The importance of rakeback for Low Volume/Micro Grinders

    • trickybob
      trickybob
      Bronze
      Joined: 28.07.2010 Posts: 914
      I see a lot of threads and posts asking this question. Here is my view:

      I play e20NL at 24h.

      Last month I earned e266. I played 13k hands and HEM tells me that I won at 10bb/100 hands. I ran above EV, which is always nice, and last month was a good month.

      I paid the site e214 in rake. That rake comes out of pots I've won. I don't pay any rake for hands I don't play and I don't pay any rake for hands I lose. This is absolutely crucial to get your head around - the rake you pay the site comes out of your winnings.

      I actual beat the game for e480 - winning at about 18bb/100. But I paid the site about 8bb/100 for playing there.

      That means that unless I beat the game for 16bb/100, the site will earn more than I do from my hard work and grind.

      This is also crucial to get your head around - the site earns a high bb/100 from you and does this without having to battle variance, tilt, maintain relationships, having a life outside of poker, the hard work and study you put in, the affects it has on your job and any of the other things that us micro grinders have to contend with.

      If I have a decent month, lets say 4bb/100, the site take two thirds of my profit, because I've beaten the game for 12bb/100

      It's a hefty tax right?

      But, with rakeback they gave me e80 back. So it now it reads my profit for the month = e344 (266 + 80) and their charges/tax/rake = 134 (214 - 80).

      On top of that I got a little cherry in the form of e30 from the rake race that poker strategy runs for the site. This is obviously for tracked accounts.

      Now it reads e374 for me and e104 for them.

      Also, this month 24h have a rake race of their own. I won't place because the micro race is for 50NL and lower and I won't generate enough gross rake with the level and volume I play - but it's another opportunity to claw some back.

      Think of rake back and rake races as a tax rebate.

      Some key points:

      Micro grinders will pay between 6-10bb/100 depending on the site/the game you play e.g. full or 6max/ how the rake is collected (weighted, contributed etc) and your style of play (tight players pay less, loose players pay more).

      The cap for pots becomes affective at somewhere around 50Nl - 100Nl. That is to say that beyond 100Nl the bb/100 decreases with each level higher you go because the sites pot cap is fixed. I have never played successfully at 100Nl so haven't fully worked this out yet. If anyone knows more about the rake issue at higher level, please add.

      VIP/reward programs are set up so that they favour Low Stakes+/High Volume players. They don't favour Micro Stakes/Low Volume players. It is possible to play 100k hands a month at $25NL and get a reasonable % return from a VIP/Reward programme.

      My advice is when you check your monthly graphs check how much rake you paid and how much rakeback you could have earned vs how much VIP/reward you've been given.

      This takes minutes.

      Of all the poker decisions you make as Low Volume/Micro Grinder this will be right up there as one of the most important. Take the time to analyse this part of your game.

      VIP/reward programmes are not set up to help Low Volume (less than 100k hands a month)/ Micro Grinders.

      And don't forget - if you have a losing month you're still paying the site out of the money you did win. If you lost -5bb/100 and paid the site 8bb/100 in rake you actually beat the game for +3bb/100. Rakeback of 30% would have got you back to a loss of about -2bb/100 and rake races and other bonuses might have got you back to somewhere near break even.

      Make whatever decision you want, but make sure it's an informed one.

      It might be useful for people to post a recent month of results so that site/volume and game types can be compared.

      If this is already happening elsewhere - then could a mod just post this there and let me know where it's gone. Ty
  • 23 replies
    • mallikarim
      mallikarim
      Bronze
      Joined: 02.12.2010 Posts: 104
      Problem is only site with rakeback that I would play on is full tilt ...ahem.
    • fractalsonfire
      fractalsonfire
      Bronze
      Joined: 01.02.2011 Posts: 140
      Yeah full tilt, 27% rakeback, great software, rush poker, lotsa tables. So good. Though pokerstars software is slightly better for multitablers, i would love to go back to FTP if they still had the 27% rb through pokerstrategy.
    • Quadzzzzzzz
      Quadzzzzzzz
      Bronze
      Joined: 24.10.2011 Posts: 151
      very interesting post, made me think a little bit about rake and rakeback, specially when player at the lower stakes!
    • ThatGuyMatt
      ThatGuyMatt
      Bronze
      Joined: 03.12.2010 Posts: 3,759
      Interesting post there, you clearly put in alot of effort!

