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

[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.

[jfk]

The strategic changes would be very slight. These are games with a graduated rake, not a drop.

With a drop (i.e. California games) there are plenty of times that a good player will pass on a steal opportunity because the effect of a $5 drop is enough to markedly impact profitability in say, a 20/40 game.

Since this thread is less about theory than application, specifically application at WPX, I can't see there being anything more than the slightest change in playing styles.

The greater risk of course is riling up any portion of the established player base, many of whom play a tight/solid style and may be getting a slight advantage under the current, industry standard, dealt method of rakeback.

Somehow the myth has been established that a player can win by playing an extraordinarily tight style and let the action players generate a disproportionate amount of rakeback for such a player.

In practice, I don't see any such player at the tables and would postulate that the games are far too aggressive and stocked with thinking players for such a player to ever win.

There are players at that site who at one point employed that sort of style, but all have either evolved or they don't play there anymore. A good example is mrmumsan who used to have a profile of 11/2/1 in full ring. Now he's throwing haymakers with the best of them.

I can't imagine that changing the rakeback method will generate any additional traffic to WPX or make the games any more profitable. El Hombre Grande has plenty of reasonable ideas why the traffic is thin (and there are plenty of other reasons to explore) and there's no reason why an extremely esoteric consideration would draw more casual players.

It would also be a shame to see WPX throw development time and resources into this change when they could be better applied to ironing out the various technical wrinkles which still pop up on the site.

Lastly, I would ask BenJammin and you other regulars if you've ever made a playing decision there based on the way rake is distributed, because I have not. I've never said I won't steal here or cap with a likely split pot because I'l only be getting back 1/x of the contribution of the $3-$5 (its $5 in the 50/100 and above) rake while paying 50%. This has entered my mind at Stars, but never WPX because I know that ultimately the monies are flowing back to the playing base 100%. Whether or not my share is slightly above or below 100% over the long run is too fine a distinction to affect playing decisions.

Lastly, while I admire that it seems that Benjamin is partially motivated by the issue of fairness, a worthy and noble motivation, it pains me that we've brought this issue to the forefront based on the ramblings of a malcontent who doesn't play the site and who looks for various bogeymen to explain why he loses. My sense is that rake distribution is a non-issue for the current playing base. To make it an issue runs the risk of unneeded alienation of the current shrinking base and to divert resources which would be better applied elsewhere.

My sense is that it would be for the good of the site to let this issue fade.

[Benjamin]

Hi Hombre, jfk.

Hombre, I'm glad you agree that it would apply a push towards looseness. I think it's fact, and it is a push in the right direction. Everyone prefers to play in a looser game as opposed to a tighter game.

I will try to quantify the change it would make for someone following a set strategy based on an ev chart, when I have some more spare time.

[ QUOTE ]
Since this thread is less about theory than application, specifically application at WPX, I can't see there being anything more than the slightest change in playing styles.

[/ QUOTE ]

Hmm, I don't mind some discussion of the particulars of WPEX's situation here, but I'd like theory and logic to remain at the core.

[ QUOTE ]
Somehow the myth has been established that a player can win by playing an extraordinarily tight style and let the action players generate a disproportionate amount of rakeback for such a player.

[/ QUOTE ]

I hope you don't perceive me to be promoting this supposed myth. Nobody has previously raised this argument in this thread.

[ QUOTE ]
there's no reason why an extremely esoteric consideration would draw more casual players.

[/ QUOTE ]

Tightness of the games is hardly an esoteric consideration. Many players, including me, will leave a table, or not join in the first place if a table is notably tight.

I have demonstrated that there is a solid logical foundation for the belief that contributed rakeback should lead to somewhat looser games than dealt-hands rakeback. The magnitude of said effect is unknown. You assert it wouldn't be more than the slightest change, but you offer no facts, logic or reasoning to back that up.

[ QUOTE ]
Lastly, I would ask BenJammin and you other regulars if you've ever made a playing decision there based on the way rake is distributed, because I have not.

