How much difference does rake mean to you???

[Leonardo]

Lets say you are an LA player, you play mainly at the Bicycle or Commerce. The rakes are high there. Would you change venues if you heard a new place opened where there was a button charge of $2 instead of $4 or whatever it is on the lower limit games.What percentage of people would change?? Could a new venue of 20 or 30 tables be possible in the LA area, ie, would enough players come? Would you?

[Rick Nebiolo]

Leonardo,

I like to start my day with a rake rant so here goes. I've been posting on these forums a long time and for the past eighteen months work at the Bike as a host/lead prop/PR/and miscellaneous duties guy. Most of my posts regarding rake/drop/time collection are on RGP (some are on 2+2) so you can Google Using Advanced Groups Search or Search this forum on my name crossed with rake/drop and find them. My focus is to convince management that it is imperative that they find a legal way to reduce drop in small pots (rake is based on pot size and not legal) and this is the key to bringing in new customers. I'm slowly making headway.

Both the Bike and Commerce (actually all Los Angeles Clubs with one possible exception) have horrendous drops in the following spot. You’re playing 3/6 holdem, two players limp, the SB folds, and the BB checks. Someone bets the flop and everyone folds. Both clubs take a full $3 drop and $1 jackpot drop. Outside of California you would have either no rake or a $1 rake. Online you would have no rake since they usually take the first dollar of rake on $20 of called action. (Note that the Bike takes a $1 modified drop when someone open raises and all fold – I’m fighting to make this 50 cents like it is in top section (zero would be best BTW but I need to keep my job) but gee it would help my cause if more of you lower limit players would complain in writing. Anyway, in this spot the Commerce still takes it all!)

It’s been eight months since I personally checked but the Normandie had found a way to take a little less in the above situation (updates are appreciated). They have one blind so lets say two players limp as above. The flop comes down and someone bets and all fold. They take “only” one dollar of drop (plus the jackpot drop). They take the remaining two dollars of drop only when they get two called bets post flop i.e., the flop is bet and called they take a dollar, the turn is checked they take nothing and the river is bet they take the last dollar. This emulates a Las Vegas style rake without being tied to pot size. I’d like to go for the home run and make all drops contingent on called bets post flop. Now a moderately tight low limit game becomes beatable inspiring a whole unseen army of new customers.

Upper management (well upper compared to me, who is lower management J ) might argue that some of this may not be legal. I say let’s investigate and look at what the Normandie is doing. Management might argue that the Commerce gets all the business despite the predatory rake. I say they have a tremendous location but even they are half empty through late afternoon, and they too would benefit by improving their rake (by bringing in retirees who are price sensitive and like to play mornings and early afternoons). Management might say that few people play at the Normandie so lower drops don’t matter. I say the Normandie makes a huge mistake with one blind (this kills the action), they have a strong competitor less than one mile away (the Hustler) which spends more on wall hangings and TVs then the Normandie spends on its whole building, and besides, when I’ve checked the Normandie seems to be doing pretty well considering that it is sort of downscale. Unfortunately, by this time management’s eyes are glazed over so I need to refine my arguments (which is why I’m practicing here).

Anyway, if my system were fully implemented, a significant number of tighter players would be attracted back to the clubs, especially early in the day. The clubs would fade occasional drops but gain back revenue with increased hand speed (tighter games play faster). They would have more games, bust fewer players with highly volatile loose games, lower limit players could move up by developing skills in semi-tight games without sacrificing bankroll building (right now you can make some money in a super loose 4/8 holdem but you won’t develop skills to move up) and marginally motivated players (i.e., people who shop for value in recreation and are offended by full drops on tiny pots) would be attracted to the clubs.

None of this answers your question. OK, let’s say Crystal Park decided to compete on drop (this is possible while seeing new clubs open is not possible under the law). They still would have problems because their business base is now so low and the low drop would be attractive mostly to tight players who don’t want to play with other tight players. So low drops alone won’t work (but they would help).

Before you decide to put a bullet through your head for reading my post, I have one note regarding the impact of a fair drop. A big success story at the Bike is the 20/40 stud/8. We were always a buck cheaper per pot on a full game than the Commerce but now have all the action once we got more aggressive cutting drop short handed and also instituted a 50 cent modified drop when fourth street is not dealt. We don’t sacrifice revenue because we have more games and faster games (the lower and fairer drop does tend to attract the tighter players, but the game is still plenty loose enough to beat if you play well).

