online poker rakes -- unreal when u think about it

[PokerPaul]

so im doing some bookkeeping and crunching my monthly numbers, and it appears i paid about $4100 in rake for august.

It was actually a very good month for me, so typically all you notice is how much you made (profits) without considering the cost of doing business.

I figure my monthly rake totals come in anywhere between 3000 and 4200. Say an average of 3600, and my yearly total should come in around $43000.

So, for me to be just a breakeven player, i would have to beat my opponents for $43000 over a year if i played as much.

That is an entires years salary to majority of the population. It smind boggeling.

Is there any other service or billing item in a persons life that even comes close to charging $40000 to an individual for 1 year? Closest thing i could think of is maybe the most prestigious golf club in the counttry.

Heck, even property taxes on a million dollar home would only come to about $10000.


So when you look at it like that, don't you wonder that at some point in time this online poker margins gotta become more competitive and balanced. its just out of whack the way it is now.

Even if they were to slash rates in half within a couple years.....that for someone like me is an extra $20000.....

But if they can charge what they do right now and have people playing, i'd do the same if i were them.

[drewjustdrew]

1% property tax? I'm moving to Canada!

[PokerPaul]

yeah but then you'd also have to pay more income taxes otherwise, but u do get health benefits.

Also, if youre a poker player....no taxes on big tourney scores.

[drewjustdrew]

Also, I'm not sure you are thinking about this correctly. The rake is just a cost of doing business. Let's say you are an employee of a company. That company pays a substantial amount of money so that you can earn them a profit. If you were a consultant working for that company, all those costs for supplies, education, equipment etc. would come out of your pocket, but you would be compensated for it by billing the client for your efforts.

Could rakes be lower? Yes. If Full-Tilt, or some of the other smaller sites wanted to increase market share, they could drop rake to $2 or $1 etc. It should eventually come to this as sites compete more fiercely for players. Right now there are just too many new players entering the market for the sites not to capitalize on it. Once the boom caps out, I would expect a lot of competition for players.

[MrJinx]

Get a rakeback deal. If you're playing party, sign up for Empire. Judging by your numbers for August, you should be able to get a deal in the 25-30% range...which would be an extra 1k a month in your pocket. Do a search for "rakeback" on google and shop around for the best offer.

A partner in a small to mid-sized law firm would pay much more than $40K towards overhead.

What I don't really understand is why the fee for a SNG is different depending upon the amount of the buy-in. Well, I understand it varies because that is what the customer is willing to pay, but from the online site's perspective, the cost of running a $5 SNG must be almost identical to the cost of running a $20 SNG.

[MicroBob]

[ QUOTE ]
Once the boom caps out, I would expect a lot of competition for players.

[/ QUOTE ]


Yup. But i would expect to come in the form of more advertising and perhaps more bonuses (which is kinda like a rake-rebate at least).

I doubt the sites will just lower their rake to try to attract new players.
More than 90% of the online-players out there have absolutely no concern about the $1 or $2 that the site takes out of a pot.
Many of them think "Geez...it's only $1 or $2....That doesn't effect me even on the pots I win."


Lowering rake to try to attract new players is a worthless exercise....because new players are just not interested, nor aware, of why lower rake should make a difference in the first place.

[PokerPaul]

Thats exactly my point.

right now they charge whatever they can cuz we as poker customers are in a weird situation.

They just simply charge more and more as the limits and buyins get higher, even tho it has the same fixed costs and overhead as smaller buyins.

At the moment they charge it....because they can, and so far no competition is taking any market away from them due to their high prices.

But this bubble has got to burst sometime.

Its kind of like when the Atari first came out and charged exorbitant amounts for their system and game cartridges.

Then competition stiffened and before you know it prices dropped by 80% within 16 months, which showed just how hi the profit margins were before

[drewjustdrew]

[ QUOTE ]
A partner in a small to mid-sized law firm would pay much more than $40K towards overhead.

What I don't really understand is why the fee for a SNG is different depending upon the amount of the buy-in. Well, I understand it varies because that is what the customer is willing to pay, but from the online site's perspective, the cost of running a $5 SNG must be almost identical to the cost of running a $20 SNG.

[/ QUOTE ]

It could be argued that the $5+1 is a loss leader and profit is made up on the higher limit fees. It's possible that the cost of running a single event is like $20 (doubtful, but just an example). So the 5+1 and 10+1 are a loss, but the 20+2 breaks even and everything else turns a profit. This would be the reasoning I could see for the big live events.

[MicroBob]

[ QUOTE ]

Its kind of like when the Atari first came out and charged exorbitant amounts for their system and game cartridges.

[/ QUOTE ]

It's nothing like this at all.
When a regular product lowers or raises it's prices (like Atari or Gasoline or whatever) everyone can see that it's lower or higher.

In poker-rake, most do not see any difference.
Many players don't even really think about the fact that there is a charge at ALL.

[Justin A]

[ QUOTE ]
[ QUOTE ]

Its kind of like when the Atari first came out and charged exorbitant amounts for their system and game cartridges.

[/ QUOTE ]

It's nothing like this at all.
When a regular product lowers or raises it's prices (like Atari or Gasoline or whatever) everyone can see that it's lower or higher.

In poker-rake, most do not see any difference.
Many players don't even really think about the fact that there is a charge at ALL.

[/ QUOTE ]

They don't have to see the difference. Lower rakes mean less players go broke. It's the casino's job to find the right balance that maximizes profit for them. I'm sure right now Party feels it's rake structure is the best for their interests.

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
Once the boom caps out, I would expect a lot of competition for players.

[/ QUOTE ]


Yup. But i would expect to come in the form of more advertising and perhaps more bonuses (which is kinda like a rake-rebate at least).

I doubt the sites will just lower their rake to try to attract new players.
More than 90% of the online-players out there have absolutely no concern about the $1 or $2 that the site takes out of a pot.
Many of them think "Geez...it's only $1 or $2....That doesn't effect me even on the pots I win."


Lowering rake to try to attract new players is a worthless exercise....because new players are just not interested, nor aware, of why lower rake should make a difference in the first place.

[/ QUOTE ]


even if we assume players are extremely sensative to rake costs, lowerin rake to attract players is clearly a losing proposition from the poker sites' perspective.

i shouldn't need to go into why but all sites will lose if this happens.

Barron

[mosquito]

[ QUOTE ]
so im doing some bookkeeping and crunching my monthly numbers, and it appears i paid about $4100 in rake for august.

It was actually a very good month for me, so typically all you notice is how much you made (profits) without considering the cost of doing business.

I figure my monthly rake totals come in anywhere between 3000 and 4200. Say an average of 3600, and my yearly total should come in around $43000.

So, for me to be just a breakeven player, i would have to beat my opponents for $43000 over a year if i played as much.

That is an entires years salary to majority of the population. It smind boggeling.

Is there any other service or billing item in a persons life that even comes close to charging $40000 to an individual for 1 year? Closest thing i could think of is maybe the most prestigious golf club in the counttry.

Heck, even property taxes on a million dollar home would only come to about $10000.


So when you look at it like that, don't you wonder that at some point in time this online poker margins gotta become more competitive and balanced. its just out of whack the way it is now.

Even if they were to slash rates in half within a couple years.....that for someone like me is an extra $20000.....

But if they can charge what they do right now and have people playing, i'd do the same if i were them.

[/ QUOTE ]

Doh!

Titty dancers pay up to couple hundred a night (best
clubs) for the priveledge of working.