Monday, January 28, 2008

That's a Lotta Rake

In cash games the fees that the house takes are often referred to as rake or drop (because in person the dealers literally "rake" the chips out of the pot with their grubby little hands and "drop" them in a little slot in the table where they disappear into a strongbox). Unlike in tournaments where the fees are paid ahead of time, in cash games the house either takes a set amount per hand or a percentage of the pot up to a given maximum.

In the case of pokerstars in the games that I'm playing they take 5% of the pot up to a maximum of $3 and they round off (down) to the nearest dollar. Compared to the Oaks Club where for games of a similar size they take $3 out of every pot (or evil, evil Bay 101 where they take $4), this is a great deal. Also with no dealer to tip and no bad beat jackpot to fund, online poker wins in a landslide as far as value goes.

The problem that I'm having (I think) is that the rake still adds up at an insane rate. To date this year I've earned 60,273 points. That means at a BEAR MINIMUM pokerstars has taken $60,273 from games that I've played in. That would mean that if the tables were always full (6 handed) and they never took $3 from a pot (you get 2 points when they take $2, but no extra when they take $3) my share of that rake would be $10,045.50. Of course when you take into account that I've played thousands of hands where they've taken $3 and thousands of hands where we were playing 2, 3, 4 or 5 handed the amount that they've actually taken and the amount that I've actually contributed to the amount taken is much more.

To earn 60,273 points playing tournaments I would have had to pay $12,054 in fees so I'm guessing that's at least hoe much I've personally paid in rake. Of course they have given me back $3,167 in FPP's (it doesn't seem so generous any more does it!).

So what does this all mean? Well it's by far the biggest reason that I'm having some much trouble breaking even let alone winning in these games. I've lost about $2,500 playing meaning that if there was no rake I'd be ahead $9,500!

Of course it's not reasonable to pay no rake and if there are no games with no rake then who cares how much better I'm doing than the average player (who is getting killed by the way)? Well the epiphiney that I had today was that the rake is the same for the $10/$20 games as it is for the $5/$10 games. This means that if I can match up equally well or even a little worse against the $10/$20 players as I can against the $5/$10 players then the rake will have much less impact.

For example if I'd played the exact same hands with the exact same results (meaning that somehow the same players made the same decisions with the same cards - it's just for the sake of argument, relax people!) at $10/$20 I would have won $19,000 if there were no rake instead of $9,500. I happen to know (don't ask how, it's complicated) that the actual rake taken at $10/$20 is about 1.25 times as much as at the $5/$10 games even though the stakes are twice as high. So instead of paying $12,054 in rake I would have paid $15,067. Those of you who are good at subtraction would be able to tell me that $19,000 minus $15,067 is $3,933 which is a great deal better than -$2,500!

Those of you who are really astute have probably also figured out that if I paid $15,067 in rake I'd make quite a few more points (in the same number of hands) as well. More money and more points! Jackpot! Right!? This looks perfect!

Uh oh...I sense a but coming!

BUT (it's a very big but so I put it in caps) the players are better at $10/$20. I think. At the very least they should be. The real question is how much better are they and what are my chances against them. Now that I've actually sat here and worked through the numbers it seems stupid not to give it a try.

On a related note I felt like taking some bigish risks today so I jumped into three 6-handed $15/$30 games. That sounds like something a professional poker player should be doing instead of playing for these stupid tables scraps! I played about 300 hands in about 45 minutes and ended up winning about $225. At one point I was down about $700 and I have to admit that those games might be a little too tough for me. At the very least they'll take some tactical adjustments since they are SUPER aggressive.

For now my plan is to play a mix of $5/$10 and $10/$20 games and track my results in each. I'll keep you posted on the results.

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