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Old 04-28-2015, 10:55 PM   #1
napsus
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View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Hi Daniel,

As you know PLO is the new NLHE for online cash games and the ecology of PLO is something that not only the community but also the operators should protect to avoid killing the potential new golden goose. This thread is designed to provide you with more detailed and accurate information on the rake issue so you hopefully can consult PokerStars to make some changes.

Quote:
Originally Posted by DNegs View Post
All I can tell you is that I am well aware of the cancer that is seat scripting and the rake challenges PLO players face.
You mentioned on the Joe Ingram podcast that you could look into the PLO rake issue, which has been a major concern for PLO players over past few years. The reason for concern first of all that PLO players pay significantly higher rake in bb/100 compared to the NLHE players, data shows that the bb/100 rake is more than double at micro stakes PLO compared to respective NLHE game. As we all know, the structure of a pot limit game with closer equities preflop will play different than a much tighter no limit game. Therefore I believe it should not be raked under the same rake system when the end result for the players is so unreasonable.

On top of that the PLO games are getting tougher through natural evolution of the game, hopefully it does not have the same fate as online Limit Hold’em... There are also less recreational players per regular in the Zoom games and thus winrates are getting smaller or even negative (as one of the threads linked below shows) in those games. The introduction of fast-fold poker, Zoom, had a significant negative effect on winrates. At regular tables there usually 1 recreational player for 5 pros, at Zoom pools it’s often 1 recreational player for 10-20 pro entries. It seems natural to me that when the poker operator offers a game with smaller chance of winning due to less attractive recreational/pro ratio that the operator would also take a smaller cut of the profit before the game completely dies. In some of the smaller games it’s close to impossible to win pre-rakeback unless you are a mid- or high stakes grinder who drops down to play small stakes.

It would be great if such a strong poker ambassador as yourself who also happens to be close to Pokerstars would take this matter into your heart and first educate yourself on the subject and then discuss it with PokerStars. The issue has been brought up at the PokerStars and players meetings continuously without real changes even there has been some focus on the PLO rake and small improvements have happened over time. In the end the online cash games would need help from someone like you or the TwoPlusTwo owners to push the subject further.


Issue: PLO has an unfair rake structure compared to NLHE.

Question: How can it not be fair to tax NLHE and PLO the same amount in bb/100? Other games have different rake structures.

Solution: Add rewards trough higher VPP ratio in PLO specific or lower the rake (directly or via a new rake method) so that both games (PLO and NLHE) have the same average rake in bb/100 across the stakes.


There has been a number of threads started on TwoPlusTwo regarding these issues, please find some of them below

Rake analysis between PLO & NLHE incl. Zoom

Petition - PokerStars: Lower the price of PLO Zoom

Pokerstars Profits Hugely at Expense of Players - Important for all Poker Players to Act Now


This quote from Pokerscout shows how hard they are raking PLO games vs NLHE:

Quote:
Thanks to its gigantic and diversified player base, top online poker provider PokerStars is able to spread more games at a wider variety of stakes than any other operator in the world. Which of those games and stakes generate the most revenue for the site, and how does that list compare to the most popular games by player count?

The five highest grossing games on PokerStars are all of the fast-fold variety. This isn't entirely surprising, as fast-fold formats generally average upwards of 200 hands per hour, more than twice that of a regular table.

More unexpected is that one of the site’s highest revenue generators is a PLO game. Considering the low popularity of Omaha relative to Hold’em, the fact that fast-fold $1/$2 PLO made the top five is a testament to both the power of the fast-fold effect, and the tendency of Omaha games to produce massive pots. In general, PokerStars reaps the most profit from its mid-stakes games, where high average pots intersect with decent traffic levels.
As you browse these threads I’m sure you’ll quickly realize that it’s very hard a micro/small stakes grinder to eek out a profit from these games, even with the VIP rewards.

There have also been talks about why recreationals have trouble beating or at least not getting slaughtered in online poker recently.

Here's an excellent post from Sauce from another thread where these issues are currently being discussed:
(What Happened to Sklansky and the IGaming North America Conference)


Quote:
Originally Posted by sauce123 View Post
The crucial point that gets missed in these rake discussions is that the health of the games and the rake taken are dependent, NOT independent. The amount of rake taken in bb/100 seems to be the single biggest factor influencing game health. I appeal to an intuitive argument for this point; if (in a zero rake environment) winrates fall roughly around a normal distribution (or some other distribution of your choice), with the peak being at 0bb/100, then picture a line on this distribution where the rake is set, say 10bb/100. The portion of the curve above the rake line will be the winners. Currently, the rake is 10+bb/100 at low stakes, and so only a tiny fraction of "giant" winners are beating the games.