[/ QUOTE ]

Yes, I have played a tighter game at WPEX than I generally have elsewhere. As long as there is a lagtard or two in the game, then I reason that as long as I don't go overboard with my tightness, I will get action on my hands when I come in the pot. Marginal hands, roughly breakeven, I fold. Because, I reason, why should I add to my variance trying to eek every bit of profit with roughly breakeven hands when I am ensured a small profit with a fold.

This has lead to a low variance, somewhat low profit existence for me there. I could possibly make more money opening up more, but the quality of the opposition there makes me wonder whether I can play marginal hands profitably. Considering the competition, I am pretty happy that I have survived and profited on the site while so many have not.

I can honestly say that if my rakeback were connected to my participation in a hand, then I would add some marginal hands. I would like to play more hands, because playing more hands is fun. This is part of my motivation for continuing the discussion.

[ QUOTE ]
Whether or not my share is slightly above or below 100% over the long run is too fine a distinction to affect playing decisions.

[/ QUOTE ]

As I posted in the thread in the Zoo, I have seen a 15-20% 'bonus' over the rake taken from my pots, and I am not the tighest player on the site by any means. I'd characterize that as 'significantly above 100%' not 'slightly'.

[ QUOTE ]
My sense is that rake distribution is a non-issue for the current playing base. To make it an issue runs the risk of unneeded alienation of the current shrinking base and to divert resources which would be better applied elsewhere.

[/ QUOTE ]

I sense that rake distribution is a big issue to the player base. Didn't you see the vehemence with which I was attacked in the Zoo for pointing out the logical facts of the situation? The TAGs that dominate the player base there now have a large self-interest in maintaining the status quo on rake distribution.

But, the very fact that TAGs dominate the games there makes the site unappealing. Add in the fact that the site is practically empty now, and I ask the obvious question: what is so great about the current player base that we shouldn't consider changes that they don't like, if we think those changes will improve the site in the long run.

[Benjamin]

BTW I am embarrassed that I used 'affect' instead of 'effect' in the title of this thread. Sloppy!

[Benjamin]

How about the following approach to quantifying the problem.

Assume 10/20 fixed limit holdem, 10 players, with sufficient looseness that we can say that every pot sees the $3 rake taken from the pot. Assume that these rake conditions are similar to those in effect for this EV chart.

Posit a preflop strategy of playing any hand that has an EV from the chart of .02 BB or higher. I know this is overly simplistic, but it's the best I can muster for now.

This strategy has us playing:

<font class="small">Code:</font><hr /><pre>
Hand EV Times Dealt out of 115,591,080 deals
AA 2.32 521,324
KK 1.67 522,652
QQ 1.22 520,663
JJ 0.86 521,866
AK s 0.78 348,364
AQ s 0.59 348,759
TT 0.58 520,705
AK 0.51 1,048,008
AJ s 0.44 348,126
KQ s 0.39 346,772
99 0.38 522,454
AT s 0.32 348,013
AQ 0.31 1,042,962
KJ s 0.29 346,582
88 0.25 521,972
QJ s 0.23 348,870
KT s 0.20 348,774
A9 s 0.19 348,992
AJ 0.19 1,045,857
QT s 0.17 346,115
KQ 0.16 1,045,069
77 0.16 524,345
JT s 0.15 348,235
A8 s 0.10 349,431
K9 s 0.09 348,286
AT 0.08 1,047,289
A5 s 0.08 348,544
A7s 0.08 349,949
KJ 0.08 1,047,098
66 0.07 520,946
T9 s 0.05 348,264
A4 s 0.05 347,862
Q9 s 0.05 348,760
J9 s 0.04 349,965
QJ 0.03 1,044,338
A6 s 0.03 347,677
55 0.02 521,945
A3 s 0.02 347,895
</pre><hr />

That is 17.1% of the hands, from Poker Calculator.

To make calculations easier, I will consider the scenario of changing the rake/rakeback structure to a contributed calculation where if you see the flop, you split the rake with others who also saw the flop. And I will assume an average of 3 players to the flop.

