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The Limon Show No.42: PokerStars Stole My Cheese

Craig Posts: 671Administrator
edited November 2014 in The Limon Show podcast
Join Abe as he discusses poker economies and the latest announcements and controversy surrounding rake increases.

Episode posts at 2PM ET

http://www.crushlivepoker.com/pokerstars-stole-my-cheese
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  • GroundhogDayGroundhogDay Posts: 287Subscriber
    Can't wait to listen to it after work, especially after reading the 2+2 thread today... The one you tweeted out on Monday...

    Those guys were harsh on you in that post - don't know if you were able to address it in the pod-cast, but I will be listening to it soon

    http://forumserver.twoplustwo.com/29/news-views-gossip/petitiion-poker-hall-fame-rescind-its-induction-negreanu-1485661/

  • AbeLimonAbeLimon Posts: 860Member
    GroundhogDay said:
    Can't wait to listen to it after work, especially after reading the 2+2 thread today... The one you tweeted out on Monday...

    Those guys were harsh on you in that post - don't know if you were able to address it in the pod-cast, but I will be listening to it soon

    http://forumserver.twoplustwo.com/29/news-views-gossip/petitiion-poker-hall-fame-rescind-its-induction-negreanu-1485661/

    Wasn't too harsh. I like it. When you go stir up a hornets nest you should expect to get stung a couple times.
  • AbeLimonAbeLimon Posts: 860Member
    Good sleuthing !! Just jokes. Meta-reverse-reverse forum trolling.
  • CalgaryPokerGuy Posts: 342Subscriber
    Sorry for my attempt to derail your topic, I was driving when I called in and wasn't listening to the live podcast... I'll let you know when I climb out of my downswing! Cheers.
  • AbeLimonAbeLimon Posts: 860Member
    CalgaryPokerGuy said:
    Sorry for my attempt to derail your topic, I was driving when I called in and wasn't listening to the live podcast... I'll let you know when I climb out of my downswing! Cheers.
    no problem man. im pretty good at derailing my own topics! live plo can be brutal keep grinding!
  • RDF Posts: 183Member
    Rake increases hurt the 2+2 community, of which the majority play low stakes. That's why they complain about them. It's the same way you complain about how tourneys are killing cash games.

    "Fuck those whiners unless I'm the one whining!"

    Online vs live rake increases are different, but good insights RE live.
  • AbeLimonAbeLimon Posts: 860Member
    RDF said:
    Rake increases hurt the 2+2 community, of which the majority play low stakes. That's why they complain about them. It's the same way you complain about how tourneys are killing cash games.

    "Fuck those whiners unless I'm the one whining!"

    Online vs live rake increases are different, but good insights RE live.
    Its not remotely the same. Ill spell it out for you.

    The rake has always and will always go up at every individual card-room. We have the entire history of casino poker as proof. When a card room lowers rake that means theyre going out of business. Whining about it is stupid and pointless especially considering the casinos could care less what winning entry level poker players want and would rather they leave.

    Tournaments are nothing like they were in the past and they can be changed for the better. Even major tournament directors such as matt savage and mo have said the current tournament trajectory is untenable. Telling players they are stupid for wasting time in these monstrosities combined with the fact casinos wish to change the structures can and has worked in every players benefit. The casinos dont care that it helps cash pros but our priorities are aligned.
  • cheet Posts: 4Member
    edited November 2014
    Hi everyone, didn't have a chance to introduce myself on the show but I was the final caller talking about heads-up. My name is Jason, I've played primarily online (but significant live poker) for 10 years and was even briefly a reg at the Bike. Some random busto dude on twitter said my contribution was tantamount to whining for 30 minutes, didn't think I came off that way I really just wanted to give my insight on the issue. That being said, I wanted to expand on something I mentioned in my call and give some additional thoughts:

    Based on what I saw in the chat, it seemed like many listeners were not aware of the size of the heads-up world of online poker. There are MANY people who choose to sit at tables all day waiting for fish. In addition to that, there are actually many regulars who enjoy playing heads-up against other regulars in a match-up of skill and strategy much like two people face off in chess. While making money is the material factor for both players, it really is fun for a lot of people to play this form of poker, attempting to out-wit and dominate a competent opponent. I have played different forms of poker over my career (Full ring online, 6max online, full ring live, etc.) and this is the most fun I've ever had in the game. A lot of people compete to be dominant at heads-up, there's community and fandom around it, and for many people it's extremely profitable. Obviously the goal is to make money, but for me poker and the form I play it in is very enjoyable.

