why do some rakebacks have sliding percentage scales

[playersare]

zoo,

in light of debate over per-hand earnings rates for bonus/reloads vs. rakeback (with utmost respect to both sides of the argument), I will try and calculate the dollar potential for both systems under a variety of betting limits and table conditions.

the purpose is to serve as an unbiased reference to all 2+2 members to determine if it is fiscally strategic to replace and/or supplement any whoring opportunities with the equivalent rakeback scheme, dependent on hands played/MGR per month, preferred chip limits and table layouts. the results will be posted in a variety of useful comparitive formats, such as earnings per-raked hand, BB/100 or actual $ per hour/table, 6-man vs. 10-man, MGR threshold req's and possible others should they come up.

the consensus in this board is that bonuses and reloads are probably more lucrative to low-limit and recreational players due to its pure advantage of superior per-hand raked payback percentage relative to their bankroll committment. however, at higher limits and/or high-volume of raked play per month, a rakeback can and may earn an aggregately greater amount of dollars spread out over a larger number of hands played per month, taking into consideration that the number of bonus/reload hands available to a full-time player to exploit on a percentage basis, may not be significant enough to pursue, particuarly if it means playing at a site which does not offer the same profitability in actual game play (BB/100) to justify the increased earnings per raked hand vs. straight rakeback.

to put one example into words, a high-stakes, high-volume full-time player may choose to earn $3000 in rakeback per month earning 10c per hand over 30,000 hands, rather than $1000 in bonuses and reloads which only require 5,000 to 7,000 hands (15c-20c per hand) as a low-stakes, whore-oriented player would. this same low-stakes player (let's say $1/2 limit) would only earn $200-300 in flat rakeback over the same period of 5000-7000 hands (now only about 5c per hand), because his rake revenue per pot (the portion eligible for rakeback) is only 50c-$1 vs. $2-3 for a high stakes game. this clearly illustrates how there is no definitely right or wrong answer regarding how one pursues his/her supplementary poker income.

there is obviously some line where the combination of limits and aggregate hands played per month (the second part being more important) where the rakeback will earn more total dollars than an equivalent scheme of bonuses and reloads. this of course assumes that all useful and/or desired higher-paying bonus opportunities for the month are already exhausted. this is what I'm going to try and figure out.

the primary thing that makes is difficult to accurately estimate true rakeback earnings on some affiliates is that the payment percentage varies in relation to the aggregate MGR for one billing period. it looks like half of the 'companies' that provide this service pay a flat rate on "any amount" of rake paid, while the other half (including some of the better-known brands) will rakeback higher percentages for high-volume accounts (>$1500-$2000) while only returning 5-10% for MGR's of $100-500.

this sliding scale system is not tied to a specific poker site (i.e. all Party + skins), rather it appears to be set up at the discretion of the individual affiliate. so I'm wondering if certain rakebackers pay on a sliding scale because they themselves are also paid on a sliding scale from the original poker site. while the 'scale' affiliates do generally pay a few percentage points higher than the 'any amount' structures at high MGR volumes, the monetary playing commitment required to acheieve the maximum rakeback does not necessarily seem to justify the slight benefits of this versus getting a flat rakeback % on any and all contributions.

any feedback on this and other rakeback concepts and theory (without naming actual names of course) is appreciated before I start crunching all the numbers.

[o0mr_bill0o]

well, personally... i think it's a silly argument because rakeback and bonuses are not mutually exclusive. so, I say: don't waste your time.

[playersare]

yeah thanks for your second wonderfully insightful response to me in as many tries (who's the one wasting time here?). maybe try answering some of my questions here in the context it was presented...opinions were for yesterday's threads, today we're looking for facts.

[Benholio]

The reason is simple. The affiliate does the same amount of work regardless of how often you play. As you play more and more, he is making more money from it, so can afford to give you back a bigger percentage.

Say you have 3 players, who generate in rakeback for the affiliate:

a: 3000
b: 300
c: 30

If the affiliate was getting 30% and giving back 25% to each player, he would make, $150, $15, and $1.50 off of the players. Why waste time with player C) for $1.50?

With a sliding scale, it evens these numbers out by raising the amount made from the lowest players and lowering the amount made from highest players.

[grinin]

The short answer is supply and demand. The bigger players (in terms of MGR) can command a higher percentage than the smaller players because affiliates will fight for their business.

There are basically the same fixed costs associated with each player, say for example $25 per month to service each player. If player A has a $200 MGR and Player B has a $2000 MGR, the affiliate is paid $60 and $600 for the two players by the poker room. If he pays 50% rake back then he is making $5 on player A and $275 on player B. Obviously what he would like, would be for Player A to sooner or later turn into a Player B, but those are few and far between. Also, many Player B's are not simply recreational players, they will demand a higher percentage and since the affiliate is making far more off Player B's to begin with he can afford to offer a better rate to these players.

