Why Higher Rake Might Improve the Poker Economy

Steve Ruddock September 29, 2014

10 years ago if you had asked my opinion on higher rake in poker rooms and at online poker sites I would have told you it would be a terrible idea because the rake was already high enough. But now I would ask you what you intended to do with the additional rake you collect before dismissing the idea out of hand.

If you intend to simply bank the extra money, hire a sponsored pro, or line your investors’ pockets, than I think increasing the cost to play poker is a terrible idea.

If your intention is to turn around and use this additional rake to fund promotions and distribute money throughout the poker economy than I could get behind that idea.

This is the dissonance between what I’ll term “poker players” and “poker enthusiasts.” Poker players want the most favorable environment for themselves and are looking at every single margin no matter how small that margin is, whereas poker enthusiasts want the most favorable environment for the game and don’t really pay attention to small margins. Enthusiasts want the game to be fun and continue to grow.

So now I’ll say something a bit controversial: the rake might be too low in poker.

Not everywhere (in some places it’s too damn high!) but across the board, the current rake models in place allow for players to handily beat the game, especially when you factor in rakeback and VIP rewards. The problem is these players would still be able to handily beat the game if the rake was boosted just a bit (Or rewards were lessened) because the poker operators of the world would be able to use this additional money to make the games better (softer) and keep more players happy.

Yes, you’d pay more, but the games would be more beatable.

As counterintuitive as it sounds, a higher rake (not too high) might actually benefit you!

Let’s Increase The Number Of Satisfied Customers

What we have now is an industry where only a very small percentage of players are satisfied customers.

You have the 5% or so that are long-term winners, and you also have your poker lifers who lose or break even, but are perfectly content to do so.

This second group (along with all the bad players) has no interest in spending their days and nights studying in order to beat the game, they simply want to play to the best of their ability so they can either squeak out a tiny profit, or lose a lot less than the fish do and get their daily dose of entertainment in.

Setting aside these two groups (probably less than 25% of players), the bulk of the players leave poker dissatisfied. And I’m not talking about leaving a poker table dissatisfied, I mean leaving the game dissatisfied.

For these players, poker holds no further appeal.

They didn’t enjoy losing and they watched as the best players not only won all the money, but also reaped the lion’s share of the rewards offered by the sites (due to the current landscape that favors high-volume winning players) so they are disillusioned with the game.

But they never gave poker a proper chance. Throwing them a few dollars here and there might just be what they need to give the gamed a second chance.

These players don’t care if the card room takes $4 or $5 out of each pot (they like paying a jackpot drop because they might hit it) or if an online poker room caps their rake at $3 or $3.50 or $4. they see these amounts as insignificant.

Pro players know better, but these players don’t think that way. When they lose $500 they don’t blame the rake, they blame bad cards, bad luck, being cheated, or whatever else pops in their head.

The way to turn some of these jaded players into happy players (players who will support the game and advertise via word of mouth) is to keep them in action longer. The longer they play the more they will grow to enjoy the game and learn at least enough of the basic strategies to keep them from going broke in 30 minutes every session.

To these players a lump bonus of $50 is infinitely better than a $.50 break on rake each hand.

Redistribution Of Wealth

Yes, raising the rake to give money to losing players (via promotions and other means) is a lot like a government handout, but sometimes it works, and in the long run everyone benefits if its handled properly.

Does the U.S. government hand out too much money? Perhaps; I suppose that depends on your ideology.

Would we be better off as a society if the government didn’t handed out money? Absolutely not, unless you don’t mind shanty towns popping up, pandemics, and the other unfortunate results of a large swath of the population living in abject poverty.

This same basic principle holds true in poker. Sometimes the bad players need a little handout. Not too much, but just enough.

Online sites and card rooms need to pinch the “haves” a little in order to keep the “have nots” from drowning. One way to do this would be to raise the rake. And the “haves” (so long as they are not being pinched too hard) should see it as beneficial to everyone.

Improving The Poker Economy Top To Bottom

By putting the sites in control of how a certain percentage of the money changing hands in the poker economy is disbursed, they can improve the overall health of the poker economy. So instead of all of the money in poker funneling down to a small percentage of winning players the sites could redistribute some of the money to losing players, keeping them in action longer and making their experience more enjoyable, which should lead to more satisfied customers.

While the professional players would raise bloody hell at the idea of a rake increase (“These sites just continue to bleed us dry and now they want more!”) I’m positive that if the site’s and card rooms reinvested this added revenue the professionals would quickly understand how much easier their job would be when the games are better: meaning, filled with more bad players.

It’s a fine balance between the right amount of rake and too much, and it will turn some slightly winning players into losing players, but poker is bigger than the 5%-10% of players who are serious about the game. A good poker ecology requires happy fish and happy sharks, but we have to understand can’t make everyone happy.

It Takes Two To Tango

The problem of course is the poker community would be unlikely to trust the sites and card rooms to reinvest, and after years of running roughshod it would be very difficult (I wouldn’t want to be the first card room or online poker site to raise the rake) to just change course and tell the “poker players” their input is appreciated but the game is bigger than them.

If players are going to concede to paying a higher rake they better damn well see the sites use that money properly.

The sites and card rooms MUST spend this added money wisely, and in general I’m not sure we can count on that, based on the way poker is currently marketed and the types of promotions that are being run.

But that’s not the point here. The point here is to not dismiss every rake increase, or VIP change as an attack on the site’s “loyal” customers, and attempts to bleed the poker community dry.

A thriving poker economy is not one where the winning players slaughter the fish, but it is the sites and card rooms that could step in and help balance out the ecosystem to make sure the pond is always stocked with fat happy fish.

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