    This rake increase makes it's entirely impossible for many people to play against each other at lower stakes. If I believe I'm better than JoeBlow but only to the edge of 4bb/100, it is pointless for us to even play because we will both lose to the rake. At 2/4 and 4bb/100 would be equivalent to ~$100/hr if we were playing multiple tables (common), not a bad hourly! But with a ~6bb/100 rake, I'd be losing even if I was the better player. Luckily this doesn't kill me personally and luckily Full Tilt has held its reasonable rake structure for now. But when I say "it sucks", not only do I mean it sucks to lose tens of thousands of dollars per year (bravo to anyone who takes a pay cut and doesn't care about it), I also mean it's unfortunate to see a piece of this community die as this small/midstakes players and forced to resort to only playing vs those they have a considerable edge over greater than the rake (straight up fish).

    Limon's point is that as a result of this, there will be less regulars and therefore easier access to fish. For heads-up, I'm not so sure, I guess we'll just have to just wait and see. I can see that being true, I can also see everyone just tightening up their opponent selection and nothing really changing. No crystal balls here. It could be the case for 6-max and full ring, but I'm also not 100%. What I am sure of though, is that it's now harder for regulars to start games playing vs each other while waiting for fish to join. A lot of fish don't like the feeling of sitting at a empty or 1/6 table and seeing it instantly fill with pros. It's more favorable for them to join a game where two pros are already playing each other. For regulars, this is a great way to get in a good games. When I played 6max I always found the best games would start off me playing heads-up vs another pro first. However now for a lot of match-ups and stakes, this is a -EV thing for regulars to do. It's possible this leads to less games running overall. We'll see what happens.

    I'm not sure what kind and what amount of pros are good for a poker site. But there is some mixture of those things that makes poker sites continuously cater to their high-volume players via rakeback, marketing and liaison via twoplustwo, and more personalized customer service. I'm a net drain on these sites but there is some good reason they always are in contact wanting me to keep playing. Some sites have thought the answer to more money was to get rid of the pros. PartyPoker has been on the grind for 2 years now making insane changes that have drove the grinders away in herds. The result? A plummeting market share and stock price. No one wants to see this happen to PokerStars, the center and long-time friend of online poker. Oh and obviously, I don't expect anything from Negreanu other than his support for his sponsor but when he makes public statements calling PokerStars "the cheapest place to play online poker" and "the best rewards system" it's a straight up lie and insulting that he thinks we're to stupid to know otherwise all while championing his thoughts as "just calling it like it is".

    Limon's right that even if it kills your profit, crying does nothing and if you're a true professional you'll figure out a way to make money one when venue changes.

    I'll call a spade a spade though: sometimes it sucks ;)
  • AbeLimonAbeLimon Posts: 860Member
    Good points. Call in anytime.
  • RDF Posts: 183Member
    Yeah, Limon's argument that the small winning/breakeven players are bad for the poker site and the big winners are fine, just doesn't apply online. As evidence by the fact that PokerStars grew to a 5B company by catering to regs.

    Online, the shitty regs 10-tabling generate massive rake, and the top sharks are the ones cashing heaps out of the ecosystem. A poker site's goal is to churn the money as much as possible before it gets cashed out, and break-even regs are crucial for that.

    In live, it's more experience-focused and there's not as strong deposit/withdrawal dynamics. Online poker is more like a payment procesor where they want all the money to cycle around.

    And whining has a point: sometimes the company listens to feedback and reverts to before the change. Like BofA with their 5$ debit card fee. Everyone whined about the proposed change, and the company abandoned their plans (and the company was in the shitter at that time).
  • totsdtftotsdtf Posts: 156Subscriber
    if you're dependent on something as unreliable as what one poker website sets its rake at to make a living, maybe you should reconsider how you make a living.
  • AbeLimonAbeLimon Posts: 860Member
    edited November 2014
    totsdtf said:
    if you're dependent on something as unreliable as what one poker website sets its rake at to make a living, maybe you should reconsider how you make a living.
    yes. when i think back on my gaming life ive been in so many different places. card counter, advantage player, sports "bettor", investor, online player, live player, limit specialist, private game host, poker coach, no limit player, prop, golf "bettor", plo host, podcaster, etc etc. Each time I learn a new thing it becomes part of my advantage play portfolio. Even if it only brings in a few thousand a year it all adds up and makes life easier and less stressful.