PokerStars makes the claim that the rake has stayed relatively constant throughout the history of online poker (Zoom notwithstanding), and then makes the hand wavy argument that the current poor game conditions can't be caused by current "high" rake because rake was always as high as it is now. It's true that rake has always been high, but the conclusion doesn't follow. What Stars' argument misses is that if the rake was set at a lower level in the Boom era, then games might have been even better during the Boom era, and good (or at least better) game conditions might have lasted far longer. The great games from the boom era should be explained by the massive influx of new players and the lower skill disparity between professionals and recs, which allowed games to thrive even in a high rake environment. I don't think PokerStars has ever addressed why a Boom era rake level will be sustainable in a more competitive poker economy.

Stars makes an additional argument that continued high rake is necessary in order for Stars to invest in ways to improve the poker economy, notably by attracting new players and pushing for legalization/regulation throughout the world. There's certainly some truth to this, and we as pros should realize that in many respects Stars' interests coincide with our own, and some sizable fraction of the money raked by Stars gets reinvested into our business via Stars' efforts at marketing poker. PokerStars Michael J summarizes this view here (https://forumserver.twoplustwo.com/sh...75&postcount=1).

I disagree that Stars' efforts towards marketing and legalization can fully justify the current rake being charged. It appears that Amaya is "operating on a a profit margin of approximately 38 percent after taxes and operational expenses"
http://www.cardschat.com/news/amaya-...#ixzz3YQmXcc00
which I think shows that Amaya is operating at an excellent short term profit even while spending money on player acquisition and pushing for regulation.

Summing up, poker is a negative sum game, and the magnitude of the negative sum is determined by how much rake is taken. It's silly to argue about qualitative reasons why games are getting tougher when a quantitative one is staring us right in the face. Stars' twin justifications for high rake, (1) 'that high rake doesn't cause poor games because rake has always been high and games used to be better', and (2) 'that current high rake is necessary to attract new players and help fund Amaya's efforts to re-create good game conditions' do not tell the whole story. The simplest way to make games better over time is to lower the rake.


Here is a summarized table on what different players pay in rake on smaller stakes:



...and the lower you go, the worse it gets.

Daniel, I urge you to use your position at the top of the poker world to help fix the PLO rake issue and thus help the poker community and countless poker players, recretional and professionals alike. That would be a great act of good will from PokerStars to protect the longevity of the games and something that we would all be thankful to you for.

Last edited by napsus; 04-28-2015 at 11:01 PM.
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Old 04-29-2015, 01:09 AM   #2
DNegs
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Totally on board and have been for some time on this issue. Coincidentally I have a meeting later today and was already planning on bringing this issue up again. Obviously I can't make any promises since I don't have the power to make these decisions, but I can promise you that I will do my best to make a case for an adjustment here. Thanks for the additional summary showing the rake differences between NLHE. I will log that and bring it to the meeting.
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Old 04-29-2015, 01:38 AM   #3
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

A Very well written post OP post, 1 off the best I seen. Thanks
GL Dnegs GO GET AT THEM
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Old 04-29-2015, 02:11 AM   #4
Farina
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Wow that's insane, I've never seen the actual numbers.

Edit: Staying away from PLO from now on, lol..
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Old 04-29-2015, 02:50 AM   #5
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

+1 to Napsus. well said.
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Old 04-29-2015, 02:53 AM   #6
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Very well written and informative OP and a nice post by sauce.

But I have no idea why your asking DNegs to go to bat for the PLO community. He has stated after the recent rake hike (which was later reversed) that a rake hike is a good thing and if he were the decision maker it would be even worse for winning players.
He is not a friend of players that struggle day in and day out just to grind a living playing online poker.
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Old 04-29-2015, 03:11 AM   #7
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Quote:
Originally Posted by Sect7G View Post
Very well written and informative OP and a nice post by sauce.

But I have no idea why your asking DNegs to go to bat for the PLO community. He has stated after the recent rake hike (which was later reversed) that a rake hike is a good thing and if he were the decision maker it would be even worse for winning players.
He is not a friend of players that struggle day in and day out just to grind a living playing online poker.
This is simply not true. I did say that it's possible that the best players increase their win rate, but not that it was a "good thing" for the players to raise the rake. No joke, I have a friend who plays in a game in Toronto where the blinds are 10-25 with straddles and restraddles playing PLO and NLH and they rake an average of $500 to $600 A HAND!!! This would seem like an unbeatable game obviously with a rake that big. It's estimated that they rake about $80,000 a week, but the guy who runs the game is a major fish and loses back about $50,000 of the rake weekly LOL.

The game is full of recreational players with too much money, but the massive rake keeps the pros away. Except for a few, who absolutely clean up and make a substantial amount of money from this game.

Having said that, I do think it is unfair to penalize PLO players with higher fees and have said that in the past and will say it again in my meeting later this evening.

