The Affect of Rake, No Rake, and Rakeback on Preflop Strategy

[Benjamin]

It is commonly accepted knowledge that the presence of rake on a game causes some marginally profitable hands to become unprofitable as compared to an unraked game, so that a player should adjust his starting hand selection somewhat tighter.

But what about rakeback? More specifically, consider the case of 100% rakeback, distributed on a dealt-hands basis, so that the rake is taken from each pot, and distributed equally to each of the players dealt into a given hand, with payment once a week, a la WPEX.

Now, whether you play a hand, or fold it, you receive a share of the rake from that hand.

How does this affect strategy as compared to the raked model?

Since you get paid rakeback on every hand regardless of whether you play it or not, that payment does not dictate any change in strategy at all, compared to a raked game. The cards in your hand and whether you play them, are unrelated to the weekly rakeback payment.

To put it another way, the pots you are chasing are the same size as in the raked model, nothing else about gameplay has changed, so your strategy should not change.

So, while you should loosen up in an unraked game, you should not do so in a dealt-hands method 100% rakeback game.

Conversely, if a site wants to promote looser games, then they should avoid awarding rakeback using the dealt-hands method. Instead, they should adopt a rakeback method that rewards looseness. Either return the rake to the winner of a the pot, to recreate a rakefree dynamic, divide it equally among those who see a flop, or divide it according to contribution to the pot.

I'm not sure how big the tightening effect of dealt-hands rakeback is, compared to rakefree, but I'm sure the effect is real.

Benjamin

[jukofyork]

[ QUOTE ]
It is commonly accepted knowledge that the presence of rake on a game causes some marginally profitable hands to become unprofitable as compared to an unraked game, so that a player should adjust his starting hand selection somewhat tighter.

[/ QUOTE ]
One situation where rake has a big effect on the playability of hands is stealing from the button in micro-limit games (eg: ~5% rake). Against a BB who ignores the high rake then it will make alot of the marginal steals -EV for you, whereas if they fold (correctly) to avoid taking -EV situations themselves you can steal with a much wider range. The same goes for if you are in the BB: if you fold correctly to avoid making -EV calls then you are letting the button take advantage of you and allowing him to open up his range...

This is basically the same problem as occurs in SNGs when bad players "spite call" you with hands which are -EV for both you and them - the only difference is SNG "spite calls" pass the equity you both lose to the other players whereas here the equity is just given to the site in rake. See this post for how to treat the problem as the "iterated prisoner's dilemma" and use the "tit-for-tat" strategy to counter the ability of players to exploit your (correct) -EV folds.

[ QUOTE ]
Conversely, if a site wants to promote looser games, then they should avoid awarding rakeback using the dealt-hands method.

[/ QUOTE ]
If the sites truly wanted to make looser games they would abolish rakeback completely. The net effect of rakeback is to allow break-even nits to carry on playing; remove the rakeback and these nits would no longer be able to play (profitably) and the games would start to loosen up.

Juk [img]/images/graemlins/smile.gif[/img]

[Blue Lagoon]

[ QUOTE ]
One situation where rake has a big effect on the playability of hands is stealing from the button in micro-limit games (eg: ~5% rake).

[/ QUOTE ]

Not only in micro-limit. PokerStars $5-$10 limit is 5% rake, and it's more BB/100h than the $1-$2!!

I never understood why there are so many arguments, saying that we should play more hands at the bigger limits because the rake is smaller.
I think that if you don't play at least, at least $10-$20, it should not be the case.

Any thoughts?

[dragonystic]

Your argument is sound, atleast in proving that proper strategy should not be altered from a rake site to a dealt rakeback site. (Not necessarily a bad thing IMHO.)

However, you haven't shown that changing the method of calculation would have real world effects in promoting looseness; only that a looser strategy would be optimal. As we all know, fish don't strive to play optimally. Nor will they flock to WPEX if the method of calculation is changed. Do you have any evidence that changing the method would loosen up the games? Many sites have switched before, and no site, to my knowledge, has shown an improvement in the quality of games.

People play poker how they want to, not according to which method of rb calculation the site they are on uses.

[El_Hombre_Grande]

[ QUOTE ]
People play poker how they want to, not according to which method of rb calculation the site they are on uses.

[/ QUOTE ]

Right. It is highly unlikely that the casual player is going to acknowledge the change, and then slightly loosen his starting requirements. This would have to happen in a substantial number of players to have the desire affect. I just don't see Players saying hey, the rakeback changed thus I'm promoting A9o to raise in the hijack and K10 in the CO.

[Benjamin]

[ QUOTE ]
Your argument is sound, atleast in proving that proper strategy should not be altered from a rake site to a dealt rakeback site. (Not necessarily a bad thing IMHO.)

However, you haven't shown that changing the method of calculation would have real world effects in promoting looseness; only that a looser strategy would be optimal. As we all know, fish don't strive to play optimally. Nor will they flock to WPEX if the method of calculation is changed. Do you have any evidence that changing the method would loosen up the games? Many sites have switched before, and no site, to my knowledge, has shown an improvement in the quality of games.

People play poker how they want to, not according to which method of rb calculation the site they are on uses.

[/ QUOTE ]

OK, we agree that a player should loosen up in a rakefree or a contributed rakeback game as opposed to a dealt-hands rakeback game or a raked game. The question turns to whether a change from dealt-hands rakeback to a contributed rakeback would actually loosen up a game.

I offer two methods that the game will loosen up from the change.

1) Existing loose players and loose players who wander into the game for whatever reason, who generally are the losers in the game and who supply a profit to the tighter players, will get more of their money back, and so will go broke slower. Since they go broke slower, their loose play is spread across more hands and games and thus directly loosening those extra games and hands that they participate in. This occurs with no conscious thought about optimal strategy or rakeback on their part, it is simply the effect of a loose player having more money in his pocket.