    I like where im at now but it could all change tomorrow and id still make bank, this is what i try to impress upon the listeners. Be good at the poker game of life, focusing on some stupid metric that broke little kids thought up is a waste of time.

    Im not a fan of role models because its as limiting as it is inspiring but if you had to choose one in the poker/gaming industry it would be bobby baldwin and not the nosebleed baller of the month.

    Some will disagree because they are getting something out of the competition side of poker. I was there once, but it passes and you dont want to miss opportunities.
    by 1totsdtf
  • AbeLimonAbeLimon Posts: 860Member
    edited November 2014
    RDF said:
    Yeah, Limon's argument that the small winning/breakeven players are bad for the poker site and the big winners are fine, just doesn't apply online. As evidence by the fact that PokerStars grew to a 5B company by catering to regs.

    Online, the shitty regs 10-tabling generate massive rake, and the top sharks are the ones cashing heaps out of the ecosystem. A poker site's goal is to churn the money as much as possible before it gets cashed out, and break-even regs are crucial for that.
    This isnt the case, the idea i significant number of 10 tabling regs are exactly break even and deposit back all of their rakeback pay is illogical. Players who dont deposit generate NO RAKE. ducy? (this goes for Cheets reg wars example as well, the two regs generate No, additional, rake if they never deposit. The sites cant rake more than has been deposited). This is a fundamental misunderstanding of these economies live or online. The mass tablers accelerate the drop but they dont add to it. This acceleration has made the sites a lot of fast money but it is killing their business because rec players, DEPOSITORS, have, by and large, given up on online poker because they dont get enough bang for the buck.

    A winner can generate a depositor though if they offer the depositor something, like action available when they want it. This only happens at high stakes (relative to the room) or when a room first opens. at low relative stakes the games will run on their own or the room will go banko Ultimate style. It seems, These sites made a miscalculation with their rakeback deals thinking it would get DEPOSITORS to play more hands, It hasnt. apparently, theyve run the numbers and see the big rakeback players WITHDRAW. on top of that they create an unwelcoming atmosphere and the sites are going to, rightly, lop them off before an influx of california players come in. Less pros, higher rake, happier fish same take.
  • RDF Posts: 183Member
    ^this is isn't true. Deposits ultimately go to rake + withdrawals.

    The percentage of the total deposits that go to rake increases the more evenly-matched players face off. If it was all whales and sharks, there'd be less total rake over time.

    Players who don't deposit do generate rake. You're getting confused between per hour rake and total rake. You're thinking if someone wins 0bb/hr they aren't paying rake. That's not true, because they're allowing those fixed deposits to work through more hands, thus increasing rake. Rake is simply a function of hands. It's like the velocity of money supply.

    If a reg has: A) more than their bankroll requirements, and B) has no bigger games to play, then he will withdraw. They want to minimize withdrawals so rake is maximized. That's part of why they care about having the high stakes action (so there are always options for people instead of cashing out).
  • AbeLimonAbeLimon Posts: 860Member
    edited November 2014
    there arent 10 tabling regs playing all day for 0 dollars. this is what the sites know. they are withdrawing out of the system in BBs or rakeback. I discussed withdrawals in my post. working through more hands doesnt increase the rake it accelerates it (unless it reduces withdrawals). i covered this as well. this acceleration is causing the sites to lose depositors which i also covered.

    they arent trying to create a rec shark system at the bottom. just all recs like a live cardroom. The rec/shark system is only necessary at the top.
  • AbeLimonAbeLimon Posts: 860Member
    edited November 2014
    bottom line: if you take out more than you bring in you are a drag on the casino bottom line just like i said in the podcast. Expect the casinos to try to rake you out of the system.
    the era of entitlement is gonna crash hard.
  • totsdtftotsdtf Posts: 156Subscriber
    AbeLimon said:
    yes. when i think back on my gaming life ive been in so many different places. card counter, advantage player, sports "bettor", investor, online player, live player, limit specialist, private game host, poker coach, no limit player, prop, golf "bettor", plo host, podcaster, etc etc. Each time I learn a new thing it becomes part of my advantage play portfolio. Even if it only brings in a few thousand a year it all adds up and makes life easier and less stressful.