This structure awards 1/3 of the rake, or $1, to us when we see the flop. That is .05 BB. So, the EV of any hand we see the flop with goes up by .05 BB. Adding that EV to the chart leads us to include the following hands:

<font class="small">Code:</font><hr /><pre>
Hand EV Times Dealt out of 115,591,080 deals
K8 s 0.01 350,401
KT 0.01 1,045,392
98 s 0.00 348,759
T8 s -0.00 347,443
K7 s -0.00 348,341
A2 s 0.00 347,318
87 s -0.02 348,348
QT -0.02 1,047,827
Q8 s -0.02 348,381
44 -0.03 523,398
A9 -0.03 1,047,672
J8 s -0.03 348,046
76 s -0.03 347,540
JT -0.03 1,043,812
</pre><hr />
That brings us up to 23.9% of the hands.

Obviously going from 17% of hands played to 24% is quite a significant change. Does anyone see any big problems with my assumptions?

[jfk]

[ QUOTE ]
I have demonstrated that there is a solid logical foundation for the belief that contributed rakeback should lead to somewhat looser games than dealt-hands rakeback. The magnitude of said effect is unknown. You assert it wouldn't be more than the slightest change, but you offer no facts, logic or reasoning to back that up.

[/ QUOTE ]

My numbers indicate that in full ring limit hold 'em rake as a percentage of the pot is:

5/10: 3.47%
10/20: 1.30%
20/40 .94%
30/60 .71%
50/100 .67%

To my way of thinking, and bearing in mind the playing adjustments described in the Stox book which makes very fine playability distinctions based on equity considerations, the dfferences here are too small in 10/20 and above to promote looser play. A gifted quant. might be able to show profitability change of one pip of strength if the rake distribution were changed but to my way of thinking it doesn't follow that the effect on ten players would have any marked impact on the looseness of the games. Its too small a shift.

In terms of playing style, the range between players who are very tight is less than 12% (I'm comparing two well known mid-limit regulars who I'd prefer not to name, who I consider to be on the edges of LAG/TAG range, one of whom has a VPIP of 27.1 and the other of 15.4. The LAG's numbers figure to skew higher as he is more commonly found in shorter handed games, plus he seems to have tempered his play of late so the 27.1% VPIP may represent his outer extreme.) I'm not enough of a statistician to know how those two extremes would manifest themselves in terms of a contributed rake distribution but my back of the envelope sense is that the difference would not be menaingful enough to move tighter players away from tight/correct play, at least in the mid-limit games.

[ QUOTE ]
I sense that rake distribution is a big issue to the player base. Didn't you see the vehemence with which I was attacked in the Zoo for pointing out the logical facts of the situation? The TAGs that dominate the player base there now have a large self-interest in maintaining the status quo on rake distribution.

[/ QUOTE ]

To be frank, I thought the other guy was making a better case. From the standpoint that you may be motivated by simple fairness I think its admirable that you're rallying for a change as a contributed distribution method is the fairest method. If you are willing to work against your own self interest to promote fairness, that's a credit to you.

[ QUOTE ]
But, the very fact that TAGs dominate the games there makes the site unappealing

[/ QUOTE ]

You're one of those TAGs. You play well and as far as I can tell you win. You also have a VPIP of 15% in full ring. You make the games tough, but the rakeback (and bonus) makes the games appealing. I fail to be able to take a pejorative view of players who play well.

[Benjamin]

[ QUOTE ]
I fail to be able to take a pejorative view of players who play well.


[/ QUOTE ]

No pejorative view here, just an acknowledgment that a table full of TAGs is generally a difficult table to make money at, and so is unappealing to me, and, I know, a lot of other players.

[ QUOTE ]
To be frank, I thought the other guy was making a better case.

[/ QUOTE ]

I'm surprised you take that point of view. Ignoring logic and viciously attacking your opponent can be persuasive to onlookers, though. It's a regular tactic in politics and is difficult to combat, if it's allowed in the debate. Hence my moving the discussion to a board where such tactics are not allowed.