Why is SNG rake so high?

[The Yugoslavian]

Can't joey just march into Stars HQ and put management into a sleeper submission hold? Seems like he has the clout to get into HQ, and obv the skills to beat them all up.

Yugoslav

[suzzer99]

Apparently a Stars staffer at the WSOP didn't even know who Joey was. Imagine.

[TheNoodleMan]

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Apparently a Stars staffer at the WSOP didn't even know who Joey was. Imagine.

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Suzzer,
please DO NOT feed the ego
thanks,
the management

[blackize]

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I'm nearly positive PokerStars is losing money by not lowering rake. Think of all the players who were mulitabling insane amounts of SNGs and paying tons of rake but now have moved to cash.

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The rake had some effect on those players and their decision to leave, but it isn't the main reason. There are fewer fish and other games are much more profitable.

Lowering the rake increases profitability of SNGs again by a small amount. But this doesn't serve to bring in new, desirable customers. The fish don't care and adding in more pros just serves to fleece the fish quicker. Then you're left with really tough games again.

[rwesty]

[ QUOTE ]
[ QUOTE ]
I'm nearly positive PokerStars is losing money by not lowering rake. Think of all the players who were mulitabling insane amounts of SNGs and paying tons of rake but now have moved to cash.

[/ QUOTE ]

The rake had some effect on those players and their decision to leave, but it isn't the main reason. There are fewer fish and other games are much more profitable.

Lowering the rake increases profitability of SNGs again by a small amount. But this doesn't serve to bring in new, desirable customers. The fish don't care and adding in more pros just serves to fleece the fish quicker. Then you're left with really tough games again.

[/ QUOTE ]

The fish DO care although not nearly as much as the players who are only playing poker for the profit. Fish are well aware of how much rake they are paying and will play where the rake is the lowest. There are some who have no idea how much the rake affects them and don't really adjust much but in general they will and do respond to changes in rake and I have never seen any evidence to the contrary.

[blackize]

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The fish DO care although not nearly as much as the players who are only playing poker for the profit. Fish are well aware of how much rake they are paying and will play where the rake is the lowest. There are some who have no idea how much the rake affects them and don't really adjust much but in general they will and do respond to changes in rake and I have never seen any evidence to the contrary.

[/ QUOTE ]

Rake has not been changed for the better in the last few years. The success of BBJ promotions shows that fish don't care about rake. It's pretty rare that fish know what they are paying in rake and much less common than that that they have any idea what the competition is charging in rake. The idea that lowering the rake will bring in more fish is laughable.

[citanul]

Not that I currently play sngs or anything, but I'd help out if you guys want organizational skills. I think that it might be reasonable to put together a group letter to a few of the bigger sites (maybe even just 2) and say "look, you all suck and charge too much rake. attached is a list of our screen names and rake we've paid in the last <timeperiod>. we're committed to taking our traffic to the site with the best support, games, and rake structure, and feel that we have let ourselves pay too much rake for too long. in fact, we're frequently paying more rake on an online, turbo, sit and go than we would for a live sit and go of the same stakes, which is absurd. we would like to see rakes reduced (possibly with a suggestion of what they should be, or a structure for deciding the rakes), and pledge to throw our traffic to the site which will help us save. By helping us save money, you will make money. yadda yadda yadda."

[HY77]

I have a feeling that when the pokersites constructed their supply-demand business model (a while ago), the current rake setup would give them optimum profits. They simply haven't adjusted to the exodus of SNG players to cash games as a result of high rake/skill.
The first site to lower their SNG rake significantly would probably see their membership grow quickly. A chain reaction would start, lowering SNG prices everywhere (unless they are colluding somehow).

[BradleyT]

They can't offer $200+$2 SnGs simply because the transaction costs for those amounts of money are larger than the fees they're raking in.

[chopchoi]

The sites want you to move to cash games, because unless you play really high stakes, they will make more rake off of you that way. A $20 SNG makes the site $20 in an hour. a $100 N/L cash game makes a lot more than that.