    I like where im at now but it could all change tomorrow and id still make bank, this is what i try to impress upon the listeners. Be good at the poker game of life, focusing on some stupid metric that broke little kids thought up is a waste of time.

    Im not a fan of role models because its as limiting as it is inspiring but if you had to choose one in the poker/gaming industry it would be bobby baldwin and not the nosebleed baller of the month.

    Some will disagree because they are getting something out of the competition side of poker. I was there once, but it passes and you dont want to miss opportunities.
    ya and i think diversifying your sources of income is extra important due to the short-term instability of poker income.

    for me it comes down to this: how do i structure my incomes (plural) so that i can work 30 hours a week or less and have that "work" not make me wanna kill myself like "real" jobs do. poker will likely account for a lot of that income eventually but if it can't for some reason i'll be ready.
  • RDF Posts: 183Member
    AbeLimon said:
    I discussed withdrawals in my post. working through more hands doesnt increase the rake it accelerates it (unless it reduces withdrawals). i covered this as well.
    It reduces withdrawals. That's the whole point! Eg reg wars:
    AbeLimon said:
    this goes for Cheets reg wars example as well, the two regs generate No, additional, rake if they never deposit. The sites cant rake more than has been deposited).
    This is just nonsense. Of course they do. They pay more rake and therefore withdraw less.

    The sites rake less than what has been deposits (because of withdrawals). So when regs battle they reduce their combined withdrawals by what they just paid in rake.

  • cheet Posts: 4Member
    edited November 2014
    Read the replies and it got me thinking about this: Don't the sites make more money off there being break-even regulars?

    For the sake of argument let's say the two player types that exist are: crushing reg and fish. The crushers are going to quickly and efficiently take the fish money and be gone with it. The crushing regs can beat the rake no problem and they're all just taking the fish money and running with it. When a fish sits at their tables, the regs effectively chop the money and break-even among themselves. The crushers may be willing to play among themselves, but edges are so close it's not +EV for any of them unless the rake is low enough ;)

    Now, let's add in a 3rd player type: A regular who's not very good. He's good enough to beat the fish for a decent winrate (not as good as the crushers) but he'll lose money to the crushers. He's a break-even player who profits off rakeback. So now we have a table composition of: crushers, break-even'rs and fish. They slowly win off the fish (and somewhat block the crusher from winning off the fish) while slowly losing to the crusher. With this dynamic, the games will run for more hands as the break-even grinds lots of hours to eek out his not-so-great winrate. The more hands that are played, the more rake the site generates. The fish's deposit is raked longer than it would be if he just sat and dumped to a table of crushers. However, if you double the rake you make the break-even grinder knowingly a losing player and he's now out of the game.

    Is this good for the crushing pro? Hard to say. These break-even players are not being replaced by other fish, they're being replaced by other crushers who now have easier access to the game as seats are not as competitive to get. That's a benefit to them, on the other hand their game is now harder as they don't have any break-even RB grinders to profit it off of.

    So all-in-all, is it really good for the site to get rid of these players? I'm obviously simplifying things a lot here so I'm not 100% if my example here is real-world applicable and accurate but it seems reasonable given what I know about the internet poker economy and ecosystem.

    The inside scoop on the real reason the rake has been increased on Stars is nothing more than Amaya had to take on massive debt to buy Stars and they desperately and immediately need to increase revenue. I don't think this has anything to do with them needing more money for marketing, lobbying or improving the games. They just need cash :)
  • cheet Posts: 4Member
    Also, thought it was interesting to share: the heads-up CAP regulars on stars have held an effective shut down of the HU CAP games from .5/1 to 25/50 for the past week in protest of the rake increase which literally kills their games (except vs fish). No one is sitting at any of the tables so there's no game for any fish to join. Zero.

    I thought it was pretty remarkable that a group of people who are essentially competitors have agreed to shut down the entire lobby in order to protest. If any one of them sat they would have a huge advantage of being able to catch all the fish but they are united for the common greater good.

    Who knows how long it will last, but pretty interesting to me they have been able to pull this off.
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