Definition: Effective Rake

The measurement of value is one of the most intractable problems of civilization. Brilliant and highly non-obvious solutions to this problem — from markets to money to the time-wage to cost accounting — have constituted some of the most important steps from animal to civilization. Historically, the solutions to one value measurement problem (e.g., accounting for value in a large firm) made possible other institutions as well (e.g. income tax, which must first solve the same kind of problem in order to be Laffer competitive with other kinds of taxation). Intangible asset accounting may now be the most important value measurement problem we face as we move beyond the era where tangible industrial commodities dominated the economy.~

A winning player might exchange 5USD on site A with an a roi of 5%.
The same player deposits 5USD on site B with an roi of 4%
We say that the “effective rake” on site B is higher than site A.

The profitability in terms of “effective rake” is hidden on every site by many contributing factors. The most significant are the make-up of the player field (winning players vs depositing players), and the winning distributions. These factors are not definable for the players community.


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