2) Some pros, semi-pros and educated amateurs will certainly recognize that they should loosen their starting hand requirements upon a change from dealt-hands rakeback to contributed. Many 2+2ers would do so, if not all of them. I would do so, personally.

Consider WPEX. It's population is dominated by 2+2ers and their ilk. I posit that a large proportion of them will both know that the correct strategic adjustment is to loosen up, and that they will make that adjustment.

With respect to the following quote: [ QUOTE ]
Many sites have switched before, and no site, to my knowledge, has shown an improvement in the quality of games

[/ QUOTE ]

No site provides a precedent that allows us to see what would happen if WPEX were to change to a contributed rakeback calculation. A site like Absolute that changed from dealt to contributed rakeback lacks several characteristics of WPEX.

First, as mentioned before, most of the players who have rakeback on Absolute are the tight playing pros, semi-pros and educated amateurs. The loose, uneducated casual player does not have, or even know about rakeback. Thus the first method by which the switch should loosen up the game does not even apply. The loose players with no rakeback did not receive any extra money, and so did not last longer, loosening up the extra hands he would have played in.

Second, the rakeback is only a fraction of the rake taken. 35% rakeback is a solid percentage from most sites, I think. That leaves 65% of the rake still being removed from the pot permanently and going into the house's pocket, instead of to the players. Thus, while 35% contributed rakeback should have some incremental loosening effect on optimal preflop strategy as compared to full rake or dealt-hands rakeback, it is nowhere near the full effect that going rakefree or 100% contributed rakeback would have.

[El_Hombre_Grande]

1. The overall VPIP will go from 22 to 23.5 % at 6 max due to factor one.

2. The fish will live a few rotations longer due to factor 2.

The games will not improve substantially. But I can't see it hurting, either.

I think a more drastic change would be necessary to start the snowball rolling.

[Benjamin]

[ QUOTE ]
1. The overall VPIP will go from 22 to 23.5 % at 6 max due to factor one.

2. The fish will live a few rotations longer due to factor 2.

The games will not improve substantially. But I can't see it hurting, either.

I think a more drastic change would be necessary to start the snowball rolling.

[/ QUOTE ]

You reversed my factors, I think, no biggie.

Can you provide any factual backup for your assertion that "The overall VPIP will go from 22 to 23.5 % at 6 max due to factor one"? (Which I believe refers to my factor 2: "Some pros, semi-pros and ...") Or, are you just making a somewhat reasonable guess?

I've considered trying to quantify the change.

Calculating it if the rakeback goes to the winner seems complicated, since you have to account for how often a marginal hand wins after you see the flop. But, if the calculation rewards equal share to any player seeing the flop, that is much simpler.

Posit a preflop strategy based on an EV chart and various other parameters, see how it changes with an extra $3 in the pot.

Anyway, I agree the change from educated players correctly loosening up will not be dramatic. Neither will the change from loose players keeping their money longer be dramatic.

But, both changes are in the desired direction if we want the site to loosen up.

Whether it's enough to 'start the snowball rolling' by itself, I don't know. But, I do think it pushes in the right direction. It costs the site very little money to implement, and none after the software changes are done.

Advertising widely would be great, but that costs money, ongoing, which is tough for a no-rake site to justify.

[El_Hombre_Grande]

No, I can't, obviously. My point is that the play is tight and will remain tight with respect to the knowledgeable players, although it should loosen things up a bit, which wouldn't be a bad thing.

The thing about WPEX is it has amassed a core of regulars who are there because of the rakeback, but it has never been able to attract casual players. Because it now has solid software, reliable cashouts, and as good of depositing methods as anyone, not to mention the bonus and aces never lose, that it must be SOMETHING. One of those somethings may be that the games are too tight, probably way too tight for the casual player. But consider this: you are a casual player. You are depositing at ONE site. Casual players don't have a WPEX account, a PS account, a FT account, etc. The most important thing to you is that you get to play. Its not any of the things that pros or semi-pros care about. You check out WPEX, and its a ghost town. I don't think casual players like to play real shorthanded, and I don't think they are comfortable floating between 3/6 and 10/20 to get a few games there. So what do they do? They drop there $500 in PS, because they can always get the action they want. That's right: they give up big bucks in rakeback, plus aces never lose, for available action NOW.

I just think 'critical mass" is now so far away that minor improvements aren't going to fix it. The biggest problem is that casual players care so much more about game availability than how the rakeback is calculated. So maybe the answer is to give up some of the rakeback for an affiliate program or getting Pam Anderson to show her boobs on the site, I don't know.

As I read this over, its clearly a hijack and I'm sorry. I basically agree with your theory, in that it should loosen things up a bit and is thus as a step in the right direction, but my fear is that it is the equivalent of a band-aid on a severed limb.

[NoChance]

There were a number of people on these forums that fled from UB when they changed the way you earn points from Dealt to Contributed. Most obviously earned less points when this switch was made. Couldn't the same argument be made for rakeback?

Put it this way. Before UB changed to contributed, there were a ton of people on UB that would reload bonuses and then just sit at as many 2NL tables as possible and only play high pocket pairs or nut hands that flopped when in the BB. They were earning more points just sitting there than the cost of the blinds per round. In my mind, if it is exploitable then it can't be correct.

They would typically earn .9 or .8 UB points ($0.08 or $0.09) per round while only paying $0.03 (blinds) to play. I know this is might not mean much to most who play at much higher stakes but for some of the small stakes players, this is how they were building bankrolls.

Dealt = preferred for my TAG style of play
Contributed = most fair for all