It seems to be relevant to the politics of poker site decisions that affect the rake promoted by sites that there are typical popular attitudes in relation to it.Our view is that if it is viewed scientifically and rationally (which is psychologically difficult!) that rake should have the function of a standard of measurement and thus that it should become comparable to the watt or the hour or a degree of temperature. And chips, as an efficient practical means of transferring utility, naturally links directly with the game theoretic idea of “TU games” (games with transferable utility)(Of course it is well known that in general the psychological reaction of a human of this world in relation to alternative prospects involving his or her receipt of money, this with elements of uncertainty linked with probabilities, tends to be NON-LINEAR. And this has the effect that the human individuals utility for chips is typically a non-linear function, as it were, of the prospective quantities of chips to be possibly received.)~Ideal Poker https://www.scribd.com/doc/224948379/Ideal-Poker
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 (http://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”
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.
When one studies what are called ”cooperative games”, which in economic terms include mergers and acquisitions or cartel formation, it is found to be appropriate and is standard to form two basic classifications:
(1): Games with transferable utility.
(2): Games without transferable utility
(or “NTU” games).In the world of practical realities it is money which typically causes the existence of a game of type (1) rather than of type (2); money is the “lubrication” which enables the efficient “transfer of utility”. And generally if games can be transformed from type (2) to type (1) there is a gain, on average, to all the players in terms of whatever might be expected to be the outcome.~https://www.scribd.com/doc/224948379/Ideal-Poker
It would also be helpful if players like Sauce and PG stopped teaching that poker is Zero sum.What the community and Sauce would benefit from is if he understood the definition of “effective rake” or profitability of the field. Rake as a % vs effective rake.And understanding that it’s a lack of a proper value measurement “mechanism” from the players view that is the true cause of such high effective rake or rake as a %.
Originally Posted by BustedonLI
Sauce123 – what is stopping another operator from offering the same service with lower rakes? The status quo site(s) is held up by government regulations, payment processor restrictions, and a monopoly sized share of the market (etc.)
Originally Posted by sauce123
No idea, I don’t have an educated opinion on this.I’m not arguing how much rake Stars should charge, I’m arguing that the reason games are bad is likely in large part that rake is high relative to winrates. I’m also arguing that some of Stars’ justifications for current rake levels don’t seem compelling. Stars can of course say rake is high because they want to maximize their short, (and potentially medium and longterm) profit. I might not like that as a professional poker player, but that’s not necessarily Stars’ problem.
What we should be discussing and asking for in this regard is a rake standard based on effective rake. One can note if players were taught by their coaches to understand and monitor these things then it certainly would become stars problem. This is what we call good poker strategy.What’s more is “jobs” and “winrate” are lagging indicators because of variance and that judging by today’s “psychology” stars will have to make massive changes to not get eatin alive in the near future by overhead costs (for example: server technology) and customer liquidity, in the emerging technology boom.
Yes exactly all this.
Now if we can be allowed to extended the argument further what I want to suggest is that it is the lack of an accurate measurement mechanism, from the players perspective, that actually holds up effective rake or rake as a %. (which is in contrast to popular belief/culture).
In other words, poker has a value measurement problem, and it might be that solving this problem, might have a dramatic effect on rake as a % (and therefore effective rake). Historically this has been a problem previously thought unsolvable from the players perspective.
It is a difficult variable/measurement to describe as there is both hidden and not so tangible aspects involved in what determines the average profitability of a field. But the more we are able to describe the problem the more we do in fact render it solvable (especially as a game which we know are necessarily so).
This seems much like the discussion of a newtonian view vs an einsteinian, bohmian or some other new quantum type of view we might agree exists but can’t quite put our fingers on.
I will look to read everything I can by them, thanks.
I will not be able to comment or meditate on the accuracy of that method yet. But regardless it is to the point. What we should be thinking about is an effective rake standard in which rake as a % fluctuates with respect to the profitability of a given field.
I do not know if the above method adjusts quickly or accurately enough to produce such a thing ( ie “rake-o-meter”), especially with respect to other sites and other fields/games. In mttsng’s for example, the variance is often beyond the scope of even most regs volume, especially given that profitability levels might change within a given year.
What is more/most important though, is that there needs to be no mental barrier for such a standard (make it obvious for recs and pros alike). Typically we are afraid to educate players and especially recs, and in specific regards to “where to play”, but such a standard (and especially with increased player liquidity (ie voting with ones feet)), would no doubt bring favorable, possibly dramatic, change.