My best friend’s wife would say, "Ask me what time it is and I’ll describe how to build a watch." Sorry about that!

Regards,

Rick

[Dynasty]

One interesting impact of the differenet Commerce and Bicycle rakes is that rake-concious players like yourself will play at the Bicycle. Those types of players are usually people who spend at least some time studying the game and play reasonably well. The rake-ignorant players who usually don't know jack about how to playe stay at the Commerce without "knowing better".

So, where am I going to play? I'll see you at the Commerce.

[Louie Landale]

Is this legal in CA: any round featuring a called bet gets raked $1? So if its capped 8 ways PF and checked down, the club gets $1.

- Louie

[Rick Nebiolo]

Louie,

Per last years field trip in 4/8 and 3/6 holdem the Normandie takes $1 before the hand begins (at the Bike we now leave the chips out there but take a dollar from the SB (50 cents in top section) if there is no flop - that is our modified drop). They take the jackpot drop the second the flop comes down (same as us). They take the second dollar of collection once there is a called bet post flop. They take the third and final dollar of collection once there is a second called bet post flop. Note that a flop with a bet and a called raise would generate the full collection since there are two called postflop bets.

I think they took the 6/12 collection in two swoops - $2 BTF and $2 on a called bet with a $2! jackpot drop (this $2 jackpot drop may be why they are weak in 6/12). I hope to gather some information in a few weeks on a field trip to the Normandie, a local Indian Casino, a local casino such as Ocean's 11 which is just out of Los Angeles County, and also might query the low limit forum for information.

The Normandie is the only old Gardena Club that has survived (The Hustler took over the El Dorado Club's location and license but put in a new building). The Normandie has about 60 tables so I assume they are not flying below the radar screen of law enforcement. So there is hope for a fairer drop in LA.

Regards,

Rick

[Rick Nebiolo]

Dynasty,

There is certainly some truth to this. I believe the Bike low limit games are a little tighter on average but I don't play enough at the Commerce (at least low limit) to really know. I would bet that if I had access to the data, I could show that the Bike makes just as much per hour per table because our hand speed is higher (despite fading some collections when there is no flop).

One other factor is that the Bike is IMO more comfortable and measurably roomier per table than the Commerce with much better acoustics. When you play in comfort it is a lot easier to play well.

I'll get back with more thoughts later tonight or tomorrow morning but I'm already late for work.

Regards,

Rick

[DanS]

[ QUOTE ]
Before you decide to put a bullet through your head for reading my post...

My best friend’s wife would say, "Ask me what time it is and I’ll describe how to build a watch." Sorry about that!


[/ QUOTE ]

Rick,
Other than the legions of high quality posters in the mid stakes forum (of which you are one), your rake/drop practices posts are the best posts on twoplustwo. Sometimes I feel like the nittiest 23 year old in the world when I try to have a discussion of this sort with the floormen of the Bay Area clubs, and I too tend to give up when I see their eyes glaze over. It's good to know that somebody like you thats toes boths sides of the player/management line is willing to serve as a conduit for ideas which create win/win situations.

Dan

P.S. I'd love to meet you when I'm in Socal (at the Healthsouth center, training home of the L.A. Kings) on business in mid-August...if the idea of the $4+1 drop on the 6/12 to 8/16 doesn't make me puke first. /images/graemlins/smirk.gif Do any local clubs have these games with $3+1?

P.P.S. I am aware of the 10/20 at the Bike...kudos to you and Barbara for promoting that game.

[rkiray]

Sorry about being picky, but the last time I looked there was an entire county and a very large Marine base between LA county and Oceans 11.

[Leonardo]

Why cant a new club open? Do you mean in LA , or in the whole of California?

[J.A.Sucker]

The drops in the local games, 9/18 and lower aren't really too bad, since that money is live on the button, and this really allows you to play many hands on the button, which means that they are profitable for a reduced price. In other words, thinking that you're spending 3 bucks per hand is unreasonable; it's really much less than that. Jackpot rakes suck, but in the South Bay, the drops are fine. Really, even the jackpot games are fine, since the players are pretty bad. I would suspect that the games at this limit cost less per hour than at the Mirage and Bellagio, with their recently raised rakes.


Of course, I'd love lower drops, but it ain't gonna happen, and I'm Just Another Sucker.

