Sunday, January 25, 2009

The Invisible Hand

We don’t live in an ideal world. In the world of physics, most concepts are taught from within the artificial confines of a frictionless environment. It’s a smart way to eliminate minor effects from the overall behavior of a system. Only when the time comes to model real-world events does friction enter the equation.

Poker is similar. Ideally, poker is a zero-sum game. I win a pot, you lose a pot. Your chips go from your stack to mine in an equal but opposite reaction. Well, almost. Poker has friction. The little bit of energy generated by the transaction. You know it as rake.

If the pot is big enough, you barely notice it. What’s a few dollars to the house when you double up through some moron? If the dealers are savvy enough, you barely notice them reach into the pot, remove part of it, and place it into the drop. Online poker does it too. It’s usually the last thing you’ll notice on a hand history.

The poker population is skewed. Several sources claim that the winners are outnumbered by the losers by a factor of 9 to 1. Part of that reason is the rake. Many break-even players and small losers would find themselves winners in an ideal, frictionless environment.

Here are some statistics just for a frame of reference.

I’ve been playing some PLO8 on FullTilt, small stakes, only a $25 buy-in game. In the last month or so, I’ve logged 13,099 hands.

Amount won: $293.40 for a 4.48 PTBB/100 win rate.
During that same time, thanks to having 27% rakeback, I’ve received $144.57 for my efforts. My winnings, which are modest, are only 2x the amount I received via rakeback. Now, in reality, my contribution to the rake is nearly 4x that amount (1/.27 = 3.7) If there were no rake, I’d be up a much larger amount. That’s a serious amount of friction for any player to overcome. Few people recognize it and few do anything about it.

Now, just to be clear, I understand rake has its place. It’s not easy to set up a poker game, online or live. I host enough home games to know that providing the environment for a fun, successful game is work. It’s a service, and people are willing to pay for it. But if you ever think seriously enough about the setting you’re playing in, you’ll realize that the invisible opponent at the table is perhaps the one most difficult to beat.

7 comments:

pokerpeaker said...

it is for this reason that I hesitate to support legalizing online poker because I think the government would tax the shit out of it, and I would probably at that point become a losing player. I want the UIEGA gone, but I don't necessarily want online poker taxed, either.

OES said...

I am a slightly productive player who definitely would be better off without rake. However, despite all the shitty beats and complaints about rake, I gotta feel grateful for the opportunity of rakeback and also that Full Tilt runs a pretty good business.

Anonymous said...

What's the real deal on getting rakeback from FT if you are already a player?

I've heard two conflicting accounts:

1) Just tell them you want it, and under some secret program they will give you rakeback

or

2) Create a new account somehow under one of the rakeback sites.

If you go option #2, then how do you get the money out? Do you just transfer/lose it to your old account?

BadBlood said...

Anonymous - I went with option #1. There was a thread at 2+2 forums indicating which email address at Full Tilt you'd use to ask them for rakeback via rakebackpros.com. Do a search at that site and it should give you the correct details.

Option #2 will only get your accounts locked.

Anonymous said...

Thanks!

Not really anonymous, of course, I was the guy that bought you a beer in Vegas and would probably still hire you if you could move to Philly!

-JP

poker boy said...

Yea I'm not sure I'd be better off without rakebacks either. Kind of a catch-22.

Top said...

Poker games are the popular games and nowadays many people made it as a business to earn cash. Pokers are getting popular than other games and need some more skills as an invisible hand to make it as a luck for you.

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