Today we face somewhat the exact opposite scenario, and not only are we in the dark to effective rake as a community, but the collective population seems to have grown dull from this massive leak. No political formation, or intelligible collective argument can occur on the players side at any level, and I think you also allude to this, if we can put this under the “health” category.
It is not the same bountiful environment I walked into pre black friday, yet technology and efficiency advances (also we must not as rake is effectively increasing, sites pull in a higher profit as a %)…
The problem with this chain of thought is that the games used to be very beatable, so beatable in fact that pros started multi tabling and playing stakes as low as NL10 (maybe lower?) in order to make a living. If you reduce the rake again you’re just going to have more pros playing those stakes and the win rates will go back down in time and the effective rake will go back up. Those type of games were not designed for players to make a living from.
This is the exact belief that I am hoping that the collective knowledgeable players such as Sauce can help dispel. It is a product and a symptom of an unjust and unfounded misunderstanding of economics,an analysis in a vacuum which does not transcribe to irl in this way.
It does not stand to reason to say such a thing. And furthermore, it is exactly that the decline of the profitability of both the actual global economy, and the specific economy of the games has created the environment that necessitates multi-tabling.
Players will always multi-table to some standard, and the more games are over raked the more they will push this standard, and relax it in under-raked environments with good irl economic conditions (ie spend mental energy on other possibly non poker related yet +ev endeavors). Mass tabling (beyond what is natural) is a symptom, not a cause.
Originally Posted by J.Smithy
The special commodity or medium that we call EV has a long and interesting history. And since we are so dependent on our use of it and so much controlled and motivated by the wish to have more of it or not to lose what we have we may become irrational in thinking about EV and fail to be able to reason about it like a technology, such as radio, to be used more or less efficiently
So I wish to present the argument that various interest and groups, notably including PSFTFBICIADOJ has sold to the players a “quasi-doctrine” which teaches, in effect, that “less is more” or that (in other words) “raked poker is better than not raked poker”.Quote:
Mass tabling is not a new concept brought about due to the decline in game quality. Players mass tabled during the golden years as well when win rates were incredibly high.
Yes exactly it is a natural phenomenon that cannot be greatly effected.Quote:
If Pokerstars reduced the rake tomorrow are you suggesting a 20 table player will reduce his tables to 18 or whatever? No, the player will continue to play his max amount of tables but just make more money.
I explicit described this. Mass-tabling cannot be effected in a significant way. But the extent it exists today certainly was caused by fields with ever decreasing profits. There will always be mass tablers, but it won’t be a problem in the future.Quote:
Also I would argue lowering the rake at a stake will only encourage more pros to play it. Lowering the rake will not encourage more recreational players to play a stake.
This SEEMS like it is true, but it is not. When you extend the economic argument out further it becomes clear that profitable fields attract players of both sorts. Mason has stated it in his want to give promo money straight to the recs, and Sauce has explained it in his perspective as well. The problem is that the promo money cannot come from what would be players profits in the first place, otherwise you are effectively re raking monies.Quote:
Would you rather the table rake was 5bb/100 lower or the table had an extra recreational player on it? I think you’re looking for the wrong sort of change to boost online poker.
These things are from the same metric “effective rake”, and I hope that Sauce can see now the importance of it. From the most professional player’s view it might not seem helpful, but we need it to collectively dispel a popular myth within the community.
Over raked games create a bad culture for players of all types, an infertile soil. Nobody wanted this, but it has become observable. Games are built to stagnate the fields rather than to progress them. Think of over raked games as demotivating for the masses (like a reversed polarity magnetic that repels instead of attracts).
Conversely, properly raked fields breed intelligent players, and intelligent players create entertaining environments. If we don’t understand the economics, we can think of it like magic. I claim an ever decreasing effective rake (or rake as a %) is like magic in regards to what it does to the player pools.Quote:
What do you think the rake level should be, other than just saying lower?
We want it to be on the freest market equilibrium possible, to which today we do not have. Who knows what the true cost of exchanging our money for chips should be, but today it is obviously held up by unnatural conditions and unreasonable logic. I appreciate the question though, as I think we all should.
I think we should consider what should be a standard, if there can ever be believed to be one…I have some ideas but most importantly I think the phrase “effective rake” levates the conversation in the minds of every players, and this should seem significant since market equilibrium are often set by popular public opinion:Quote:
Originally Posted by J. Smith
It seems to be relevant to the politics of poker site decisions that affect the rake promoted by sites that there are typical popular attitudes in relation to it. Although chips themselves are merely an artifact of practical usefulness in poker communities and/or sites, there are some traditional or popular views associating chips with sin or immorality or unethical or unjust behavior. And such views can have the effect that an ideal of rakeless poker does not seem such a good cause as an ideal of a good public water supply.
