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Overplaying the Rake Card
Bwin and PokerRoom veteran Kim Lund runs an interesting blog about the poker industry. He understands some things very well, and apparently has done some due thinking around these things.
But in his blog about the industry overplaying the skill card, the analysis is off mark, I feel. He seems to blame game theory for the fact that most players lose in online poker.
The rake is killing you (Photo by Michal Zacharzewski)
“I often call it the greatest game on earth simply because of the depths achieved with such relatively simple game mechanics and rules. And I think it deserves that title. “
“But I also believe that some of the game’s magic has been lost in the online industry’s attempt to exploit one of the game’s most obvious advantages over other gambling games. Skill.”
I’m sure you’re right.
“Now, the problem with poker is that simple game theory will tell you very few players can win money long term.”
Now, this is just wrong.
It’s all about the rake
Poker is about fair competition and human interaction. Aspects that are missing in lotteries and casino games. This is what makes poker such a great game.
If 90% of the players lose long term, it’s not due to game theory. It’s due to the rake.
If it’s impossible to win, it’s because of the rake.
The rake in online poker is ridiculously high, you have to admit it. Particularly at the lower stakes where most losing players start and end their careers.
Poker a zero sum game
If it wasn’t for the rake, the share of winning players would be close to 50%, I’m sure.
Poker is a zero sum game and we’re dealing with reasonably normal distributions here, when it comes to aggregated results over time.
(Maybe Kim Lund has access to numbers that can prove this: I don’t, so forgive me some speculation.)
Hidden payments generate losers
If the industry doesn’t want to create an army of disappointed losers, they should find a better payment model.
Today, payments in online poker are deducted in a secretive way from players’ winnings. This is what makes a large share of the players feel like losers. This is what makes winning appear impossible.
If you lose 8BB/100 just by sitting at the table, it’s very hard to show a long term profit.
A reasonable payment model should make it clear what the cost is. The player should know how much he or she is actually paying to play online poker.
Then a player could show a small profit at the tables and if the monthly subscription brings her bottom line into the red, she’s still a winning player, psychologically and morally.
A story of greed
I guess online poker operators are a bit greedy. They don’t mind carving out unreasonable, short term profits from a seemingly inexhaustible player pool.
A similar subscription service in other areas would pay, what do I know, $30 a month? That’s what a winning player pays in 300 hands at the micro stakes.
The rest of the rake during that month is “unreasonable”, and if the user experience deteriorates, it’s because of the disproportionate but hidden cost of service.
Marketing poker as a lottery, as Kim Lund suggests, is a terrible idea. Instead, I suggest that the industry introduce a reasonable payment model.
In their marketing they should tell it the way it is: Poker is a mind sport.