[Cazz]

I don't think anyone on this thread has mentioned the
reason for the "no rat holing" rule. It is the
same reason that they have a minimum buy in:
to prevent a player from taking unfair advantage
of the all-in rule.

For an example take a 7 stud game with a
$1 ante and all bets at $5. I sit down
at a table with 6 other players and pull
out $1. If I am allowed to do this then
it will be profitable to me. I will get
to the showdown on every hand. I should
have the best hand 1/7 of the time. However,
since some players will fold before the showdown
when they would have made a better hand than me,
I am going to win more than 1 of 7 showdowns.
Clearly this is a +EV situation for me.

If I can put $6 in my pocket (rat hole) when I win
and pull out $1 when I lose, I can do this
on every hand. If I have $5 (or $10) in front of
me instead of $1, I still have an advantage but it is
usually not quite as large. I will have to decide
which hands are worth playing, but once I get
all in, I will get the advantage of other players
folding to betting on the side.

OK, now add a minimum buy-in of $50 and
only let me take money off the table
to get down to $50 and no less.
I can still abuse the all-in rule. Every
time I win, I cut my stack back to $50. When
I lose I let the stack stay small. By
doing this I will create more short stack
all-in situtations for me, which I think
I have shown is +EV.

When everyone else catches on that this is
a profittable play, then they should follow
suit to counteract my edge. The result will
be that the game will die. On average, everyone
will have about $25 in front of them (less when
you consider the rake) and no one will have
more than $50.