Our view is that if it is viewed scientifically and rationally (which is psychologically difficult!) that rake should have the function of a standard of measurement and thus that it should become comparable to the watt or the hour or a degree of temperature. And chips, as an efficient practical means of transferring utility, naturally links directly with the game theoretic idea of “TU games” (games with transferable utility)
(Of course it is well known that in general the psychological reaction of a human of this world in relation to alternative prospects involving his or her receipt of money, this with elements of uncertainty linked with probabilities, tends to be NON-LINEAR. And this has the effect that the human individuals utility for chips is typically a non-linear function, as it were, of the prospective quantities of chips to be possibly received.) It is so desirable in game theory to have transferable utility that that those using game theoretic analyses go ahead and use the transferable utility concept although it might not be entirely fitting except for individual games of comparatively small weight played by large poker sites.
So its really a strange solution to a strange observation, but that shouldn’t dissuade us from dialogue on the matter (at least of the Bohmian kind).
Why won’t it be a problem in the future?
Because of what I will explain if given the opportunity.Quote:
Also today’s levels of mass tabling are also going up because of advances in technology which is making it much easier for players to multi-table.
Yes this is inevitable and so any such measures to increase profitability should incorporate this inevitability.Quote:
I would also say the amount of mass tabling can and very likely will be effected by sites limiting the number of tables a player can play in the future. Unibet may already do this, I’m not sure?
This is not to the players favors. We do not want 3rd parties restricting our freedom. We want free market solutions.Quote:
Why would recreational players be more attracted to sites where their money is split marginally more in favour of the winning players than it was before? If the poker site offers the recs promotions/bonuses/etc from its share of the deposits made then that is more likely to keep the recreational player coming back. Giving a larger share to the pros to withdraw doesn’t achieve anything for them or the site.
An “effective rake” standard would ensure that ALL players win more than today’s game. And yes we are all for “promos” and marketing. The most obvious change would be to market the game through players that earn a living from it. This is a sustainable culture. Today’s culture/environment are not sustainable in this regard.Quote:
I think it is a huge reach to suggest a lower rake is going to change the landscape and create an entertaining environment! I mean it will boost the happiness of the winners but that’s something different.
Since ALL players would gain, then we expect the happiness of all players to increase, and thus entertainment value is tautologically raised.Quote:
Lower rake will not get more recs in the pool as why would they care, if they even know about rake? It will attract more pros though.
You point out a historically prevailing attitude, but the general player psychology is changing. Even most posters on this forum are realizing in this over-raked environment they themselves ARE the rec players. We are ALL the rec players so long as we play in such a game.Quote:
If Pokerstars said there would be no rake on $.25/$.50 tables for tomorrow only do you think the tables would have more pros or recs on them than normal? The game quality would go down as the ratio of pros to recs would get worse. Of course with the abolition of rake there may be more winners or higher win rates, or lower win rates depending on the resultant player pool, but clearly a no cost poker site is not a feasible option.
This would cause a firestorm, from all fields wanting to also share in such a new rake policy. Do you see the difference between analysis in vaccum and irl? The community is upset, and the most prominent members are admitting change is need, and specifically in regards to the status quo rake policies.Quote:
If a poker site thought they could lower the rake, attract all the players and make a profit it would have happened by now. Clearly these businesses (and no new business) thinks this is feasible. They would need tens (hundreds?) of millions to begin with and even if they succeeded there would be nothing to stop someone else following suit. The vast sums required for potentially no end result means this will never happen.
You see in an over-raked environment we lack the creative intelligent peoples that can address and solve these problems. We get a massive pool of naysayers. But you also must understand historically and recently this industry has a status quo that is very much propped up by regulation and technological restrictions. What you suggest is a possible FUTURE for the game, but everything is very much stagnant right now and the cause is very much observable and describable.Quote:
The free market sets the costs for playing poker. If there was a real anomaly here a competitor would have came in and taken all the business, but that hasn’t happened.
A free market supposes no government intervention. Poker is plagued from black friday. It is not at all free, the Americans cannot even play with the global pool!Quote:
Instead we just have players complaining about the rake levels which have been the same for years.
Yes but EFFECTIVE rake has risen dramatically every year!Quote:
If the rake is reduced do you think this will stop the skill gap being closed by players? The same problem will come up again a few months/years down the line and then what, say the sites need to reduce their rake again because the pros incomes are going down? I never understand why online pros think the sites should put their positions above its own?
