Why is SNG rake so high?

[TheNoodleMan]

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Ideas box = giant black hole.

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Your moms idea box!

[Kibby]

I just made my way through this whole thread. There's a bunch of good stuff in here and its given me a couple suggestions / comments.

1) None of us has any clue how to make these calculations as to whether it will be more or less profitable for pokerstars to lower the rake. Not a single argument in here comes close. I also doubt Pokerstars could make an accurate prediction. Supply, demand and pricing with that number of replacement products and competitors makes for a ridiculously hard problem. I have thoughts on how to attack the problem but that's for another thread and we don't have the data necessary anyways.

2) I don't see how a boycott would be effective at all. First off, while there are a large number of high volume players that could leave, the number of people who would take advantage of their absence is likely to offset the effectiveness of a boycott. I, for one, would love to see you guys away from my tables at the 60s. It would be like Xmas.

3) The best idea seems to be asking for a promo for sngs. This would do a few things for Pokerstars that we can likely predict:

a) Test the model of lowering rake.
b) Introduce fish to more games. The more games they get exposed to and like, the more likely they are to keep playing poker in some capacity.
c) Advertise the site and encourage people to come back from sites like Full Tilt.

For this reason, I think it would behoove us to ask for a sng week where the rake is cut in half (or fashioned in a proportional way to buying) instead of a permanent cut. I'm sure they would make up a portion (who knows how much) of that by increased volume and its low risk for them as its advertised as temporary so they won't set expectations incorrectly. Pokerstars is also much more likely to do this from client demand than they are cutting the rates. It would also give them something to talk about in their meetings on the subject where now they just have pissy emails.

Thoughts?

[Luisgallo]

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This is a very good point but in most cases the deal they agree with most of the mercants is for a fixed cost per transaction: like 2$ for 200$+ otherwise it if would be more they will share it with customers or they would strongly push cheaper methods of payment that's why usually you can't deposit with expensive cards like AMEX.

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I wish it were a fixed fee! I get charged 2.2% + $.30 per transaction for taking credit cards online. You can get discounts for high volume but since poker sites are in such a high risk category they get charged a lot more than normal. If I had to guess I'd say they pay between 3% and 8%. Also, when people use rewards cards merchants pay a slightly higher rate than normal to help pay for those rewards. For example I sometimes get charged 2.9% + $.30 because they used a rewards card.

Edit - I've never really heard of anyone getting a fixed fee rather than a % but maybe they can (I'm doubtful though).

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Dude, I was not giving you my opinion but stating what is the standard for whoever deal with large amount of money, simply because you are getting charged in % doesn't mean that's the way.

There is always a max commision (as there is a max rake in cash games).

Also what you said in relation of "type of business" has nothing to do with fees since they are taken out upfront therefore there is not any credit risk.

[Klinzmann]

I also like the idea of a sng promo week with lower rake. That could start a trend which eventually leads to lower rake over all.

[Paul2432]

I've read the whole thread, and one thing people are overlooking is there is some historical precedent.

Before the ban, Stars offered $5+0.50 STTs while Party offered $5+1. If the theory is correct that people will flock to lower rake, one would expect nobody to play the Party $5+1 tournaments. In fact, they ran all the time.

I've been playing STTs since back when Paradise offered only limit tournaments that stopped running at midnight. I think they set the standard at 10% rake. 10+1, 20+2 etc. Stars actually has lower rake than the historical values.

Food for thought.

Paul

[BigCummins]

The promo sounds like one of the few ideas that has a chance in this thread, I would love to see it happen.

I'd also be happy with more fpps/$1 of rake paid for sngs. Changing the fpp structure slightly is much less of a risk for them as opposed to directly changing their prices.

[Guthrie]

I never understood why they charged such widely different rates for different games just to come up with a round number. The simplest thing would be to just charge a flat rate, like 6% for the very lowest buy-ins down to 2% for the highest. So, instead of 6.50, 16, 27, 60, they might have 6+.36 (6%), 15+.75 (5%), 25+1.25 (5%), 55+2.20 (4%), all the way to 1000+20 (2%). Just list the base portion of the buy-in in the lobby, and show the buy-in + rake on the sign-up box and on the HH.

The simplest way to test whether a lower rake would increase business would be to persuade them to start a 40+2 turbo for some fixed period of time. If it blows away the unbelievably stupid 32+3 games, then there's their answer.

[KoreanBuffet]

I think the real problem is that a large part of pokerstars player pool are the fish who just buy into a game with complete disregard as to what the entry fee is and how significantly it cuts into profit....don't know if that was already said I don't want to wade through 12 pages of text...This is becoming the harry potter of posts.

[Kevin8423]

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I think the real problem is that a large part of pokerstars player pool are the fish who just buy into a game with complete disregard as to what the entry fee is and how significantly it cuts into profit....don't know if that was already said I don't want to wade through 12 pages of text...This is becoming the harry potter of posts.

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Lololol at not having 99 posts per page

But really its true that fish don't pay attention to rake percents, so our best hope is to either all email support with a detailed response, or to create an intelligent sounding letter on the forum with everyones contributions and get some signatures on it. If we aren't doing either of these things were just wasting time and accomplishing nothing.

[Josem]

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to either all email support with a detailed response, or to create an intelligent sounding letter on the forum

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... say, like this?