chaosuk
05-05-2005, 07:29 PM
Apologies if this information is already out there, but I'm not an avid forumite.
Around 6 months ago I discovered a link to a blog which conducted some very good analysis on the Party Poker Steps:
(http://www.livejournal.com/users/walterzuey/35457.html).
It concluded that the structure was largely a rip-off unless you bought in at the highest level. I rounded on Party for performing yet another under-hand scheme and didn’t gave it little more thought since I seldom play stt’s or sng’s. Nothing changed til a couple of weeks ago when I decided a break from cash was needed. I thought it was only sensible to buy in at the highest levels, but then I realised this was wrong. The flatter structure of the steps is an issue, but as we well know this can create opportunities for good players, not deny them, the rest is of the analysis (or specifically the conclusions: I can expand on this) is smoke and mirrors. I don’t reckon party steps to be much more of a rip-off then the standard stt’s.
Perhaps the intuitively bad structure of the Party steps conned the Prima sites into offering a fantastic structure. My mate told me they offered a great value, so, sceptically, I took a look, and he was right.
There are two differences between the Party and Prima structure. The first difference is that Prima only take out tax at the highest step: they reinvest the tax at every other level, unlike Party who keep it. For example at the lowest level, it costs $5 + 50c to buy in: A pool of $50 +$5. The prize is two entries to the next level of $25 + $2.5 i.e. a total of $55. This carries on up the ‘ladder’ until you reach the $550 + $55 where they keep the $55.
Now this in itself is great value. But it gets better. You don’t have to go up the ladder when you win. So, for example, if you play at the $25 + $2.5 level at win a seat to the $112.5 + $11.25, you can take this $123.75 and use it to play at the $25 for as long as you like.
Now imagine if you were to play at this level or the higher ones all year long. Take the $25 events. Suppose playing in normal STT’s you would expect to return a pre-rake profit of roughly $5. One year and 2000 tournaments later you make a pre-tax profit of $10285. After tax it is $5285: $5000 tax!.
Suppose instead you played the $25 ladders. At year-end you haven’t paid any tax/rake but you have $10285, which you can’t cash out. Until, that is, you play at the $550 + $55 level. Conveniently, $10285 is 17 buy-ins. This works out to a tax-payment of $935: less than 20% of the normal stt rate. This is fair. If you’re a break even player after tax then, all things being equal, you now get to gamble for free with the tax you would have normally paid out.
On the downside those used to playing at low-levels have to gamble at a high level in order to cash out. But I suspect you would have to be very risk-averse in order for this not to be worthwhile given the tax-break. Alternatively, you could sell the seats to a trusted high-roller and for a tax-reduction and pay even less tax on the year!
For others playing at the higher levels, 112.5 or $275 + $27.5, playing @ $550 this is less of a burden. On the downside there though, unlike the lower levels, the structure is very flat. E.g. the $275 level has 5 seats to the next level – not much sophisticated HU play. But again, given the trade-off on tax it should be considered worth it.
Interestingly the Prima ladders aren’t that popular (same @ Ladbrokes). This is a little surprising given the structure. The hope for rake in the future is that low rake structures become very popular thus encouraging sites to compete on it, and through increased volume, net gain. No doubt this is a cock-up by Prima et al, but if it became very popular they might see the benefits with increased volume and hopefully, not restructure it. Maybe, inadvertently, Prima could start a rake-war. Who knows?
Bottom line: if you play party steps, go to prima. If you play a lot of stts you should go to prima, unless you really don’t like the gamble or adore the 5:3:1 payout. Remember for the break-even players the gamble is, in theory, free. And if you want to support lower rakes, go play them.
regards chaos
Around 6 months ago I discovered a link to a blog which conducted some very good analysis on the Party Poker Steps:
(http://www.livejournal.com/users/walterzuey/35457.html).
It concluded that the structure was largely a rip-off unless you bought in at the highest level. I rounded on Party for performing yet another under-hand scheme and didn’t gave it little more thought since I seldom play stt’s or sng’s. Nothing changed til a couple of weeks ago when I decided a break from cash was needed. I thought it was only sensible to buy in at the highest levels, but then I realised this was wrong. The flatter structure of the steps is an issue, but as we well know this can create opportunities for good players, not deny them, the rest is of the analysis (or specifically the conclusions: I can expand on this) is smoke and mirrors. I don’t reckon party steps to be much more of a rip-off then the standard stt’s.
Perhaps the intuitively bad structure of the Party steps conned the Prima sites into offering a fantastic structure. My mate told me they offered a great value, so, sceptically, I took a look, and he was right.
There are two differences between the Party and Prima structure. The first difference is that Prima only take out tax at the highest step: they reinvest the tax at every other level, unlike Party who keep it. For example at the lowest level, it costs $5 + 50c to buy in: A pool of $50 +$5. The prize is two entries to the next level of $25 + $2.5 i.e. a total of $55. This carries on up the ‘ladder’ until you reach the $550 + $55 where they keep the $55.
Now this in itself is great value. But it gets better. You don’t have to go up the ladder when you win. So, for example, if you play at the $25 + $2.5 level at win a seat to the $112.5 + $11.25, you can take this $123.75 and use it to play at the $25 for as long as you like.
Now imagine if you were to play at this level or the higher ones all year long. Take the $25 events. Suppose playing in normal STT’s you would expect to return a pre-rake profit of roughly $5. One year and 2000 tournaments later you make a pre-tax profit of $10285. After tax it is $5285: $5000 tax!.
Suppose instead you played the $25 ladders. At year-end you haven’t paid any tax/rake but you have $10285, which you can’t cash out. Until, that is, you play at the $550 + $55 level. Conveniently, $10285 is 17 buy-ins. This works out to a tax-payment of $935: less than 20% of the normal stt rate. This is fair. If you’re a break even player after tax then, all things being equal, you now get to gamble for free with the tax you would have normally paid out.
On the downside those used to playing at low-levels have to gamble at a high level in order to cash out. But I suspect you would have to be very risk-averse in order for this not to be worthwhile given the tax-break. Alternatively, you could sell the seats to a trusted high-roller and for a tax-reduction and pay even less tax on the year!
For others playing at the higher levels, 112.5 or $275 + $27.5, playing @ $550 this is less of a burden. On the downside there though, unlike the lower levels, the structure is very flat. E.g. the $275 level has 5 seats to the next level – not much sophisticated HU play. But again, given the trade-off on tax it should be considered worth it.
Interestingly the Prima ladders aren’t that popular (same @ Ladbrokes). This is a little surprising given the structure. The hope for rake in the future is that low rake structures become very popular thus encouraging sites to compete on it, and through increased volume, net gain. No doubt this is a cock-up by Prima et al, but if it became very popular they might see the benefits with increased volume and hopefully, not restructure it. Maybe, inadvertently, Prima could start a rake-war. Who knows?
Bottom line: if you play party steps, go to prima. If you play a lot of stts you should go to prima, unless you really don’t like the gamble or adore the 5:3:1 payout. Remember for the break-even players the gamble is, in theory, free. And if you want to support lower rakes, go play them.
regards chaos