers being thrown around on a virtual platform and the rake caps for the various stakes definately don't level with actual cost of running them.

Rake online is far worse on average than live. That is at least the case in the US and CA where live games are thriving. In EU and Asia the rake sometime is pretty gross, but there is also no real poker economy happening.

Most people look at rake as what is charged per hand or time played in a casino. That however is actually irrelevant. What matters is how much is being lost vs raked. As that in turn will determined how much of the money that is lost is turned over to winning players.

Online I presume on average the amount raked effectively is 80% whereas live it is only around 20%.

Online this varies a lot for the stakes and games. While the high limit games have pretty low rake the low limit games such as 1/2 and below have very high rake and games below 50NL are simply unbeatable with rake being close to 90%. In PLO its even worse.

Online poker is simply considered a casino game for the sites. The purpose of casino games is to find a way of taking away all of the money from the players via ODDs that can't be beaten. This is true for poker as much as for a slot machine. If you listen to Adelson, you can see precisely how a casino owner looks at poker and why there is not much of a difference.

While players believe poker is a skill game, it is not considered as such for the casino. And in fact the game is designed in a way that for 90% of players there is not much of a difference between a slot machine and poker.

The solution is to simply not play online cash, unless you want to play higher where the rake is low.

I assume players like "TheFunBegins" either don't play at levels most players play or are simply losing players and have never looked at their rake stats over a decent sample size.

Some people also are just fine with being raped financially :-) There is even a fetish for it as far as I know.

For most players however i believe the issue is simply that they don't understand the way rake works and how much it actually affects their chances of winning.

So don't play cash online (below 400NL). Play tournaments the rake there is totally reasonable.