Judging by the questions I get asked, there’s one thing that students of poker are absolutely obsessed with. The rake. This rake is higher than what I’m used to. Can I beat it? I’m playing small, can I beat that rake? And so on.
In general, I think this focus on the rake is misplaced. Obviously, rake is a cost and costs are bad, but if you’re a student of the game, you should probably worry more about improving your poker skills than the rake. Seriously. The rake is never the thing that’s standing in the way of achieving your poker goals. The quality of your hard and soft poker skills is always the bottleneck, and so you should spend all the time worried about those and none of the time worried about the rake.
Nevertheless, people are very worried about rake, and so I wanted to talk a little about how to estimate the effect it will have on your game.
I get questions like these quite frequently.
“Hey Ed. I normally play $1-$3 no-limit with a rake of 10 percent up to $4. I have a winrate of $20 per hour over the last several years at that game. Now I’m travelling and I’m in a $1-$3 game, but the rake caps at $8. Is it still beatable?”
Okay. So, first of all, the most important factor in whether a poker game is beatable or not is the quality of your opponents and your ability to exploit them. If the players in the $8 rake game are substantially worse than those in the $4 game, you have nothing to worry about. On the other hand, if they’re bad in the new game, but bad in a way that’s different than what you’re used to—such that your normal exploitative plays won’t work—then you probably won’t beat the game.
But you’ll probably learn something in the process.
In any case, once again I think people are focusing on the difference in rake when they should be focusing on other differences between the game they’re used to and the new game.
But let’s assume that everyone else is equal. All the players are the same. Everything is exactly the same, except the rake rules have changed. How can you estimate the impact this will have on your winrate?
Well, I would try to get an estimate for how much rake I’m paying every hour.
Let’s say you’re playing about 30 hands an hour at a nine-handed game. The rake is 10 percent capped at $4. Not every pot hits the cap, however, so let’s say for the sake of argument that the average pot is raked about $3. That’s $90 per hour coming off the table, and it’s a nine-handed game, so the average player is paying $10 per hour in rake.
A good no-limit player will probably win more than the average number of pots (even if they’re playing tighter than the average player). Maybe instead of $10 per hour in rake, you pay $12 or $13.
If your post-rake winrate is really $20 (it’s dangerous to assume that your winrate going forward will be the same as the winrate you’ve achieved in the past, but that’s a topic for another article), if it’s really $20, then your pre-rake winrate is something like $32 or $33 per hour.
Now the job is to figure out how much you will pay in the new rake structure. So, it’s 10 percent capped to $8. That may at first appear to be a straight doubling of the rake, but it’s a bit less than that. Not every pot got capped at $4 rake (we assumed the average pot was $3).
Using the same assumption, the new rake has to be less than an average of $6, because an even larger proportion of the pots won’t be capped now.
Let’s say for the sake of argument that it’s $5 per hand on average. The new rake structure takes an additional $2 per hand off the table, or $60 per hour.
Divide by 9 to get your average share and it’s—well let’s call it $7 per hour. Maybe you win a few extra pots than the average player, so let’s bump it to $8 or $9 per hour. Add that to the $12 or $13 you were out before the rake change, and now we’re at about $21 or so per hour in rake.
Subtract that from your pre-rake winrate and you get $11 or $12 per hour.
Yes, the game is still beatable for you with the new rake structure. But also, yes, the rake is going to hit your winrate pretty hard—at least percentagewise.
But here’s the thing. Bad rakes often come together with bad players. The nitty, solid, rock garden type players absolutely hate rake. They’ll take a look at the $8 drop and head for the hills. Or, rather, their grind-it-out-for-fifty-cents-an-hour-in-comps strategy won’t work out with the new math. Instead of playing break-even poker (or slightly better) and getting a few perks for their time spent, they’ll be losing on a per hour basis.
Eventually this sort of player tends to figure this out and avoids the game. So usually when you go from a lower to higher-raked game, all things will not be equal. The players will be worse, and often that will more than make up for the added rake. This is especially true if you can finagle other rule changes like deeper stacks, straddles, and so on.
If you’re looking at the new rake and think, “Wow, how much extra is this going to cost me?” you’re really only looking at a small part of the picture. Try to evaluate the value of all the changes in the game, and not just the one that is clearly and obviously bad for you.
One thing I will say about high rakes is that they can damage the economic ecosystem of the game. The more you depend on “grinding it out” to make your money at poker, the more a higher rake is going to hurt you. It will burn out the worst players over time. So, for example, if an online site decided to jack its rake up to $8 per hand, you’d very soon see all the weaker players go broke and stop redepositing.
But live games are slow and can handle burnout rakes much better, because the weaker players have time to make more money at their jobs or businesses or whatever before the next game.
In the end, very few poker games are unbeatable because of the rake. If it feels unbeatable to you, the best thing to do is to learn to play better. ♠