The more rake, the better. What if this is true? Let's try to figure it out.
Recently, GGPoker raised the rake at high-stakes games, and the high-stakes regulars staged a boycott in response.
I myself played high stakes for many years, then ran an online poker room, so I have a lot of thoughts on this topic. I will share my guesses as to why GG decided to take this step at all, and I will tell you how the rake affects the action and win rates. I must say right away that with this step GG scared me very much.
When I first saw the table, what shocked me was not that they raised the rake so much, but how huge it was before. I had no idea about this since I never played on GG. 7bb/100 is an outrageous rake, but 4 is also completely insane. Especially when compared to the rake in other rooms where I used to play high stakes myself. But interestingly, even with such a rake, there was a lot of action on GG, so the system still worked. I think this is one of the main reasons why GG decided to increase it even more in the first place.
To counter the changes, the regulars organized a boycott. This is not the first poker protest, but as far as I remember, they have never been successful. The main problem is that there haven't been enough players in past protests. And in poker, there is no union, so it is almost impossible to unite such a large group of people who do not know each other. Now, according to the organizers, 90 high-stakes regulars are participating in the boycott. This is a decent amount of players, and in the high-stakes community, everyone knows each other, if not directly, then through friends. Therefore, in this case, there are chances that the boycott will continue for a really significant time and will not die out on its own, as in the past.
However, I'm still pessimistic. All of these players have already played on GG with 10 times the rake of their competitors. I think that for GG this is an argument that they will not want to fight forever on principle, otherwise, they would have stopped playing with a much higher rake than anywhere else long ago. Previously, the regulars were happy with everything, because even in such conditions they played at +EV. And GG seems to have assumed that with the new rake, their high-stakes games will still remain the most profitable online, and the regulars will continue to play quietly.
I’ll tell you how important high-stakes games are for the room. Obviously, in absolute terms, high-stakes players pay more rake, even on Stars. But in BB/100 at the micros, the rake is much higher, and there it is quite outrageous. However, this does not seem to affect the action, as the lineups are so weak there. The more expensive the game, the more difficult the lineups. No one can win 20bb/100 at high stakes, but at the micros, these are quite achievable win rates without taking into account the rake. I know from people close to the industry that, for example, Full Tilt and PokerStars did not make any profit at all from the most expensive tables, they considered them only as marketing expenses.
It would seem that the 10 most expensive tables do not require any costs – it's still some kind of additional income. But not everything is so simple. Rooms pay a fee for all deposits, and the larger the amount, the higher the fee. But more importantly, high-stakes players have higher demands on customer support and security. Stars spent a lot of money to ensure the fairness of the game, and the lion's share of these expenses went to high-stakes maintenance. In many of the largest rooms, there are no high-stakes tables at all now, they just removed all of the games more expensive than $5/$10. The explanation is simple – an expensive game does not bring them any profit.
Sometimes such decisions by large companies are explained by the fact that not the smartest people are in management, and they simply did not calculate the consequences. I'm afraid that is not the case here. From what I know about GG management, they think about their decisions very carefully and they always have a plan.
What is GG trying to achieve? I can only guess. Again, they have seen that regulars are willing to pay much higher rake than their competitors. Another feature of GG is the rakeback system. I am not a fan of such a system, but the bottom line is that the losing players received much more back. The room takes a huge rake but then returns a significant part to the players and this, in turn, generates even more play. I admit that this approach can be better than setting a small initial rake. Let me remind you that 10 years ago, the grinders who played the most received the maximum rakeback. It was for these players that statuses like SuperNova Elite and all loyalty programs were designed. It is clear that amateurs in such conditions received almost nothing. Now all the rooms have understood how important it is to maintain the action.
My other fear is that with this rake increase, GG just wants to get all the regulars off the expensive tables. For amateurs, the lineups will improve, and even with a higher rake, they will lose less than before. But it is far from certain that this will actually happen, so GG cannot directly bank on this.
Does GG want to improve conditions for amateurs? I think so. But their main goal is to get more profit for themselves. But I still don't really understand why they raised the rake so drastically. Either they are trying to squeeze out the regulars with high stakes, as I said, or they are testing the waters.
I will show you how rake affects win rates with concrete examples. Consider a 6-max table with one amateur who is losing 30bb/100. Here's what happened before the rake hike:
It should be pointed out that this is a fictional scenario, I did not do any analysis of the action on GG.
And this is how this table will look with the new rake.
It is clear that this is simply unprofitable for the regulars, and such a game will not come together. The main question is what does GG want to achieve? I think the ideal scenario for them is three amateurs and three regs.
