Just a question about rake calculation at a local poker room. We are arguing about whether the rake is 20% or 25% in this situation.

The room claims to rake 20% off the top.

For example, what they call a $100 tournament has $20 raked off the top, or $80+$20.

He claims that since $20 out of $100 is raked, the rake is 20 percent.

I claim that since $20 is 25% of $80 ($80+$20) the rake is 25 percent.

Which one of us is correct??


Thanks!!

You are spending $100 dollars and only getting $80 nack in the prize pool.

That's 20% in juice.

You are correct:
$100+$20 is 20%
$80+$20 is 25%
IMO he is just trying to make it sound better or doesn't know math very well.

def 25% rake

That's wrong, it's 25%

In this case the percentage is almost a moot point. You can calculate it either way and make an argument for being correct.

Both are right and both are wrong. Either way you slice it the same amount ends up in the house's pocket and that same amount ends up in the prize pool.

Whoever taught you math should refund you some money.

$20 is 20% of $100.

If you want to look at is as $80 + $20 then it can be 25% but my math above is correct. Yours is wrong.

Money that doesn't go to the prizepool
%
Money that goes into the prizepool

This is the only intellectually honest way to calculate rake.


There is a 80+20 tournament at the TB Hard Rock that has a 10$ dealer add-on. The patrons and PRM assured me the tournament had a 20% rake.

OMG this is beyond stupid. This is biggest LoL thread that I've seen in the last month. You are looking at the whole thing wrong.

BigTex is obv correct.

Funny how people find 25% rake acceptable )

That is why the house wants to call it a 20 percent VIG and not 25 percent it sounds better and if they have a $10 dealer add on that raises the VIG to 37.5 percent. The VIG should be calculated as a percentage of the buy in plus any add on the house offers. A VIG this high is unbeatable in the long run. You need to play them just for fun and not for profit.

That is wrong. You're calculating the rake by separating the prize pool from the total cost to the player. It's based on the total cost.

Look at an example of a cash game that rakes 5%. If the pot is 100 they take 5. It's calculated on the total amount.

The tourney rake % is determined the same way. The total cost to the player.

On a 100 + 20 the total cost to player is 120. The house takes 20. 20 is 16.6% of 120.

On an 80 + 20 the total cost to player is 100. House takes 20. 20 is 20% of 100.

Dealer Guy, troll much? Can you ever have a thread without being an *******?

OP states it is a "$100 tournament has $20 raked off the top, or $80+$20."

Once again, you are wrong. My math is correct. Your If...then logic contradicts itself, because you validate my conclusion.

Also, you originally stated "You are spending $100 dollars and only getting $80 nack in the prize pool.

That's 20% in juice."

Yet, you refute by changing what you originally stated saying that 20% of 100$ is 20$.

Thank you for that keen observation.

They both give you the same information, but the number dealer guy is advocating is not as easy to use as the tex way. Why? Well, because presumably you keep track of your winnings and know what your ROI is. If you know your expected ROI is x%, and the tournament is a $80+20, then the premium you pay in addition to the % going to the prize pool is what I consider "juice." In this case it is 25% juice, you are paying 25% of the 80 that goes to the prize pool. If your ROI is > 25% you should play, if it is less than you should not.

For what dealer guy is saying I would deem that money withheld from the BI. I guess it depends on what you interpret the question as. But still dealer guy's number is the worse one to use for the above reason.

If you separate rake from prize pool you're misusing ROI.

The bottom line is simple - Rake % is determined by how much the house takes from the player as their cost to do business.

In a cash game with a 5% rake the house would split a 100 pot with 95 to player and 5 to house.

The player didn't just pay 5 on 95. He paid 5 on a 100. That was the cost of doing business. That's indisputable.

You pay $100 to the house to enter a tourney. They take 20 and put 80 into a prize pool. They took 20% of what you gave them as the cost of doing business.

It's misguided to say the remaining amount going into the prize pool is different from the amount a player receives post rake in a cash game just because it's billed as an 80 + 20.

