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Old 10-11-2005, 04:24 AM
HesseJam HesseJam is offline
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Join Date: Sep 2004
Posts: 160
Default Re: Party CFO conversation: Trip report

short-term and looked at it statically - yes.

long-term and dynamically - no.

short-term, this means more rake. long-term this means more low-limit, low winning multitablers (because they tend to stay whereas the losers tend to leave) playing a robotic style and hampering the "Party Atmosphere" for the beginners. Dynamically, it is better to encourage moving up in limits to keep skills levels more balanced at each limit.

The math: Let's say the typical low limit (,5/1) table consists of 1 bonus-rb-bottom-feeder Pro (20000 hands per month, 4 BB/100), 2 semi pros (5000 hands/m, 2BB/100), 2 break even bonus hobby whores (1000 hands/m, 0 BB/100) and 5 fish who lose more or less badly (1000 hands /m, x BB/100). This is only hypothetical, I do not say that it is like that at Party) How big does the xBB/100 for the fish need to be?

Answer: Party rakes about 4BB/100 per player at .5/1. So the losers have to pay jointly 40 BB/100 (table rake) + 8 BB/100 (winnings) = 48 BB/100. In that example, you need 5 losers at about -10 BB/100 to make this work. If you calculate this for 20000 hands to accommodate the bottom feeder pro, you'll have to supply 8 semi pros, 40 break-even hobby whores and 100 fish to fill up for 20000 hands. For sake of simplicity and illustrative purposes, let's say the fish get frustrated easily which means you have to bring in 100 fresh fish EVERY MONTH to keep your table running. The winners/whores enjoy their income and stay.

Now come the dynamics: Over time either the average table changes or you need to set up more tables in the same configuration. Let's say the average table changes: One fish out of 100 works himself all the way up to pro status. You have now 2 pros, 2 semi pros, 2 whores and 4 losing fish. The losers now have to cover 52BB/100 among their foursome. This means, you'll need 80 fish now losing -13BB/100 to keep the table running.

Alternatively, if out of 100 fish 1 turned pro, 2 semi and 2 whores you'll need another table and second set of 100 fresh fish EVERY MONTH to keep the same quality of games.

This, of course, is only a hypothetical example to illustrate the dynamics. Note that it is less relevant how much exactly the winners win at the low levels. The effect of a loser sharing the rake burden with other losers now becoming a non-loser and thereby raising that burden is much greater. Also, the total amount of fish required is mainly a function of how many hands the multitabling pro plays.

Attracting new fish is very costly. This cost changes over time relatively to the stage of the poker product cycle. In the beginning of a craze it costs less, the more you are approaching the top, the more it costs. I guess currently the cost of attracting another 100 fish per month outweighs the additional income of the additional table by far.

The best way to alleviate these negative dynamics is creating room for winners at the lower tables so that you do not have to bring in so many more fish. The best way to create room is to have them move up in levels.
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