Basic math

[StellarWind]

A lot of comments have been made that high-volume players aren't important because we only withdraw money from the system. I've been thinking about this.

We all know from painful experience that almost all pre-split ring tables had several high-volume players seated. No one can question that we are a big percentage of total volume regardless of how small a portion of the customer base we represent.

Past study of large PokerTracker databases taught me something very important. A comparative handful of extremely bad players lose almost all the money. These 65%+ VP$IP players lose over 10 BB/100. Ordinary bad players lose maybe 2 BB/100. I emphasize this because it refutes the argument that eliminating TAGs would somehow balance the games and allow the money to circle until it all flows down the rake drain. No matter how many TAGs you eliminate there will always be a huge disparity in player skill. The super-donators can't hold their own against nine sock puppets.

What would happen if the high-volume players all left?

1. Table count will drop sharply.

2. A new class of winners will emerge from the best of the rest. Because the disparity between awful players and decent players will remain huge, the new winners will win approximately as much per hand as the old winners did.

3. The total income of Party will be reduced in proportion to the reduced table count. The total income of winning players will also be reduced in proportion to the table account.

Conclusion: That's a lot of money for Party to lose. High-volume players are important to Party and every other site. The real issues are 1) what do they need to pay us to get us to stay and 2) are we demanding more than we are worth? 25% of revenue is a lot of money. It's the money that pays for the affiliate marketing program that supports the whole business.

I think Party needs to do something because otherwise they are the most expensive site in the industry. That isn't going to cut it with a mobile workforce that is only motivated by money.

Did you notice the W-word in the previous paragraph? That's right, we are not customers of Party. Despite appearance we actually work for them. We staff the big machine that entertains the real customers and extracts their money. In exchange we get to keep some of that money as our "salary".

This rakeback issue is actually a labor dispute about how much we should be paid.

[Hojglad]

I don't know that "basic math" is the proper title for this, but you bring up excellent points. Nice post. I especially agree about the "W" word.

[EvanJC]

good post. i'm getting pretty tired of reading about how losing multi-tabling sharks will have no real impact on partys bottom line.

Nice thought, Stellar, but let me ask you a question. If I created a poker site and populated it with 75%/2%/0.0 players, how much money would you PAY for the privilege of being allowed access to that pool? If you would pay me money for that, how can you call yourself a "worker"?

[jrobb83]

Great, great post.

[ QUOTE ]
The real issues are 1) what do they need to pay us to get us to stay and 2) are we demanding more than we are worth? 25% of revenue is a lot of money.

[/ QUOTE ]

Many sites offer 100% or more rakeback to attrack high volume players (which highlights how important poker rooms belive high volume players are). I don't think 25-30% at party is too much to ask even though the quality and availabilty of the games are much better than at other sites.

[StellarWind]

[ QUOTE ]
Nice thought, Stellar, but let me ask you a question. If I created a poker site and populated it with 75%/2%/0.0 players, how much money would you PAY for the privilege of being allowed access to that pool? If you would pay me money for that, how can you call yourself a "worker"?

[/ QUOTE ]
As long as I'm not depositing money I'm not paying. The important thing to realize is that no matter how many intermediate transactions you see, only two things are happening in the end:

1) I spend my time doing something that makes the poker site more profitable.

2) I withdraw large amounts of money on a regular basis.

That sure sounds to me like I work for them, at least from an economics perspective. Now they are trying to cut my pay and I am not happy about it. That's a labor dispute.

[sweetjazz]

Party offered me $250 if I accumulated ~5000 of their points between 10/5 and 10/31. So far I have accumulated about 2200, or 44% of what they require. In so doing, I have generated $925 of rake for them, according to PT.

If I hit exactly 5000 hands, then I will have generated about $2000 for Party in rake, of which I will have about 12.5% returned to me. Note that if I play less hands, I get 0% and if I play more, I get a declining percentage of my rake back. (Presumably, however, playing more would make me eligible for a bigger bonus the next month.)

If this is all that Party offers, players will have an opportunity to get about 8-10% of their rake back. That's not bad, but it's not clear whether the softer games make up for the fact that in the end, players will be paying more rake at Party than they will at sites which offer a rake back program (assuming comparable rake structures).

[ QUOTE ]
Nice thought, Stellar, but let me ask you a question. If I created a poker site and populated it with 75%/2%/0.0 players, how much money would you PAY for the privilege of being allowed access to that pool? If you would pay me money for that, how can you call yourself a "worker"?

[/ QUOTE ]

You don't get it at all, do you? Check out this thread:

Party Stock Report

In particular, this statement:
[ QUOTE ]
PartyGaming has published that in 2004 10% of the players account for 70% of
the rake

[/ QUOTE ]

I remember seeing this stat some time ago. I just couldn't remember where or else I would have quoted it in a few threads here over the last couple of days. 10% account for 70% of Party's revenue and people are arguing that multi-tabling TAGs are irrelevant. It's ridiculous.

[ QUOTE ]
10% account for 70% of Party's revenue and people are arguing that multi-tabling TAGs are irrelevant. It's ridiculous.

[/ QUOTE ]

I'm not arguing that they are irrelevant. I am, however, saying that they are not as desirable as fish. More to the point, every one of these outraged MTTAGs will go back to Party without rakeback, myself included.

[ QUOTE ]
[ QUOTE ]
10% account for 70% of Party's revenue and people are arguing that multi-tabling TAGs are irrelevant. It's ridiculous.

[/ QUOTE ]

I'm not arguing that they are irrelevant. I am, however, saying that they are not as desirable as fish. More to the point, every one of these outraged MTTAGs will go back to Party without rakeback, myself included.

[/ QUOTE ]

Not me.