Where does all this money come from?

[Big Limpin']

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5% big-winners/5% modest winners/80% modest losers(the rake)/5% worse than modest losers/5% big losers(compulsive gamblers)...FWIW

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That was phrased well. Can we model it as a bell curve, you think?

...and great idea to start a thread Sam

I'm thinking a bell centered at 0 in a rakeless/vigless game. Then, drop in a vertical line to represent the "break even" point when the games' fees are accounted for. The population of the overall winners (big and small) would be small (<10% from your #'s). Of this subset, smaller still are the number of "big winners".

And here's what else you could see is at the loser's end of the bell, there aren't that many "big donators". Theres a few, as somone said, the true compulsive gamblers, drunks, etc.. but most of the influx of money comes from the large population of small losers (take the integral of curve). Thats is, the guys who make cashouts sometimes too, they are just slightly below trading water. EV=-$2/hr or something.

So, on the larger question of the original post, i feel that most of the SnG profit cashouts come from the mutitude of ROI= -5. -10, -15...
Just as a huge ROI is difficult, a very bad one is unlikely too. -100% if you NEVER won, but i doubt there are many below -50%. We all get run over by the cards sometimes.

The house takes its cut, and the new money begins to filter its way up the food supply. Some is being cashed out, and more vig is paid. The pro's take what comes out the top. But whats key, is that theres a constant influx of fresh money.

The house wins, a minority of players win, and the majority of players chip in to pay for it all.

[skipperbob]

I could be easily convinced that the # of big winners is very small....Entirely possible that the house takes it all.
Absolutely impossible to be these B&M games, such as $3/$6 hold'em where $150/hr goes off the table (not counting the over-tipping of cocktail waitresses)

[DougL]

This kind of reminds me of Jackpot Jay's columns. He counted his 10K WPT buyin as profit even as a dead money player in the event. If I take my "winnings" from the $22 SNGs and plan to use them to buy in to WPT qualifiers and the like, am I really a winner? It would be about as good an investment to tip a waitress really well as to go to a 10K buy-in. Zero return for me either way.

[Big Limpin']

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I Entirely possible that the house takes it all.


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Welll, of course, no, as i and many others can attest to. But certainly the house must get half of the profits. At least. Two-thirds? 90%? yeah maybe, sure. But the greatest thing about the house, which we are all secretly jealous of is.......

ZERO VARIANCE !!!

(i might as well just mail them in a cheque for my vig fees every month.)

[img]/images/graemlins/grin.gif[/img] [img]/images/graemlins/grin.gif[/img] [img]/images/graemlins/blush.gif[/img] [img]/images/graemlins/mad.gif[/img]

[Big Limpin']

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It would be about as good an investment to tip a waitress really well as to go to a 10K buy-in. Zero return for me either way.

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Hillarious.
Must be the wrong kind of "waitresses" [img]/images/graemlins/wink.gif[/img]

[TomCollins]

The winning players at lower liimts usually move up too fast and get eaten alive. They then take it from the small stakes players and repeat the process.

1000 people losing $100 adds up fast.

[(my name it is) Sam Hall]

Thanks everyone for the input. You've made me think that even if, at the time when I consider my monetary results statistically significant, I find myself to be a small-time loser, I've gotten a truckload of entertainment for cheap. If it turns out I'm a modest winner, then people are paying a small fee for the privilage of playing with me. Either way, the sites win, and it's still cheaper entertainment than a $65 ski pass.

Sam

[wulfheir]

Me. I dropped $250 (five $50 deposits) at party poker after I saw poker on TV. Then I learned how to play and now I win.

[gazarsgo]

I don't think so. Moderate/normal losing players will play more SNGs than they will put time in at a ring game because you easily lose more than a buyin for a $5 or $10 SNG on most hands at .5/1. The more extreme players, IMO, will tend towards cash games as they live for the rush of an upward swing of variance.

[ChrisV]

The amount of money involved is pretty staggering to me sometimes. Consider this: suppose a new $215 SNG starts every three minutes on average. Then there are 20 of them run every hour, or 480 a day. Ignoring rakeback, the site collects 10*15 = 150 in vig from each tourney, which gives the somewhat staggering figure of $72,000, every day, just on $200 tourneys. That's 72 grand that somebody has to pony up every day before any of us playing the $200's even start to make our share. Party Poker made half a billion dollars last year.

It seems like a lot, until you look up some other figures and discover that in, say, 1995, net gambling profits in the United States totalled 40 billion dollars. This on house games at which it is impossible to turn a profit. So half a billion on games which offer the punter the chance to actually win is not that large a sum.