Why is SNG rake so high?

[Josem]

here's a draft - try emailing this. feel free to edit it as you wish:

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Dear SITENAME,

I am a regular, high volume poker player who mostly plays single table tournaments. I believe that you should reduce the tournament fees that you currently charge on these tournaments.

Some of the key reasons I think this would be good for you would be:
1) Reducing the rake may encourage new players to transfer from other sites to start playing with you. This would increase the volume of play, and the potential profit of your site.

2) Currently, the effective "rake per hour" that you charge on a single table tournament is much higher than the "rake per hour" that you would charge in similarly sized cash games. Thus, it would be possible to reduce the single table tournament rate, and even if players grow at the expense of cash games, your hourly profit per player would increase.

3) Attracting new players to your site through lower single table tournament charges may lead to growth in other games, as players often play multiple formats of online poker.

4) Many players are attracted to poker through tournaments that they see on TV. Single table tournaments are the easiest and fastest way to replicate that experience for customers, and as players get used to the idea of online poker, they are likely to then "grow" into other games.

5) A happier player base is likely to increase their play with your site, and improve your per player yield.

6) Anecdotally, I understand that the player numbers on single table tournaments has fallen recently. Reducing the tournament entry fee is likely to re-stimulate this group of the market. Speaking to other players, they have commonly identified that the high tournament fees that you take are a key factor in deciding to reduce their play of such tournaments.

I hope that you will reduce your rake, to the benefit of both players and your business.

regards,
YOUR NAME


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[jsbjoe]

NO online game has an extremely low rate. The profit margin that online poker sites realize for providing an online "table" is mind boggling.

Eventually, a site will come along that has excellent software/support and lower rates. Unfortunately, the U.S. legislation has substantially delayed this occurrence.

Until then, poker players are stuck with the status quo. While a SNG boycott just might work, if properly organized, look at this issue from the site's perspective. They have to be concerned that the issue of lower rake will not end with SNG's, and therefore they may not cave in even with respect to SNG's.

In any event, the bottom line is that online poker should not be nearly as expensive as it is. But the same could be said of poker elsewhere. I am playing in a game in Paris atm which charges $50 an hour ! The stakes are high enough that some money can be made, but I really don't see how anyone can play in their low limit games, which cost maybe $25/hr. for low stakes.

A year or two ago the Commerce Casino in Los Angeles raised their time collections $1/hr. across the board, even though they were realizing fabulous profits as things were.

As a group, poker players are too poorly organized to do anything about the price gouging we are all subjected to.

[blackize]

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The whole point is that the market can't bear the current rake!! That's why you see very few SNGs filling up and tons of cash games being played!

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You say they aren't filling because the rake is too high, I say it's because there aren't enough fish playing at those levels.

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The easiest thing to do is just have a 'promo week' where SNGs are advertised with half the rake that's being offered now. If their SNG business doesn't AT LEAST double then they shut down the idea after a week.

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That's a good idea

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Obviously they will get way more than 2x their current business but they'll never do such a thing.


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It is not obvious and you should stop treating it as such.

[TheNoodleMan]

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I like how you guys are so confident that your analysis of the PS business model is vastly superior to their own. Do you think they've put zero thought into this? We aren't dealing with Party Poker here.

It's very easy to say "you will get a lot more volume on high buyin SNGs if you lower the rake" when you aren't the one who has to deal with the fallout if it doesn't work. What if it doesn't increase traffic, or just a little bit? Now their revenue is down and they have to consider raising the rake back up. How well do you think that will go over?

Maybe when they lower the rake FTP will have to lower theirs. Now if they raise it back up more people will bolt to FTP. But then they can come to DCJ311 and ryanghall and say "Hey guys, you told us this would work. So now how are you going to get us out of this mess?" Right?

Now if you want to say "we don't care about your business model, we think the rake is too high and we're pissed" that's fine. I just think the idea that we somehow know more than they do about how to run their business is ludicrous.

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Suzzer, could you please look up all the top players' results on the 1050s and tell me how many, if any, are profitable on them? Thanks,

ryan

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And what does that have to do what Suzzer's point?

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Because

a) they're barely ever running anymore and

b) when they did run they weren't profitable for anyone. Obviously in that situation they're not going to last and the site isn't going to profit.

God, why are you so against a cut in SNG rake. It's painfully obvious it's too high. Add some good thoughts instead of your little snide comments or GTFO the thread. As you can probably all tell this is a topic that makes my blood boil.

Ryan

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You say they aren't profitable for anyone, yet they continue to run and I'd be willing to bet that stars profits.

I'm not against a cut in SNG rake at all, no one here is, I just happen to be a realist.

You can bitch that I'm not helping the cause but that doesn't change the fact that I don't need to have a breakthrough idea to recognize the fundamental flaws in yours. Your emotional reactions, no matter how true they feel to you, don't mean that you are right.

[ryanghall]

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I like how you guys are so confident that your analysis of the PS business model is vastly superior to their own. Do you think they've put zero thought into this? We aren't dealing with Party Poker here.