As for me saying if I was in charge it would be worse for winning players, that's not quite true. Yes, I would absolutely restructure bonuses so that the worst players get the direct VIP benefits, but that money would ultimately end up in the winning players hands anyway. I do think it's a mistake to award extra money and benefits to the winning players as opposed to keeping the weaker players in action with those same funds. Pros get the money anyway, but by taking care of the "customers" (losing players) they are likely to play more and play longer which is good for game liquidity.
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Old 04-29-2015, 03:16 AM   #8
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Quote:
Originally Posted by DNegs View Post
This is simply not true. I did say that it's possible that the best players increase their win rate, but not that it was a "good thing" for the players to raise the rake. No joke, I have a friend who plays in a game in Toronto where the blinds are 10-25 with straddles and restraddles playing PLO and NLH and they rake an average of $500 to $600 A HAND!!! This would seem like an unbeatable game obviously with a rake that big. It's estimated that they rake about $80,000 a week, but the guy who runs the game is a major fish and loses back about $50,000 of the rake weekly LOL.

The game is full of recreational players with too much money, but the massive rake keeps the pros away. Except for a few, who absolutely clean up and make a substantial amount of money from this game.

Having said that, I do think it is unfair to penalize PLO players with higher fees and have said that in the past and will say it again in my meeting later this evening.
You never said that it was a good thing for winning players to have the rake raised. You said that you were in favour of the higher rake change and if you were in charge it would be even worse for winning players.

Don't have a clue what that story you told has to do with PLO rake nor how way above industry standard rake could possibly be good for your employer.

edit: missed your edit add on.
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Old 04-29-2015, 03:24 AM   #9
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Hopefully daniel can make this problem be taken seriously by pokerstars - thank you Daniel for bringing this issue up with PS.

ty napsus for the post
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Old 04-29-2015, 03:31 AM   #10
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Quote:
Originally Posted by Sect7G View Post
You never said that it was a good thing for winning players to have the rake raised. You said that you were in favour of the higher rake change and if you were in charge it would be even worse for winning players.

Don't have a clue what that story you told has to do with PLO rake nor how way above industry standard rake could possibly be good for your employer.

edit: missed your edit add on.

I'll have to correct you one more time if that's ok. I did not say I was in favor of a rake hike. A rake hike doesn't positively impact me at all, if anything it puts me in the firing lines with guys like you and other pros who grind! I am happy the rake hike was reverted/restructured, but what I was explaining in my blog is that I understand that it's within their rights for a service provider to increase fees. That the decision wasn't just based on a whim like, "Let's just squeeze the pros and get rid of them so we can all eat more lobster!" It was a business decision based on increased taxes in certain markets. Taxes so high that virtually no other service providers can stay afloat.
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Old 04-29-2015, 04:38 AM   #11
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Quote:
Originally Posted by DNegs View Post
Totally on board and have been for some time on this issue. Coincidentally I have a meeting later today and was already planning on bringing this issue up again. Obviously I can't make any promises since I don't have the power to make these decisions, but I can promise you that I will do my best to make a case for an adjustment here. Thanks for the additional summary showing the rake differences between NLHE. I will log that and bring it to the meeting.
Quality. TY napsus.
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Old 04-29-2015, 05:24 AM   #12
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Quote:
Originally Posted by DNegs View Post
Having said that, I do think it is unfair to penalize PLO players with higher fees and have said that in the past and will say it again in my meeting later this evening.
Results: NLHE rake will be doubled to bring it in line with PLO. Erribadi happy.
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Old 04-29-2015, 05:31 AM   #13
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

To be honest it's probably too late now.

They had the option to let PLO take off and make billions, they chose to go after short-term profit and raped the games and destroyed the recs. This can at least be partially understood by the fact that they had no idea how long poker would even last I guess.

Still a good idea, but I feel too little too late.
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Old 04-29-2015, 05:39 AM   #14
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

+1 to decreasing rake please. All but the very best regs are unable to beat the rake. PS would be really dumb not to try and have this great game prosper and keep the recreational players playing PLO longer. Also it just doesn't make sense that rake in PLO is like 2x NLHE...
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Old 04-29-2015, 06:43 AM   #15
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Seems like competitor to PokerStars has already started making moves. Hopefully this trend will continue across stakes and sites.

Quote:
Originally Posted by UnibetAndrew View Post
The next release will be on April 28th and includes:
  • Banzai cash game added replacing Fast Hold'em
  • May Mission added
  • PLO25 rake reduced from 5% to 3%
  • NL4 and NL10 table cap reduced to 8
  • Side pot info and animations added
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Old 04-29-2015, 07:01 AM   #16
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Mild Unibetspam, but PLO4 rake was already 1% to €1 and PLO10 rake 2% to €3.
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Old 04-29-2015, 07:31 AM   #17
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

I make diamond star level at PLO10.

