The stupidity of the SnG rake structure

[Fnord]

I find it interesting that in general in Poker as you move up in stakes the rake becomes relativly lower enough to help compesate for tougher opposition.

Then there are PokerStars SnGs...

For the sake of round numbers I'll divide the rake by the prize pool...

Full Table
10+1 (10%)
20+2 (10%)
30+3 (10%)
50+5 (10%)
100+9 (9%)
200+15 (7.5%)
300+20 (6.66%)
500+30 (6%)
1000+50 (5%)

6 handed
12+1 (8.3%)
35+3 (8.5%)

Turbo
6 +.5 (8.3%)
15+1 (6.6%)
25+2 (8%)
55+5 (9%)
105+9 (8.5%)
210+15 (7.1%)
525+30 (5.7%)

How does this rake structure make any sense at all? It totally fucks the middle limit folks up the ass.

[Humphrind]

It totally fucks the middle limit folks up the ass.

I thought my ass hurt.

Interesting points. But I can't help feel that I would do the same thing if I were choosing the rake structure. The higher you get, the less rake you want. It attracts "whales"

[Fnord]

There is no way charging $135 to run a 9 player $200 SnG when you're charging $9 to run a 9 player $10 SnG has anything to do with the actual cost of running one of these.

No wonder the little guys love SnGs so much. The house isn't screwing them.

[Humphrind]

It's not about how much it costs to run one of these. It's about how much they can get to run one of these.

Years of programing has kept you out of the pricing game. I went from a company that worried about gross margin to a company that worried about every cost but gross margin. (but should have) And I can say, the rake should directly reflect the buy in on SnGs.

It doesn't cost $135 in the same way it doesn't cost $9. The true profit is somewhere in the middle, where both stakes whack out the average, which is where Poker Stars banks.

[Fnord]

Just checked UltimateBet and found pretty much the same structure.

I'm just surprised that the market is willing to tolerate such a low discount for playing higher stakes compared to cash games (which are considered a major cash cow) and MTTs.

Fucking government needs to get off their fucking ass and fix the fucking grey market status that allows for all of this fucking price gouging...

BTW, the 12+1 6 max and 15+1 turbos are both really good deals the low rollers on this site should take advantage of.

[Humphrind]

Fucking government needs to get off their ass and fix the fucking grey market status that allows for all of this price gouging...

Sorry to say that if the gov't steps in, they will not put anything in our favor. They will simply take a percentage for themselves, in exchange for legalizing it.

There would be a lot of good in legalizing online gambling, but rake structure would not be one of those.

[Fnord]

Sorry to say that if the gov't steps in, they will not put anything in our favor. They will simply take a percentage for themselves, in exchange for legalizing it.

You're grossly under-estimating the amount of rake being paid.

MMPs charge in the ballpark of $10-$20/month and it's a pretty fair price given what it takes to run one of these (remember, I used to work for XBox Live.) Most poker players pay 10x that. Players like me are paying well over 100x that. Rakeback and reload bonuses offset that, also reload bonuses put money into the hands of bad players generating action.

Figure a poker site costs maybe twice as much to run as an MMP given the banking issues involved. Also consider that the local cardroom is charging less that double to run comperable events and their expenses + tax burden is MUCH greater.

The problem is that the grey market is keeping big companies away from competing. Healthy competition from a Microsoft or Harahs would more than offset all but the most oppressive taxation.

[Humphrind]

The bar has been set. If anything happens others will conform to the current trend set by the online gaming community, not vice-versa.

Anyway, current live games already use a similar rake structure. What makes you think that just because Harrah's goes online, they will drop their rake structure?

[Fnord]

Anyway, current live games already use a similar rake structure. What makes you think that just because Harrah's goes online, they will drop their rake structure?

Price competition is inevitable for a commodity in a free market. In an open market an online poker game pretty much becomes one with time. How much value can you add? Bill Gates knew this, spent Billions and drove decision making to avoid having his crown jewels become commodities for as long as possible.

It doesn't cost a whole lot to run/build one of these. Your biggest obsticle is building a customer base and overcomming the network effect. However, I don't see a whole lot of overwhelming love for the big players in the market.

[Humphrind]

Price competition is inevitable for a commodity in a free market.

I disagree. It's more complicated than that.

Comeptition will increase and price will decrease only when the market dictates. Otherwise, others will follow suit to the current trend. WIth the market as it is now, I doubt that the current trend will dictate a highly competitive market.

Rakeback, reload bonuses and affiliate agreements will be the places poker rooms focus well before they even look at the rakes. Even if the US agrees to legalize these rooms.

[drmcboy]

you wonder if they started all of them at 10 % and moved down the levels that were not getting action.... 50s take forever to fill up, not sure past there but seems very rare I see anything above there about to start. I've been wondering if I keep beating down the 50 game where I'll head to next...

[koolmoe]

[quote="HumphrindInteresting points. But I can't help feel that I would do the same thing if I were choosing the rake structure. The higher you get, the less rake you want. It attracts "whales"[/quote]

It's nowhere near the discount you get in ring games. The 15/30 ring players on Party (one of the biggest games on the internet in terms of stakes * number of hands played), are paying a rake capped at $3 per pot, just like the guys in the 2/4 game. So they are paying between 1%-2% rake.

One of the biggest advantages to smaller rake is that it keeps money in the game longer. The loosest players tend to be easier to beat, but they also pay the most rake.