Why TAGs are undesirable

I am sick of hearing why TAGs are valuable. We suck as customers. This post will be the irrefutable proof.

Imagine a hypothetical NL pool of 10 players (I use NL only because it exaggerates the effect of skill, as contrasted with limit poker), each with a stack of $1000 in front of him. 9 of the players are morons. 1 of the players is excellent. The morons push preflop on inadequate values, draw when they shouldnt, etc; the TAG plays well and gets his money in only when it makes sense.

How many hands will it take before the TAG has all the money? Let's hypothetically say in 500 hands this will happen (the players are real morons). Party's take: 500 x $3.00 = $1500 in rake paid.

Now suppose that the players are of more or less equal skill and that no player has an edge. To the extent that one player wins a given hand, he is just as likely to lose it back the next hand. Money flows between players are random. Under this situation, the money theoretically goes back and forth between the players--say 3333 hands--until Party has it all due to rake. Party's take = 3333 x $3 = $9,999

Conclusion: TAGs are undesirable players because they reduce the number of hands that fish can survive. Instead of passing money back and forth and re-raking it until nothing remains (Party: $9999, players $0), the TAG captures this profit by taking the money out of the pool available to be raked by Party (Party: $1500, players $8500, monkeys $0.00)

The fewer hands that fish can play, the smaller the rake for Party. Thus, TAGs create huge marketing costs for Party because they are constantly depleting the pool.

The logic of this proof is inescapable.

That is all.

[beeyjay]

you forgot that in reality nothing is this black and white.

Of course not. I was demonstrating the underlying concept for why TAGs are bad.

Players are annuities. Their value is equal to the sum of all future rake paid.

If you hold the total amount of money in the poker universe constant/finite (e.g., the sum of all players' bankrolls), it is an inescapable fact that skilled players will bust unskilled players in fewer hands, compared with the number of hands that would be played if the game were only between equally unskilled players.

Because unskilled players will participate in a smaller number of hands due to the effect of TAGs, their annuitized value is lower.

[DavidC]

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you forgot that in reality nothing is this black and white.

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Dumb response to a good post.

[Wabby]

You are calculating the situation where there are ten fish at one table.

How about the situation where there are ten fish on TEN tables each with 9 sharks.

The fish may last only 250 hands.

That gives Party the rake of 2500 hands = 7500.

The sharks share 2500.

And the key is that all this were accomplished in one day. Tomorrow the fish will come back with more money.

This arguement fails based on the distinction between fish and shark.

Suppose all the sharks leave a fish pond. Are there still sharks in the pond? Yes, of course. Why? because those that used to be fish are now at the top of the food chain. They are now the sharks.

Likewise, suppose a group of big sharks enters a pond, the previous sharks (ie the small sharks) are now "the fish".

[jrz1972]

You also forgot that multitabling TAGs keep some tables going that would not exist otherwise, thereby generating more rake for the site.

Nice try though.

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You also forgot that multitabling TAGs keep some tables going that would not exist otherwise, thereby generating more rake for the site.

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Hold the amount of money in the poker universe constant and your logic fails. Even if a table falls apart, a new table will form eventually. Then we're back at the question of how many hands can get played before the players are broke?

Additionally, the "TAGs keep tables going" argument doesnt really work in a network this large. The fact is that the Party network is so liquid that it survives just fine without the presence of TAGs. (Witness the fact that they're doing fine despite the split.) Your argument might have some merit in an illiquid market like Prima.

As an aside/metaphor, consider whether the NYSE or AMEX need to employ specialists to maintain market liquidity, or whether market transactions can occur perfectly well w/out a specialist (a la NASDAQ).

[jrz1972]

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Hold the amount of money in the poker universe constant

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There's part of your problem right there.

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Hold the amount of money in the poker universe constant

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There's part of your problem right there.

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I agree that this is a simplifying assumption. But it's also not entirely off.

Poker cannot grow at double-digit rates ad infinitum, so we know that poker bankrolls are finite at some point.

More to the point, in order to "grow" the poker economy, Party needs to hire Mike Sexton, buy spots on the WPT, give away bonuses, etc. All of these customer acquisition and retention costs come off the bottom line.

So to the extent that TAGs require Party to spend more money on marketing, they reduce the bottom line. This is why we are undesirable.