I need your help! X-post

[tomdemaine]

I am about to begin my undergraduate dissertation and I'm planning to research why online poker rake is so high when there is so much competition. Essentially network effects, ie fish don't care about rake and sharks only care about fish. However it's a 15,000 word dissertation so I may need to say a little more than that /images/graemlins/smile.gif

I need data to study and analyse I'm looking for links to pretty much anything to do with the topic from player numbers on each site to rake calculations per player to bonus structures anything that pertains to the online poker industry. This isn't the only place I'll look obviously but if you guys have some vast store of data or can link me to some I'd be much obliged.

Thanks

I don't know of anything off the top of my head, but I think a good direction would be to compare how new sites (bodog, full tilt etc) are compared to established ones like party and stars. Bodogs unlimited 20% bonus's and guaranteed $ tourneys must have been costing the site a ton of money, but now it's down to 10%


Good luck with it, digging up that info will be tough

bonuswhores.com has some nice quantitative stuff. I don't know if i'd trust it for your dissertation, though. I suggest you write a program to figure this out yourself.

[tomdemaine]

Thanks guys. I wish I could write a program but I'm in no way technically minded /images/graemlins/smile.gif I would like your input though because one table tourny rakes seem silliest (and by that I mean against economics theory) of all. Why are you $200ers resigned to paying $15 for the same service that a $10 player is getting for $1? And why hasn't some other site com in and undercut Party to gain it's market share? I think I know the answer but I'd like your perspective.

[RikaKazak]

u already answered it man, if it was up to me, I would play fulltilt, liek the software, the customer service and I really want a jersey /images/graemlins/smile.gif but fish are on pp, so I stay at pp. I do this for a living, I play 215's, I pay that $15 cause I'll make more overall playing a 200 and paying 15 then I will playing a 10 and paying 1. If a 200 paid 75 and a 10 paid 1 then I would play the 10, cause I would make more, plain and simple, overall profit number 1 (within your bankroll)

[jedinite]

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Why are you $200ers resigned to paying $15 for the same service that a $10 player is getting for $1?

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If you don't see that the $200+15 is actually "cheaper" than the $10+1 you might want to go a different direction for your thesis.

The Party $5+1 is actually the most expensive of STTs out there...

Party has the players because they have the advertising budget (and most mindshare as a function of advertising, word of mouth, product placement, etc) and because they have the most players. yes, they have the most players because they have the most players. Your average poker player is rake-insensitive: they watch the WSOP, they see the commercial, they give it a try. They play recreationally. Then most of the players who would care about rake come to feast on the fish.

Its been said before, but if party didn't have the most fish we'd probably all be playing on Ultimate Bet.

[fnord_too]

[ QUOTE ]
[ QUOTE ]
Why are you $200ers resigned to paying $15 for the same service that a $10 player is getting for $1?

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If you don't see that the $200+15 is actually "cheaper" than the $10+1 you might want to go a different direction for your thesis.



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You're missing the point: Party makes money on the 10+1's. The cost of them running a 200+15 is at best minutely higher (since they run longer). That means that they could still be making a nice profit charging a smaller rake.

OP - from parties side I think you need to consider that losing players (players who would lose regardless of the rake, at least) will go broke faster in the 200's, so they get less money in play and would earn less rake.

I really think that there will be a shakeout period and the rake will go down. Whether this happens before or after the boom wanes I don't know, but I think it is coming.

[Insty]

I've been wondering about this too. Let us know when you're done.
Don't forget about rakeback. I got the best rakeback deal I could find on party skins..

[pokerlaw]

What do we know about these sites? 1) they are making a boatload of money; 2) they have a growing consumer base; 3) they have a lot of repeat customers (i.e., they are selling an addictive product).

Is the rake "so high?" Compare the relative substitutes:
- Casino - rake is higher
- Underground casino - same thing.

What other relative substitues are there? Internet poker is quite a unique product. The ease at which someone can gambol at is unprecedented. In fact, I think the argument can be made that internet poker is so unique that there is no substitute (you can load up 8 games in a few minutes and instantly access a very large base of players to the extent unavailable/unattainable through any other medium of poker).

Given that there is no substitute for online poker, how is there competition? While we have different suppliers of online poker, the industry has a whole has a monopoly over the product and therefore can charge a monopoly profit. So long as that profit retains the customer base, then they have no incentive to reduce price.

Over time, the rake should reduce to a leval at which online poker sites earn only a "normal" profit, which is to say a profit that gives the investors an equal return (considering all market factors) as if they invested in a product with no monopoly profit. For this to happen though, the supply-side market must become saturated and this is not going to happen any time soon (high barriers to entry, etc.) Most importantly in my opinion, the fact that you need a customers to get customers in the online poker market - noone wants to be the first player to play on X site, they want to play with other players, so they go to existing sites - most notably, Party and Stars. To retain their market share, both sites have programs to retain their lost loyal/frequent customers (i.e., the "sharks) through rakeback, reload bonuses, FPP's, etc. This acts to slow the process over which the rake will be reduced.

Well, my bankruptcy class is over now...hope this rambling churned out a few points that you can ponder over. Good luck w/ the paper.

[jedinite]

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Party makes money on the 10+1's. The cost of them running a 200+15 is at best minutely higher (since they run longer). That means that they could still be making a nice profit charging a smaller rake.

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Sure. But Party's actually spending a lot more overall to offer the $10+1 (because they're offering 100 of those to every 200+15, or whatever).

I understand the general point, and its an interesting point of view around the actual level of competition in the online gambling arena. But that doesn't change the fact that the $200+15 is still "cheaper" for the player and less profitable for the house than the $10+1. Thus a good reason for the already reduced rake, I think : attracting higher-dollar players at a better fee whereas the fish don't pay attention to a 10% - 20% rake at the $11 or $6.