More Poker Now info (Party poker puts the hammer down)

[Vern]

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Vern you seem to know what your talking about pretty good. I agree with most everything you said, however, the poker rooms to make tons of money. I worked for AMvets that ran a poker game, tons of money, its not break even, they could afford to charge lots less, but none the less its not nearly as outrageous as online rake.

They are making something like 135$ per hour per table

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But in the space of a poker table they could run two blackjack tables, a roulette or craps table or about 8 slot machines. Money per sq/ft for poker is one of the lowest in the casino. Many casinos that were designed before the latest boom have had to scramble to find space or make space for additional tables because of the boom. All told, casions would be much happier of there were a roulette or craps machine boom than a poker boom. [img]/images/graemlins/smile.gif[/img]

[The Truth]

Also note that online players are playing more hands per hour, and more tables. Thus 1 player could end paying 100k a year easy.

Also, Live action B&M rake is way higher than it should be as well. However, B&M casinos make sick amounts of money on table games and rooms etc they dont have to worry about losing the income on the poker games, plus they have a monopoly, legal issues make it hard even if someone was willing to undercut the casinos as far as price goes. These online poker rooms are cheap to run, and someone will be willing to run one for much less. People are running them for much less. If they diddnt rake the tables, you just paid a set fee, say at the end of the year for your total play, EVERYONE would play at the no rake monthly fee sites. When you REALIZE that you are paying 3000%(not an arbitrary number, but how much more I am paying) more to play on these party skins. Its like when you go buy a steak, do you want to go to the place charging 3000 for the steak, or the place charging 30? Its just the way they charge they rake makes it thougher to tell how much you are paying, and the average conusmer isn't smart enough to realize it.

[Vern]

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Online Poker, without the expenses of B&M has a much larger profit margin and much greater efficiency.

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You make a solid point here.

But what about all the extra expenses for the B&M player? Tokes for the dealer, gas, etc.

I won't pretend that I know how all the math would work out, but it's important to remember that both online sites and their players save more expense money than their B&M counterparts.

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You are more than correct, the online sites are neither dumb nor greedy, they are just good business operations charging what the market will bear. Regardless, we will pay it to play with the players who don't care about rake in the first place. I look forward to a rake competition which is what capitalism should dictate so that the most efficieny business model prevails, but I don't think that is going to happen anytime soon because a new site cannot market effectively in the US anymore.

Sorry for the thread hijack.

Vern

[The Truth]

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[ QUOTE ]
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Online Poker, without the expenses of B&M has a much larger profit margin and much greater efficiency.

[/ QUOTE ]

You make a solid point here.

But what about all the extra expenses for the B&M player? Tokes for the dealer, gas, etc.

I won't pretend that I know how all the math would work out, but it's important to remember that both online sites and their players save more expense money than their B&M counterparts.

[/ QUOTE ]

You are more than correct, the online sites are neither dumb nor greedy, they are just good business operations charging what the market will bear. Regardless, we will pay it to play with the players who don't care about rake in the first place. I look forward to a rake competition which is what capitalism should dictate so that the most efficieny business model prevails, but I don't think that is going to happen anytime soon because a new site cannot market effectively in the US anymore.

Sorry for the thread hijack.

Vern

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If the party skins decide to start charge 1BB for rake at every limit, including 15-30, that would be 30 dollars per hand, the fish would still play there, so would you? of course not. I know this is a little on the extreme, but they are on the extreme end too.

[Jack of Arcades]

Price is not set by the cost of production, its's set by supply and demand. This is capitalism 101. The rake is reasonable because people are willing to pay it.

[Uglyowl]

When your company goes public and therefore owned by the masses instead of a small group, many things change. I couldn't believe the stuff we had to go through when our small privately owned company was bought by a larger public company.

Don't know the specifics of a gaming industry company, but I am positive there is huge changes that need to be made to make everything "acceptable".

[eugeneel360]

very interesting, where did the 1st poster get that info from?

as opposed to pokernow and empire, Eurobet has more rights and would not have to face a simiar situation.

[The Truth]

I cant wait to short-sell party.

[Vern]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Online Poker, without the expenses of B&M has a much larger profit margin and much greater efficiency.

[/ QUOTE ]

You make a solid point here.

But what about all the extra expenses for the B&M player? Tokes for the dealer, gas, etc.

I won't pretend that I know how all the math would work out, but it's important to remember that both online sites and their players save more expense money than their B&M counterparts.