[Rick Nebiolo]

Leonardo,

For a variety of legal reasons that I'm only partially familiar with, it is nearly impossible to get a license to open a new club within Los Angeles and Orange Counties. I'm not as sure regarding the rest of the state but in general it is very hard.

Of course, if you are building on an Indian reservation, well that is a different story.

Regards,

Rick

[Rick Nebiolo]

Dynasty and all reading this thread,

Here are a few more thoughts.

1) According to census data, at least twelve million people live within an hour’s drive of the major Los Angeles Card Clubs. There are few other legal gambling activities in this area (the Indian reservations are quite a long drive out from the center of the urban area).

I can’t prove it (since I can’t open my own place), but in my opinion the card club industry underperforms significantly. We should have many more customers given the popularity of poker. I think the biggest turn off for many unseen or rarely seen customers is that they don’t like to be ripped off. Taking $4 or $3 plus a $1 jackpot drop probably isn’t perceived as a rip-off by most when the jackpot is big and the pot contains many bets. But taking the full drop on a miniscule pot just has to grate on significant numbers of people. Some love poker so much or have so few social options they tolerate it. Others have largely taken a pass on the clubs and restrict their poker to home games or trips outside of the county. Their ghosts occupy the empty seats that can be found even at the Commerce in the middle of the afternoon or after 10:00 pm on a weekday.

2) The Commerce has many holdem games going at the 3/6, 4/8, 6/12 and 9/18 level (although they aren’t that strong at 6/12). If a game starts out with several tight players generated the full drop on blind steals, the tighter players disperse into the better games via table changes. So the predatory rake on no action rarely takes place on the floor. But it happens often enough to leave a sour taste in the mouth of much of their potential customer base, and there are certainly players who just can’t stomach playing there, despite the game selection and optimum location. If the Commerce jumped ahead with my progressive ideas first, they would rarely lose revenue on a per table basis, and it would help their table count. Once again, note that the Commerce isn’t that busy during the day when the more price conscious retired types like to play.

3) Let’s define a few terms using baseball analogies in honor of our beloved Red Sox:

Let’s assume clubs continue to take the jackpot drop on a flop (even though the Commerce and (I think) Hollywood Park takes it without a flop).

A “single” is changing the drop so it is collected only when there is a called post-flop bet. A modified drop of $1 (or even better 50 cents) is taken every hand.

A “double” is changing the drop so it is collected only when there is a called bet post flop. There is no modified drop.

A “triple” is changing the drop so it is collected $1 at a time (or perhaps $2 at a time in a green ($2) chip game) based on each called bet post flop. A modified drop of $1 or 50 cents is taken every hand.

A “home run” is changing the drop so it is collected $1 at a time based on each called bet post flop. There is no modified drop.

A “grand slam” is a “home run” with a reduction in the rake from $4 to $3 in the 6/12 and 8/16 holdem games.

Let’s be optimistic and assume I can “coach” the Bike into hitting a “triple”. What would happen to the Bike’s business?

First, word of the change would get out slowly. Most of the existing customer base that plays these limits in Los Angles is jackpot crazy and collection oblivious. However, many new customers would eventually trickle in because of this change. Business would start to grow. Because most of these new players would be a bit tighter, increase in hand speed would more than offset any “lost drops”. Because of the probably slow nature of improvement, you would need the complete support of management and ownership before proposing the Bike hit a triple. Getting that support is what I’m working on now.

Let’s assume after a year the Bike is doing better with more tables and similar revenue per hour per table. Maybe smaller clubs such as the Hustler also change. They do better too. Eventually even the Commerce, Hawaiian Gardens and Hollywood Park changes and perhaps one goes for the home run. Will this put the Bike back to square one? I would say not only is the answer no, but it is a resounding no!

If all the clubs came up with a better way to collect from small pots awareness of the change would eventually become widespread throughout the metro area. A tremendous number of new players would be added to the customer base. All clubs would easily start more games (especially earlier in the day), keep them going longer, and develop a better reputation. The poker pie would grow.

Since the games would probably tighten up a bit, studious low limit players would more easily develop skills that enable them to advance to the next level up. The upper end of jackpot would become a farm system for developing top section players. Currently, very few players earn their way (at least using poker income) up to top section. With more players in top section, the clubs can reduce or drop financially ruinous food comps and perhaps reduce the drop there too.