I think that means that I pay 100+ FULL BUYINS in rake in a month.

F lol.

I don't even... f u stars. Svenskaspel here I come again
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Old 04-29-2015, 07:44 AM   #18
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

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Originally Posted by everydaygrind View Post
How about giving up the money Stars pays you for the lowering (or removal) of rake among low to nano limit stakes players?
"he should give up his salary to make 2nl players happy"


are there seriously people that actually think this is a reasonable idea?
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Old 04-29-2015, 08:00 AM   #19
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

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Originally Posted by everydaygrind View Post
How about giving up the money Stars pays you for the lowering (or removal) of rake among low to nano limit stakes players?
This is why we can't have nice things.. Everytime Daniel attempts to reach out on here he's met with stupid comments like this. No wonder he hates this place.
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Old 04-29-2015, 10:40 AM   #20
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

The most constructive post I've read in a while weirdly appears to be the most delusional one: dnegs will never do anything for us.
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Old 04-29-2015, 12:57 PM   #21
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Daniel comes in on the 2nd post and says he will follow through and help out with this situation. Then a bunch of posters bash him. Sounds about right for 2+2 / poker players / humanity.
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Old 04-29-2015, 01:02 PM   #22
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

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Originally Posted by Deuce2High View Post
Daniel comes in on the 2nd post and says he will follow through and help out with this situation. Then a bunch of posters bash him. Sounds about right for 2+2 / poker players / humanity.
Daniel comes in and does damage control and everyone thinks they are fine. Sounds about right for the apathetic nature of humanity.
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Old 04-29-2015, 01:55 PM   #23
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Quote:
Originally Posted by DNegs View Post
Totally on board and have been for some time on this issue. Coincidentally I have a meeting later today and was already planning on bringing this issue up again. Obviously I can't make any promises since I don't have the power to make these decisions, but I can promise you that I will do my best to make a case for an adjustment here. Thanks for the additional summary showing the rake differences between NLHE. I will log that and bring it to the meeting.
Thank you Daniel. I believe a lot of the "hate" you receive on these forums are due to a miscommunication where it did sound like you were being a company man even if it meant the poker ecology would suffer.

I think you are a very good guy and you streaming on twitch is very good for the game.
Keep this up!
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Old 04-29-2015, 02:11 PM   #24
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

How about the fact that winning players are becoming losing players because of constantly diminishing edges? If Stars wants to help the losing players, then helping those who are in danger/in the process of becoming losing players, or have already become losing players, would be the right thing to do. A little bit of foresight, right?
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Old 04-29-2015, 03:05 PM   #25
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Re: View: Negreanu should look into the PLO rake situation as promised on J.Ingram Podcast

Most haters are probably bitter at DNegs because his comments reflect how out of touch he seems to be with the state of (online) poker in 2015. (i.e. 25/50 challenge, winning players are hurting the poker economy the most etc...) Things have gone way down south after Black Friday, more so than Daniel probably realizes.

As he's the flagship pro of Team Pokerstars, I'd guess he gets probably atleast $1M yearly for tournament entries. Even if he would have less than 100% ROI he'd make nearly a million in EV yearly... which probably puts his yearly income in top 25 of poker players?

DNegs says winning poker players are the ones hurting the poker economy most. True or not, but Pokerstars' business is selling a dream. That is becoming a poker pro. Obviously a lot of Stars' customers play just for fun, enjoy the top-of-the-line service they provide and have no ambitions of making it big in poker. But I'm sure every day, somewhere in the world, some guy deposits on Stars with a pipedream of becoming next Negreanu.

I rake >$100k/year. This is cash games only and not all Stars, but gives you some ballpark estimation. If bonuses/rb of winning players were slashed, I would have to win yearly $100k just to cover my playing expenses. Only after $100k profits go to my own pockets.

Deposits are the bloodline of online poker industry. If there's no shot at turning your initial deposit into a small fortune, because it all went to rake, then big part of the dream has died.

That said, a lot of the guys who have a dream of becoming a professional are probably not the segment Stars wants to be targeting. I wouldn't mind Stars giving more benefits to those who deposit most, not who rake the most. Invite them to annual exclusive parties or dinner, send 'em xmas gifts or whatever. (Winamax actually does this, but they seem to send out gifts based on generated rake, not deposits.)

Quote:
Originally Posted by ETBrooD View Post
How about the fact that winning players are becoming losing players because of constantly diminishing edges? If Stars wants to help the losing players, then helping those who are in danger/in the process of becoming losing players, or have already become losing players, would be the right thing to do. A little bit of foresight, right?
Idk if Stars' management reckons online poker might be a dying industry. Lowering rake will probably not change the outcome, and will only hurt their long-term profits, too.
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