Why is SNG rake so high?

[Powers_That_Be]

Thats one scabby Pudge

[BradleyT]

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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.

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what the hell are you talking about?

what transaction costs?

i really don't think the site pays anyone money to move money between two poker players' accounts

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Merchant account fees.

[Luisgallo]

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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.

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what the hell are you talking about?

what transaction costs?

i really don't think the site pays anyone money to move money between two poker players' accounts

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Merchant account fees.

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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.

[ycjason]

the high rake and tough game at 114s and above (partially because the high rake) sure drove me out of SNG.

[TruFloridaGator]

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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.

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what the hell are you talking about?

what transaction costs?

i really don't think the site pays anyone money to move money between two poker players' accounts

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The transaction costs associated with bringing money in/out of the sites.

[suzzer99]

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the high rake and tough game at 114s and above (partially because the high rake) sure drove me out of SNG.

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Darn it, we need more 2p2ers to come back!

[BradleyT]

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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).

[Kevin8423]

I sent something to Stars support similar to this:

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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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and the response:

Hello Kevin,

Thank you for contacting us with your suggestion and for your interest in
PokerStars, we appreciate your feedback. You make some extremely good
points regarding STT rake and we appreciate the time you have spent
sending us this detailed argument.

I am sending your suggestion to our Ideas box for consideration.

Please be sure, that we do take your ideas seriously and appreciate the
time you spent to send us your email. If we decide to develop a new
feature, based on our player's suggestions, we will proceed to inform
them immediately.

Feel free to contact us should you need our assistance, we are here to
help.

Best regards,

Owen
PokerStars Support Team

[DuderinoAB]

Anyone from any site not named PokerStars please take note. This is how you treat customers.

[Ditch Digger]

Ideas box = giant black hole.