Why is SNG rake so high?

[blackize]

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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).

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Why does everyone think this? Poker sites are not the type of thing that people shop around on prices for.

The average player sits down at whichever site he first joined, had the best advertising, won a freeroll on, had his favorite pro, or which software he likes best and just plays. He's not looking into the cost of playing at other sites vs his site, he just doesn't care. He's there to relax after work or whatever.

The player out to make money will play wherever the most money can be had. If a site cropped up with 25% rake but all of its players went all in the first hand, he would play there over the site with 2% rake and a player pool like the ones we have been seeing lately.

If site A lowers rake, good players out to make money will leave other sites and come to site A. The games will dry up and the savvier players will leave site A for site B because the fish:shark ratio is much better.

[agnoke10]

if stars lowered their rake to acceptable levels, i think we could agree that this would benefit everyone, and stars would probably not lose money.

[agnoke10]

citanul, i think we would all appreciate your help on this

[Uniqueuponhim]

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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."

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I really like this, and I think it's worth a shot.

[rwesty]

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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).

[/ QUOTE ]

Why does everyone think this? Poker sites are not the type of thing that people shop around on prices for.

The average player sits down at whichever site he first joined, had the best advertising, won a freeroll on, had his favorite pro, or which software he likes best and just plays. He's not looking into the cost of playing at other sites vs his site, he just doesn't care. He's there to relax after work or whatever.

The player out to make money will play wherever the most money can be had. If a site cropped up with 25% rake but all of its players went all in the first hand, he would play there over the site with 2% rake and a player pool like the ones we have been seeing lately.

If site A lowers rake, good players out to make money will leave other sites and come to site A. The games will dry up and the savvier players will leave site A for site B because the fish:shark ratio is much better.

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You can keep saying this but you're 100% wrong. Poker players, fish included, respond to rake. Even the most clueless players are at least somewhat aware of what rake is. If either FullTilt or PokerStars doubled their rake on SNGs there would be a mass exodus. If one of them lowers their rake there will also be movement towards the lower rake. Whether or not the customers respond enough that it makes it worthwhile for the site to change their rake structure is the only thing that is uncertain. It is my opinion that the current SNG rake is high enough that a change would increase traffic enough for it to be well worth it for the site.

[BradleyT]

How is he 100% wrong? WPEX used to have 100% rakeback which meant no vig SnGs. Obviously with no TV marketing they never got a player base worth making the switch.

[TruFloridaGator]

Let's start with a petition and we can all mass e-mail them a link to it.

This is the main reason why I hate playing the 60s because the rake is the worst of all.

[Kibby]

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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.

[/ QUOTE ]How are the variable costs for an online poker site much different per table? I can't imagine they are too much and don't see how those costs would vary as the buyin changes.

[suzzer99]

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if stars lowered their rake to acceptable levels, i think we could agree that this would benefit everyone, and stars would probably not lose money.

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This is far from a given. Read Lee Jones email in the previous thread (link I posted above). He's very concerned about "overfishing" ruining the environment for everyone.

Rake and VIP programs are his primary methods of maintaining this balance between sharks and fish. Obviously they have these set where they are right now because they think it's the most profitable configuration - now and long term. They could be wrong but I guarantee they've put a lot more thought into it than we have.

Lowering the rake might bring some more business, but at least short term it would seem most of that business would be pros. I would guess whatever change they do make needs to be very gradual so that the ecosystem has time to adjust.

I think basically their strategy is to use the VIP program to keep their super high-volume pros, the ones who seed a lot of the bigger SNGs, happy - w/o making the playing field so juicy that it induces 100s more like them to sit down and kill the games.

[rwesty]

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How is he 100% wrong? WPEX used to have 100% rakeback which meant no vig SnGs. Obviously with no TV marketing they never got a player base worth making the switch.

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Actually he was right about a lot of his post I guess I didn't really read it and assumed it was saying no rake wouldn't have any effect, sorry blackize.

WPEX never got enough traffic for most pros to consider switching. Also they had poor software, no marketing, no Pokertracker/hud etc... No rake was pretty much the only thing they had going for them and it did bring a lot of players in (both fish and pros).