Yes if rake as a % was tied to effective rake, there will never be this problem. And then there is incentive for sites to offer this superior standard. Would you argue that players should not ask for better value? What is the better strategy? What rake should we ask for?Quote:
Eg Spin & Gos. It’s introduction was hated on this website (probably still is) but they are a huge moneymaking game for PS. They have also created several $1M winners (rec winners too) which are great for publicity and recruiting other new players, who may or may not play other games in addition to spin & gos.
We suspect rather that there is evidence to the contrary and that spin and go’s flip players that prefer a skilled game towards players that play casino style. We should all be allowed to play whatever we want, but some games teach intelligence and that social intelligence is something to be coveted. We cannot allow skill games to be degraded all the way to luck and chance.Quote:
your economic knowledge is far superior to mine but this isn’t just an economic problem and online poker won’t be saved by just lowering the rake. I apologise for being unable to debate some points with you.
No it is an economic problem, that is exactly what it is, a game, with an optimal strategy. We should not settle for less, collectively.
But from “their” point of view “we” are ourselves a third party!Quote:
Originally Posted by J.Smithy
It was the observation of a new “line” that has become popular with those responsible for “raked” functions relating to national poker sites that gave us the idea for the study of “asymptotically rakeless” poker.
The idea seems paradoxical, but by speaking of “rake targeting” these responsible officials are effectively CONFESSING that, notwithstanding how they formerly were speaking about the difficulties and problems of their functions, that it is indeed after all possible to control rake by controlling the supply of chips (as if by limiting the amount of individual “prints” that could be made of a work of art being produced as “prints”). This popularity of the line of “rake targeting” seems to have started in the US, which is the place, among the USA, Canada, Australia, and Europe, which had the most losing players. And we can note also that US was hardly a place where any crisis of poverty really forced them to not maintain the value of their chips but rather just a place where “raked” thinking was probably very influential.
In today’s centralized status quo environment we have such a high effective rake propped up by certain “industry” and “technological” standards (especially in relation to regulation).
The solution must then necessarily be a form of decentralization that causes a mass player liquidity. Although no one can fully forsee the result, it shouldn’t be hard to argue in one form or another this will favorably effect “rake” in the profitability of the games sense.Quote:
How or why would the free market choose to favour “our” freedom, at the cost of restricting “theirs”?Quote:
Originally Posted by JSmithy
Our observation, based on thinking in terms of “the long term” rather than in terms of “short range expediency”, was simply that there is no ideal rate of rake that should be selected and chosen as the target but rather that the ideal concept would necessarily be that of a zero rate for what is called rake.
It is true to say such an equilibrium would not be to the players full favor of zero, but we should also expect that the truth is today’s market is not at the “free” equilibrium. What is needed is a catalyst to begin the levation of such a rake standard that might free up these forces and tend the market towards its more natural equilibrium.Quote:
Originally Posted by J.Smithy
But of course, also, poker sites of a state cannot actually do anything of the form that can be called “rake targeting” without having some means for measuring rake. How would they do this? The means for measuring inflation that they would naturally use would be a “deposits raked” index relating to domestic transactions within the territory of the state.
In the USA the standard domestic “deposits raked” index has a long history and it actually originated back in the days when the USA was still on the “rake standard” with regard to the monetary standards being accepted then. And most sites nowadays having large domestic economies also have some sort of an analogous index of ‘deposits raked’.
Again it might be difficult to understand exactly what is being suggested, however by putting it into its proper context some players might naturally start to vidate the meaning:Quote:
Originally Posted by JSmithy
And so the various sites managed with “rake targeting” would be comparable by professional and recreational players who would be able to form opinions about the quality of the rake. And what I want to suggest is that “the public” or the players, those for whom a medium of exchange functions as a basic utility, may develop opinions that are critical of rake of lower “value quality”. That is, the public may learn to demand better quality of that which CAN be managed to be of better quality or which can be managed to be of the lower quality observed in so many of the various poker sites in the 21st century.
So here is the possibility of “asymptotically ideal (rakeless) poker”. Starting with the idea of value stabilization in relation to a domestic ‘deposits raked’ index associated with the territory of one state, beyond that there is the natural and logical concept of internationally based rake comparisons. The sites being compared, like PSFTCIAFBIDOJ, Merge, Party Poker, etc. can be viewed with critical eyes by their players and by those who may have the option of whether or not or how to use one of them. This can lead to pressure for good quality and consequently for a lessened rate of rake.