The Rake

[TTTT]

Since my first poker account I have always been shocked by the astronomically high rake that players have to play on the Internet. At the Bricks and Mortal cardrooms a rake in the 5% range is understandable but on the Internet this is absurd. With pokertracker I counted that I last months paid a rake in excess of $1200. It is time that all poker players wake up and start putting pressure on the gaming vendors. I rather buy an extra small car every year than donate it to Party Poker.

Fortunately things will change. I work as a portfolio manager for a mutual fund company in Europe. I watched the competitive dynamics change in many industries and a basic porter model will point to a conclusion that the competition is going to catch up even with the Internet poker world. Second and third tier sites are likely the first to cut rake as sign up bonuses are becoming a commodity and unlikely to bring on enough new users.

So how much low could the rake get? At work when we make complex trades at Nasdaq through a third party we pay 0.15% (or 15 bpts.) I would not be surprised to see us talking about these kinds of commission levels over time. The level of complexity of running a poker site is not really rocket science. Is it more complex than running servers for “counterstrike” or “command & conquer”. For the gaming service we pay a one time upfront license fee of maybe $50. Well the idea with this post was to start a discussion. I am fed up with paying $1200 a month for the service of Party Poker and others, truly they are not that good…