[/ QUOTE ]

You are more than correct, the online sites are neither dumb nor greedy, they are just good business operations charging what the market will bear. Regardless, we will pay it to play with the players who don't care about rake in the first place. I look forward to a rake competition which is what capitalism should dictate so that the most efficieny business model prevails, but I don't think that is going to happen anytime soon because a new site cannot market effectively in the US anymore.

Sorry for the thread hijack.

Vern

[/ QUOTE ]

If the party skins decide to start charge 1BB for rake at every limit, including 15-30, that would be 30 dollars per hand, the fish would still play there, so would you? of course not. I know this is a little on the extreme, but they are on the extreme end too.

[/ QUOTE ]

It depends. If party started charing 1BB of rake, but my win rate after that 1BB was higher at Party than any other place, I would still play at Party. I wouldn't be happy, but my ultimate consideration is, after rake, where can I make the most $/Hr. If Party charged 1BB a hand, but I had 9 opponents who were 70+ VPIP, all sub 5 PFR and sub 1 AFGF, I would stay in that seat forever. The rake is irrelevant as a sole deciding factor. It merely weighs into a more complete equation where the number of weak skilled opponents has the most weight.

Win Rate = ($/HR as a function of opponent strength) - (Effect of rake)

I will play at the site that offers me the best win rate once I solve this equation.

Vern

P.S. This is why at Party I either play .5/1 or 2/4 but not $1/2. $1/2 full is just a game with similar opponents and higher rake than at Stars or UB. $1/2 6max as Party is a gold mine.

I notice a distinct lack of comment from the rakeback affiliates so here's my two cents. Some of this may have been said so apologies for any repetition

Firstly whatever iGlobalMedia have planned, I think it's disgusting for them to start with PokerNOW.
If they have such an issue they should have done all the skins at once and prepared an email for them to send out to all affiliates regarding rakeback.

The issue is that IGM are annoyed (to put it mildly) at players who sign up with other skins to get rakeback.

The problem is really 2 fold and both of them are IGM's fault

1) They should punish people who have more than one account with iGlobal (as it contravenes the terms n conditions that players sign). But how do they punish a player? Ban them! But then that means no revenue so they won’t do that!)

2) Party should offer rakeback and stop messing about with gift certificates. They could easily offer the most lucrative deals in the market. They have been burying their heads in the sand about this for ages. They have allowed and still are allowing rakeback affiliates to offer rakeback via gift certificates. The certificates are exchangeable 100% for chips at the site, which you can immediately cash out so it’s, like giving cash rakeback anyhow. Double standards I think.

So the first question is who will stay with Party skins and who will go?
My theory is that any player who has tasted the sweet fruit that is rakeback will continue to want rakeback. With the average committed player earning $500 a month, $6K a year is not to be sneezed at. Any high volume player will surely go as then we're talking $25k+ a year which will send the kids to school for a while and pay for all the family holidays in a year.

Smaller players will probably stay because $20 a month rebate isn't the be all and end all for them...but the prospect of picking up the bad beat jackpot etc. is a good one.
I have no idea how many players there are who currently receive rakeback from Party Skins but it must be a lot.

And what about income for Party?
(If I'm teaching my grandmother to suck eggs, apologies)
The current situation is this. PokerNOW, Empire et al, all pay a fee to IGM to lease the software. This is typically between 15-25% of rake (depending on the size of the room) So IGM have already got a chunk of any player's revenue regardless which skin they play at. The skins then offer 20-30% to their affiliates (regardless of whether they are rakeback affiliates or normal ones). Don’t forget most skins also pay for cage services…the people who sort out the credit card and support issues…another 25-30% can go here…which leaves roughly 20-40 pct for the skin. This is probably higher for someone of Empire’s ilk who can provide a lot of this itself. But the point is IGM already takes a decent slice of the cake first off.

And if they stop rakeback?
The players who get it now will still want it. They will leave all party skins and like some of you have pointed out Crypto, Prima and the independents will benefit most.
So aren't they just cutting off their noses to spite their faces...or rather to spite PokerNOW's face?

IGM take in $750m-$1bn a year in rake and are talking about floating Party soon for Billions. If they care about their players so much why are the trying to prevent them from getting the best deal they can and if that involves signing up with an affiliate who chooses to give away their commission then what business is it of IGM's to stop them? Aren't they just hindering the little man trying to make a living playing poker?
The little man who they’re going to ask to buy shares in their company very soon!

That’s the end of the diatribe

Regards

RakeTheRake