Why do bonuses require a deposit?

[ImsaKidd]

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Even though I've paid over $4,000 in rake this month alone, I am still costing the sites I play at money.



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How is this? You're taking money from fish, not the site.

[pzhon]

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You're taking money from fish, not the site.

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In addition to the many bonuses I receive, I pump money out of the system. If I weren't involved, the money would be churned around more, and much more of it would be converted to rake.

Imagine you have a bank, though you offer no interest. You do sell (rake-shaped) gill massagers for $100 that cost you nothing. Mr. Fish deposits $1000, and you project that he will buy 5 gill massagers, then withdraw the remaining $500. You expect to profit $500. Then Mr. Shark deposits $100, and Mr. Fish transfers $1000 to him. Mr. Shark buys 1 gill massager, then withdraws $1000. Your profit was $100. How valuable of a customer was Mr. Shark to you? -$400, not +$100.

I may be a particularly worthless customer because I mainly play NL and tournaments. Winning low stakes limit players often convert about as much money into rake as they transfer into their own accounts, but in NL (or high stakes limit), your win rate can be several times the rake.

[ImsaKidd]

You might be taking money out of the system, but you are still playing.

In your example: whenever mr fish transfers $$ to mr shark, the bank gets a cut of it. Your example isnt accurate because mr.fish would continually be depositing.

I'm pretty sure any player is good for the site, because every player generates rake. Bonus whores are less valuable, but all normal players are rougly equal IMO.

[paperboyNC]

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You might be taking money out of the system, but you are still playing.

I'm pretty sure any player is good for the site, because every player generates rake. Bonus whores are less valuable, but all normal players are rougly equal IMO.

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You may be pretty sure, but you are wrong. Ideal players keep playing until they lose all they deposit. Any players that are so good that they accelerate the losses of fish, or that withdraw significant sums, hurt the profit of a poker site.

[WordWhiz]

A concrete example: 10 fish sit down with $100 each. They have equal ability and equal luck. Eventually, the rake will eat all $1,000 of the money at the table.

Now make it 9 fish and 1 shark. The shark takes some time to take all the fish's money. Let's say he's got every last dime at a point where there's only been $300 raked so far. The shark leaves with his $600 profit, which would have gone to rake had he been another fish.

[TenFiftyFour]

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A concrete example: 10 fish sit down with $100 each. They have equal ability and equal luck. Eventually, the rake will eat all $1,000 of the money at the table.

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I've heard this example before, and while I understand what you're saying, it can't be right. The rake will take a chunk of that money, but it can never take all $1000. What does the last hand look like? Two players left, with exactly equal and tiny stacks - and then the rake takes all of it? The pot disappears?

A more realistic situation would be that one player remains at the end, and most likely with more than his starting $100. Since he can't keep playing by himself and lose that money to the rake, he will leave the table as a winning player. He will presumably go on to generate more rake later, at a new table with new players (who have more money to give to the rake).

I do agree with what you are saying about the presence of the shark. The fish on their own will eventually lose a substantial sum of their money. If the shark accelerates that process by taking some money for himself, the less there is for the rake to take at that time.

[MicroBob]

All of us winning players on the site combine to keep the tables going.

Lets say 90 break-even or losing players.
5 winning players and each are on 2 or 3 tables.

These winning players do make a difference in the games continuing.

They need to fill the seats somehow.

Without the winning players there just wouldn't be as many tables going to churn out all that rake.
Obviously the winning players help the sites profit also.

It could be argued that by playing on so many tables at once that they are possibly MORE valuable than many of the losing players.

Think about how many fewer tables there would be going at a time without all the multi-tabling TAG's around.
Think about how much faster the games would just die out from getting short-handed.

[pzhon]

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Obviously the winning players help the sites profit also.

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It's obvious that winning players pay rake. There are several people on this thread who are arguing that the value to the site is not the obvious nominal value of the rake paid, and may be negative. Here are two possibilities:

1) We've somehow missed the obvious, despite acknowledging it repeatedly. This is like the possibility that a bettor is on a pure bluff, and so is the guy who called in front of you.

2) There is something nonobvious we're trying to communicate to those who may have noticed only the superficial. This is like a value bet with the nuts when there is an obvious second best hand that can be made with one card.


Reasonable models have been given showing that the addition of winning players can decrease the amount of money left in a site. These have implicitly used one consistent system of accounting, the net deposits. Another consistent accounting method is to add up the rake taken by table, and you can also see the impact of winning players by using this method although it is harder to see. In the long run, the addition of winning players may decrease the number of games running by increasing the number of players who are sitting out because they ran out of poker money, who are waiting for the next paycheck.

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Think about how much faster the games would just die out from getting short-handed.


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I mentioned prop players earlier on this thread. At times it is worthwhile for sites to pay props 100% rakeback to help fill games, but at times it is not. However, even when sites correctly hire props, they may have a clear preference for hiring props who do not win too rapidly. A prop who wins too efficiently might be bad for the site while a break-even prop would be good for the site.

[MrMon]

Winning players are valuable precisely because they do win. Think about it, why do people play poker? Because they want to win. Even in games that are purely random, where continually playing eventually gives your money to the house, people play because they know someone who has won. If no one won, who would play? Even rigged games like 3-card monte require someone to at least APPEAR to be winning.

You need to go beyond the mathematics of what's ideal for the house and look to the psychology of meeting the needs of the customer. The ideal customer for a business would be one who hands over their money and asks nothing in return. Rational human beings don't do that, they only exchange their money for something they value. In gambling, that thing of value is the chance to win. Take that away and there is no game, and thus no profit.