Rake = rake.

95 + 5 = 80 + 20.

"It depends." There is no reason to consider either denominator to be "the" correct one. Using the total player payment as the denominator is the way I usually do it because it's my personal preference to be consistent with the calculation of casino "hold" on pit table games. But if you prefer to use the prize-pool contribution as the denominator, go right ahead.

The only "rule" is, of course, to use consistent methods when comparing events.

I agree with this guy.

I would go further in insisting it's the right answer, not an optional or alternative right answer. The only logical answer is 20%, and it's pretty universal to speak of it that way.

Sure you can make a math argument for 25%, but not a rational or logical one for poker buy-ins. Just ask yourself, "percent of what?" It represents the percent the frickin' buy-in that goes to the house. 20%. Representing it as the percent of the prize pool amount makes no sense whatsoever and I disagree with Steve that you can even make an argument for that. There's no logical reason to use that as a denominator.

The buy-in is $100, of which some portion will be allocated for the prize and some portion for the house. In this case 20% to the house and 80% to the prize. Saying the buy-in is $80 and by the way plus a 25% fee, is ludicrous.

Thread should have ended on post #2. It's that simple.

For the record, Steve didn't say you could make an argument for either denominator. I said it's a matter of personal preference -- from the standpoint of logic, the choice is arbitrary. (I haven't encountered the "by the way" phrase in this context, so I have to consider it rhetorical embellishment.) So the ubiquitous form venues used -- IIRC just about all of them until Harrah's started doing it differently for the WSOP a few years ago -- and many of them still use, buy-in + fee, e.g., $80+20, is ... ludicrous?

In the olden days of the previous millennium, terminology was pretty consistent: "buy-in" meant the amount of the prize pool contribution, and "entry fee" meant the, er, fee (vig/juice). E.g., $80+$20 verbalized would have been "eighty dollar buy-in, twenty dollar entry fee." These days some people say "buy-in" for the combined amount, but even more say "entry fee" for the combined amount, implicitly thinking, I suppose, that it's the amount required to enter. Of course I'm nostalgic for the olden days. Ah. We apologize for the inconvenience.

Of course not, that shows the player in a compact form how their $100 breaks down. But regardless of the words you use for the two parts, the spend is $100 and it's the only logical denominator if you wish to express the house percentage. In math denominator means the whole. It comes from denomination, which means the class of thing we are talking about, in this case money. The money spent. I can't think of any reasoning where it would be correct to use the prize contribution as the denominator for calculating the rake. It's just wrong.

I didn't intentionally misrepresent your post, and I thought that in principle I was agreeing with you. I apologize for apparently offending you.

Do you feel that sales tax %s are incorrectly stated, spadebidder?

It isn't comparable. Sales tax is added specifically by percentage of the item price. Rake is either a percent of the total spend (or cash pot) or in the case of tourneys, usually a fixed dollar amount. A better, but still flawed, comparison is income tax. Rake is by definition not an add-on but a percentage taken from the total, and it may not be the best word to describe tourney fees anyway. But if you want to look at it as rake and want to know the percentage, then the denominator has to be the total spend.

Let's take the 80+20 example and use the wrong denominator to give us 25% "rake". So now what is the 75% that remains? We must use the same "whole" of 80, so we now have a mysterious $80 * 75% = $60. What is that $60? It's nothing, it's nonsense, because we used the wrong denominator. This should make it very clear why the rake can't be 25%.

Using a segment of the whole for the denominator is actually a fairly common mathematical error in other contexts too.

What part of your previous post which included the meaning of denominator doesn't apply to sales tax?

I feel like I'm in a debate about why the Fair Tax proposal is 23% and not 30%.
I concede that you can make an argument for calculating the "fee" in an 80+20 tourney as 25%.

But if you want to call it "rake" as the OP did, it has to be 20% just by very definition of rake, which is raking out a portion of the whole amount for the house to keep and leaving the rest for the prize.

All the best.

Do they advertise it as a $100 tourney or as a $80 + $20 tourney?