Hitting a triple or home run benefits the Bike, the industry, and the players. But to hit a grand slam the bases have to be loaded ;-).

All comments and especially criticisms are appreciated but in about an hour I’ll be offline for about 30 hours.

Regards,

Rick

[Tommy Angelo]

I've never had a fat bankroll and I've paid $500,000 in rake, and I'm just getting warmed up.

Naw, the rake ain't a big factor. It's the only factor.

"Would you change venues if you heard a new place opened where there was a button charge of $2 instead of $4"

No decision before its time. I would go to the new club, and check it out. Then, as usual, my decision as to where to play would be made immediately before each session. The phrase "change venues" smells of the same permanence that made me run away from the job market. That said, the games/food/behavior at the $2 joint would have to be way way way worse than the $4 joint to keep me away.


Tommy

[Aragorn]

I know there have been a couple of freezes on new clubs in state law over the past few years. Also the requirements for opening a club in a new city are REALLY tough.

A friend of mine tried to open a club in a So Cal city a number of years ago. They actually got the measure on the ballot and were leading in the polls. Then the existing clubs started spending money to defeat it, and it wasn't just limited to advertising.

They got the local DA to investigate my friend, probably by paying him. They found he had made a mistake on a loan application. Even though the lender agreed it was minor and wouldn't have affected his getting the loan approved, the DA prosecuted him for a FELONY for lying on a loan application. They quickly convicted him before the election and then spread this throughout the papers.

My friend didn't go to prison, but he not only lost the election but also his law license too. The folks running card rooms in California don't play fair and they are determined to squelch new card rooms.

[Aragorn]

Nice post. My experience is that casino and card-room operators are very short sighted. If you take the player's money too fast and don't give them value for the entertainment dollar, I always figure the players will do something else with their entertainment money.

But I have been consistently wrong about this in the past. No matter how much the house charges, no matter how rarely the player comes home a winner, they players seem to keep coming. I guess they get what they deserve (just like uninformed voters deserve the clowns in government).

I would only guess that high collections will continue to drive players to online games.

[Zeno]

“I don't need to fight
to prove I'm right
I don't need to be forgiven….”



So, Tommy, is the new boss the same as the old boss?


-Zeno

[Rick Nebiolo]

Aragorn,

You wrote: "Nice post. My experience is that casino and card-room operators are very short sighted. If you take the player's money too fast and don't give them value for the entertainment dollar, I always figure the players will do something else with their entertainment money."

I hope you get a chance to read my "More thoughts...." post elsewhere in this thread. In a nutshell, many potential players ARE doing something else with their money. The clubs aren't anywhere near as full as they could be in the mornings and afternoons. They operate at about 70% capacity weekday evenings. Most only fill up Friday night or when there is a big promotion or jackpot. This is appalling with so many millions living within driving distance of the clubs.

"But I have been consistently wrong about this in the past. No matter how much the house charges, no matter how rarely the player comes home a winner, they players seem to keep coming."

Competitors aren't allowed to freely open and with so few clubs serving such a large market (in the case of the Los Angeles metro area) the clubs can easily charge what they do. To be honest, if the Bike reduced its drop to $3 (from $4) in green chip holdem games (6/12 and 8/16) it would help increase business but the increase probably wouldn't make up for the lost revenue. That's why I'm focusing on convincing Bike management to reduce collections when the game is short and when the pot is small (assuming we find a legal way to do so). This will have a nominal impact on drop per hour per table for any given game and should increase business for the reasons stated elsewhere in this thread.

In other words, I have to focus on the achievable and I can't achieve anything without a job ;-).

"I would only guess that high collections will continue to drive players to online games."

I believe that online poker will help B&M by introducing many new players to competitive poker. But B&M management must recognize that players used to online might want the "real thing" but they don't like the idea of full drops in small pots, dealer mistakes, and ill-behaved or uncouth competitors, all of which aren’t a big factor online.

Regards,

Rick

[Rick Nebiolo]

Aragorn,

I lived in Cypress when a poker club went on the ballot to be built on the grounds of the Los Alamitos Racetrack (which is in Cypress). I saved the mail for and against and it evenutally made up a stack about two feet high. It was turned down by a 2 to 1 margin. Meanwhile, Hawaiian Gardens is right next door and now that they voted one in they (the club and town) are making a mint with their excellent location.

nist