There is time, effort and risk involved in running the affiliate business. It is probably not worth it to most affiliates for less than a $50 profit per account per month.

[playersare]

that makes sense - but then why do only half of the affiliates use the scale structure? the other half pay a flat rate of usually 15-20% (closer to 20%) for all levels of MGR. is it worth making a firm commitment of $1500-2000 a month just to squeeze an extra 2-5% out of the rakeback? that's at least 3000-5000 hands at the maximum $3 rake (pot size $60 or larger).

a recreational $1/2 limit player who plays 2000 hands a month raked 50c-$1 each (10-man) will only have $100-200 MGR reported - then it would be more advantageous to just take a flat 20% that many affiliates offer as opposed to a sliding scale which only pays them 5-10%, right?

I guess I might do a poll to see which type of rakeback structure the hardcore 2+2 regulars are using.

[bonanz]

really why the hell are you so interested about goddamn rakeback. you proved to yourself in another thread the mathematicaly superiority of bonuses to rakeback, why all this now? no affiliate is going to get specific about what they do or how or why they they offer different percentages etc. a large affil posted some specific numbers here before you ever graced this forum with your presence and the site wasn't very pleased about it and as far as i understand he no long offers rakeback.

so really, give the fox mulder of rakeback act a rest.
<font color="white"> i bet he'll respond that i wasted my time by posting, which i think is ironic </font>

[playersare]

mr. friends guy,

another "pro" player who is making way too much money online and needs to take time out of his busy schedule to put other people down who have no quarrel with him to begin with.

no one is investigating the business structure of actually being a rakebacker here. what I'd like to know is how people decide what kind of deal to set up for themselves as a rakeback consumer. I've read about 6 months worth of back threads on this subject, and while everyone has their opinion on what works best for them (you included, obviously), very little was offered in terms of specific earnings potential on a per-deal/per-hand basis. this is very unlike the way 2+2ers calculate and compare the numerous bonus &amp; whoring opportunities down to the penny per hour, BW style. the percentage of low limit players/whores who are inquiring here about rakeback opportunities vs. the lack of adequate, true-money responses generated I believe warrants a more precise study from someone with a similar background as them, as opposed to a longtime high-limit veteran who has little or no use for bonus hustling to begin with. if you have no interest in reading what I come up with, no one is forcing you.

if you have nothing nice to say here than perhaps you should return to your more noble pastures of tivo and pro wrestling. i pity your inability to let other people be themselves on a goddamn free internet message board.

[memphis57]

I'm pretty new here so it's probably not my place to say, but dam this site is weird about rakeback. For all the helpful info on other things there seems to be a conspiracy to hush any talk about rakeback. I guess there must be some history I don't know about.

Anyhow, kudos to playersare for trying. On your specific question here, I'd say the more pertinent question is why do some affiliates offer fixed rate deals, the sliders are easy to understand. And I'd speculate the answer is kind of like banks and required minimum balances for checking accounts. Some banks offer free checking, no minimum balance accounts, and they often get a lot of high balance accounts from people who just don't want to worry about their balance dropping for a day or two, and who think it sounds more fair. But they also get some super low balance accounts that are clearly money losers. It's just a matter of marketing strategy, and either way can be profitable if you manage it right.

So the fixed rate rakeback guys probably sign up some moneylosers but they also get their share of people who start out small and grow big and stick with them. Just a marketing choice, IMHO. And the fixed rate deals don't top out at 20%, BTW, I found one that pays 25%, the same as the best sliding scale deal I could find.

On questions of fact, I'd like to hear more about how rakeback and bonuses work together. Someone said most deals deduct the bonus from the rakeback? Exactly how does this work, and are you talking about the bonus that the affiliates pay or the bonus the sites pay or both?

For the record, I think I differ with playersare on his conclusions. In my case, at least, I think I would have been better off with rakeback, depending on how much bonus I would have had to give up to get the rakeback. I signed up thru an affiliate for Party and Pacific and got $100 bonuses for each site from them on top of the sites first deposit bonuses. But then I went on to play 20,000 hands in the first 6 weeks (0.50/1), which is more than I'll probably play per 6 week period going forward but it was new and fun and so I played every spare moment. Assuming I still got to keep the various reload and deposit bonuses (another $400 or so), I think I would have come out ahead with rakeback instead of the affiliate cash bonuses. Playersare, if you can figure out how much rakeback would have reduced those bonus numbers, maybe you can plug those numbers into your calcs - I don't think they're too unusual for a lot of first time players who wind up playing a lot more than they had planned.

[Benholio]

[ QUOTE ]
I'm pretty new here so it's probably not my place to say, but dam this site is weird about rakeback. For all the helpful info on other things there seems to be a conspiracy to hush any talk about rakeback. I guess there must be some history I don't know about.

[/ QUOTE ]

It is this way because otherwise this forum (and/or others) would be nothing but affiliate/rakeback spam.