house fees

[housenuts]

how can poker sites get away with charging such high house fees for the higher limit games? i mean really, what is the difference in the service they offer between a $5+.50 game and a $200+15 game? you're paying $14.50 more for the exact same thing. granted the $200 one may take a little longer because the players are better, but not that much longer.

to me it seems like a complete crime and i can't believe people pay it. in fact, not only do they make more off the fee, but those higher stake players will often have thousands of dollars in their account at any given time which allows the site to invest that money and make more off of it.

[housenuts]

no one agrees?

[The once and future king]

In fact they charge less for 200 game.

[rybones]

sure, as a percent they do charge less. I think the point that was being made was that the cost of running the $5.00 game is essentially the same as running a $200.00 game and so you should see an even greater discount? I guess I agree.

[Gator]

Full agreement. $200 tournies probably cost a little more in that there are $2,000 in financial transcations leading to more customer support issues on the cashiering side.

But this is slight.

In essence, they make $10 for 10 people to have 45 minutes of play in a $10SNG and nearly $200 for providing that same service for ten people in a $200 SNG.

It's almost like Mickey D's charging $2.99 for a happy meal if you go through the drive thru in a chevy and $50 if you go through in a Mercedes.

I hate it. Wish the fish could learn to play on a rake free site, but if they could learn that, they'd also learn that A4 from early position isn't a monster.

[TracyMiller]

My guess is that they have to charge larger amounts for the larger buy-ins so they can remain viable as a business. Despite the low overhead they must have, they still have expenses (servers to buy and maintain, software to develop, programmers and customer service personnel to pay, income taxes, marketing costs, utility costs, insurance costs, etc.). Plus, of course, a little profit margin in order to remain in business (companies don't open a business merely to cover costs).

They know that the larger buy-in players will pay a larger fee. If they have $200 for a buy-in, then of course they have $15 for a fee. Consider it the charge to have access to such a wonderful poker opportunity.

[FloppedFlush]

I'd be happy to pay lower fees across the board, but I think it makes more sense to charge $5+0.50 and $200+15 than it would to charge $5+7 and $200+7

[Benholio]

The cost to run a tournament (or offer any service or product) is not the primary factor in determining the price to charge. Whatever people will pay, is what you should charge. If people would pay a $50 rake for a $200 tournament, they would charge $50. If the tournaments cost them $0.10 to run and people will pay $15, they will charge $15. The only time the actual cost comes into play is if they would lose money.

[eastbay]

I totally agree. If you supply the $100M, we can start a site to compete with Party. You in?

eastbay