The lineup has improved noticeably, which is why the losing players lose less. Another plus is that at such a table they will often make the right decisions, and play better hands, which in general will positively affect their thoughts on the game. For simplicity, I do not take into account rakeback here at all.
Here is another profitable scenario for GG – four amateurs and two regulars.
Amateurs lose even less, and regulars have a decent win rate. But this is a very unlikely scenario since other regulars will not let such a table come together. If GG doesn't cancel the rake increase, there's more chance of seeing a 3v3 game. But in order for the changes not to affect the amount of action, amateurs are needed. I think GG hopes that the new rake will attract more amateurs, as their loss rates will decrease, and there will also be fewer professionals.
Again, one cannot rule out the possibility that GG wants to get rid of the pros altogether.
At a table of six amateurs, no one will win or lose much, and deposits will slowly grind into rake.
Let me remind you that I am not saying that it will or should be like this. I'm just guessing what GG's motives could be here.
In the end, it all boils down to two questions:
1. Will the new conditions attract more amateurs if they lose less?
2. How will the professionals react? Understandably, the changes upset them. But will they be able to resist if they see lineups where even with such a rake it will be +EV for them?
Five years ago, GG would hardly have decided on such changes, because their position in the market was not yet so dominant. But right now they just don't have any high-stakes competitors.
In recent years, it seems to me more and more often that online poker is gradually turning into a casino. There are more and more games where no one wins, but they are fun, so they attract newcomers. I will not lie, I am saddened by such trends.
My main fear is that GG will be right – there will be less or no regulars for high stakes, and this will lead to an increase in their income. This opens a window of opportunity for other rooms. Will they be able to lure the high rollers to them? Moreover, regulars alone will not be enough, amateurs should also follow them.
I have always believed that winning players are needed in poker. Some people play because they want to gamble, but a lot of people come to poker because they dream of becoming professionals. They believe that the game can be beaten in the long run.
Imagine that GG succeeded. For the next five years, only amateurs play high stakes, the room’s profit has grown, and all professionals, like me, are recording videos about their past successes. It seems to me that over time this will lead to the fact that fewer and fewer players will come to poker due to the lack of success stories. They will simply have nothing to strive for. That is, in the next few years, GG will be sure that their calculations turned out to be correct, and when they realize that they were wrong, it will be too late.
PokerStars has been the undisputed leader in the industry for many years. Why didn't they raise the rake on high-stakes games? It's all about the personality of the person who ran the room – Isai Sheinberg. I often crossed paths with people who worked for him. Everyone says that he is a tough, sometimes stubborn, but very smart person. He was an unconditional authority for his subordinates and was very fond of poker. He wasn't a pro himself, but it was very important to him that the regulars won. He was sure that this was the essence of poker. Because of this, he often refused short-term additional benefits. It is no coincidence that all the scandalous changes at PokerStars occurred after he sold the company.
What does all this mean for the future of online poker? To be honest, I don't know. Let's see how GG will react to the boycott and what the high-stakes game will be like in two or three years. Someone said that GG took this step because they are experiencing financial problems. In my opinion, this is complete nonsense. It was a smart move that they saw as beneficial to their business. I strongly hope that they made a mistake here, and the departure of the regulars will negatively affect the game. But at the same time, I'm afraid they might be right.
Meanwhile, negotiations between the regulars and GG continue. On April 9th, "avr0ra" reported that GG had already offered an 80% rollback of the rake increase.
And the other day a big update on the situation at 2+2 was written by George Froggatt:
– VIP games sometimes assemble, but mostly amateurs participate in them. Of the regulars, almost everyone supports the boycott, but some players still fear the consequences. It's easier to name those who continue to play – Paulo Barbosa, Dario Sammartino, Paul Stren, Herna Monaco, Dalibor Lazarevic, Jan van Dijck, and guerrero19 (from Argentina).
For now, the boycott continues. I have to give credit to GG, their negotiation approach exceeded all my expectations. They really put in a lot of effort and time to listen and understand our point of view. Now we are working together to find a solution to make the action even bigger than before the changes.
Given such interest on their part, I highly doubt they planned to kill the high-stakes action. Most likely, they simply made a mistake somewhere in their calculations.
Separately, I would like to give Elky credit, he played a big role in communication between the community and the room.
Now we are waiting for a response from GG (ed. – the post was written on April 13 ), I hope we will receive it tonight.
Regardless of their final decision, I'm confident that as a result of our work together, online poker will be better than it was two weeks ago.
In addition to the rake, we had time to discuss other issues to improve the game, including the fight against tipsters and other types of fraud.
Honestly, these seven players who put their short-term EV above everything else do not get any sympathy from me. I think that in the long run, the negative effect of their actions will exceed the benefits that they will get during this time.