It's very easy to say "you will get a lot more volume on high buyin SNGs if you lower the rake" when you aren't the one who has to deal with the fallout if it doesn't work. What if it doesn't increase traffic, or just a little bit? Now their revenue is down and they have to consider raising the rake back up. How well do you think that will go over?

Maybe when they lower the rake FTP will have to lower theirs. Now if they raise it back up more people will bolt to FTP. But then they can come to DCJ311 and ryanghall and say "Hey guys, you told us this would work. So now how are you going to get us out of this mess?" Right?

Now if you want to say "we don't care about your business model, we think the rake is too high and we're pissed" that's fine. I just think the idea that we somehow know more than they do about how to run their business is ludicrous.

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Suzzer, could you please look up all the top players' results on the 1050s and tell me how many, if any, are profitable on them? Thanks,

ryan

[/ QUOTE ]

And what does that have to do what Suzzer's point?

[/ QUOTE ]

Because

a) they're barely ever running anymore and

b) when they did run they weren't profitable for anyone. Obviously in that situation they're not going to last and the site isn't going to profit.

God, why are you so against a cut in SNG rake. It's painfully obvious it's too high. Add some good thoughts instead of your little snide comments or GTFO the thread. As you can probably all tell this is a topic that makes my blood boil.

Ryan

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You say they aren't profitable for anyone, yet they continue to run and I'd be willing to bet that stars profits.

I'm not against a cut in SNG rake at all, no one here is, I just happen to be a realist.

You can bitch that I'm not helping the cause but that doesn't change the fact that I don't need to have a breakthrough idea to recognize the fundamental flaws in yours. Your emotional reactions, no matter how true they feel to you, don't mean that you are right.

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If Stars is the only one profiting on certain levels, don't you see the fundamental flaw there?

[TheNoodleMan]

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I like how you guys are so confident that your analysis of the PS business model is vastly superior to their own. Do you think they've put zero thought into this? We aren't dealing with Party Poker here.

It's very easy to say "you will get a lot more volume on high buyin SNGs if you lower the rake" when you aren't the one who has to deal with the fallout if it doesn't work. What if it doesn't increase traffic, or just a little bit? Now their revenue is down and they have to consider raising the rake back up. How well do you think that will go over?

Maybe when they lower the rake FTP will have to lower theirs. Now if they raise it back up more people will bolt to FTP. But then they can come to DCJ311 and ryanghall and say "Hey guys, you told us this would work. So now how are you going to get us out of this mess?" Right?

Now if you want to say "we don't care about your business model, we think the rake is too high and we're pissed" that's fine. I just think the idea that we somehow know more than they do about how to run their business is ludicrous.

[/ QUOTE ]

Suzzer, could you please look up all the top players' results on the 1050s and tell me how many, if any, are profitable on them? Thanks,

ryan

[/ QUOTE ]

And what does that have to do what Suzzer's point?

[/ QUOTE ]

Because

a) they're barely ever running anymore and

b) when they did run they weren't profitable for anyone. Obviously in that situation they're not going to last and the site isn't going to profit.

God, why are you so against a cut in SNG rake. It's painfully obvious it's too high. Add some good thoughts instead of your little snide comments or GTFO the thread. As you can probably all tell this is a topic that makes my blood boil.

Ryan

[/ QUOTE ]

You say they aren't profitable for anyone, yet they continue to run and I'd be willing to bet that stars profits.

I'm not against a cut in SNG rake at all, no one here is, I just happen to be a realist.

You can bitch that I'm not helping the cause but that doesn't change the fact that I don't need to have a breakthrough idea to recognize the fundamental flaws in yours. Your emotional reactions, no matter how true they feel to you, don't mean that you are right.

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If Stars is the only one profiting on certain levels, don't you see the fundamental flaw there?

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If you have a legitimate rational point just say it. I'm not going to try to read your mind on why stars will suddenly make more money by lowering rake. The burden of proof is decidedly on you here, otherwise you are just bitching about rake like everyday people bitch about taxes.

[ryanghall]

The points have been said numerous times in the thread. The high stakes SNGs simply aren't running because everyone knows that the rake is too high and that they're not beatable. I could list all the top players and their [censored] ROIs on the 1050s but I don't want to embarrass my colleagues. I hope you understand.

Ryan

[TheNoodleMan]

and you still haven't shown that Stars will profit more, short term or long, by lowering the rake.

I'm not arguing that the current rake isn't as good for us, I'm saying that you have failed to show how a lower rake will benefit stars (or any other site), which is what you'll have to do to convince them to actually lower it.

[Josem]

It is not possible for any of us to "prove" that Stars will profit more or less in the short or long term by any change to the rake - because it depends on the demand for the game, and obviously on how that demand is changed by the pricing effect of the rake.

We do not know how elastic demand is for this game.

[Luisgallo]

I am with you.
Whenever I think about it and above all I compae it to any live toruney I feel stupid.
Now: I suggest somebody writes down a proper letter and we all send it to stars, if the answer will not be satisfying we will start contacting other websites in order t make a rake deal and possibly make a mass movement there.
With all the barriers for a poker room to enter in business rigt now having the chance of self proclaming "the SNG poker room" is not bad at all.