How much difference does rake mean to you???

[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