      I first thought "Oh no, A wall of Text..." But you surprised me, a very good read!

      I've noticed this before in my stats, I have since deleted my Database, but i can remember, 30k Hands at NL6, I won $300ish and my rake was $250 or there abouts. You never notice it during play so much but damn, if only rake wasn't so much :(

      I did get around $100 or so in rakeback though, so its not all bad :D
    • conall88
      conall88
      Bronze
      Joined: 02.01.2009 Posts: 1,715
      my thought is, hourly rate is king. stop worrying about rake/rakeback, and starting thinking more globally about what affects your winrate, and how you can manipulate the situation so that it becomes more profitable for you.
    • esuohdla
      esuohdla
      Bronze
      Joined: 08.05.2011 Posts: 411
      All in all I think the worst decision you can currently make is to play 100k hands/month at 25NL. Even if it gives you a higher hourly you will struggle to improve your game at all, my bet would be to improve your game until you feel able to beat 100NL+ where the rake is much more reasonable.
    • EagleStar88
      EagleStar88
      Bronze
      Joined: 06.10.2008 Posts: 7,359
      Interesting post/thread tricky and great to see everyone really thinking about the wider concepts etc.

      Just don't forget that without paying the rake you wouldn't have the profit or opportunity to make a profit at all ;)

      Poker rooms invest vast sums of money into drawing players in, players that (assuming you have an edge against them which is what PokerStrategy.com is all about ;) ) provide you with the profit over time.

      Everything in life comes at a cost, but most are worth paying ;)

      Keep up the impressive results & enjoy your poker.

      Best regards,


      Bart
    • Tarhonya
      Tarhonya
      Bronze
      Joined: 18.07.2010 Posts: 694
      Originally posted by trickybob
      VIP/reward programmes are not set up to help Low Volume (less than 100k hands a month)/ Micro Grinders.
      There's no VIP reward system that favours low volume players, because they are not paying much to the site.

      Flat rakeback on the other hand does that which may seem better. However, what's the point of general flat rakeback?
      Deception. It creates the illusion that you're getting paid by the site however it's just simply means that their rake is actually lower by the percentage of the rakeback (which might still be average or even higher). This works because while you're not noticing the deductions in each pot at the tables, you'll definetly notice when you're getting a piece of all what you've paid back in form of rakeback.

      The rake on the micros is HUGE, that is true and should be reduced as much as possible, but I think way too many players are giving up or at least greatly reduce their opportunity of improvement by switching into high volume play to early (on the micros), where the rake reward is still not significant.
    • MatejM47
      MatejM47
      Black
      Joined: 21.01.2010 Posts: 1,193
      Low stakes players don't really have a better rake ratio. The rake is really high untill you get to nl200 where it gets down to 5bb/100 and it get way easier to get high VIP lvls and place on top of rake races and other promos that can easily get you up to 40-50% rakeback.

      On nl100 and lower the cap doesn't really matter since unless its an all-in pot the cap doesnt have any effect so the rake is pretty much the same. You pretty much should aim to get to NL200 since the games are not that much tougher and with you paying much less rake it really evens out the toughness of the games.
    • trickybob
      trickybob
      Bronze
      Joined: 28.07.2010 Posts: 914
      Apologies for the slow response time. My daughter has informed me that if I start a thread, I should respond to those who take the time to post on it. :facepalm:

      @ mallikarim & fractalsonfire

      yes I totally agree, FT had it all - great software, rakeback, reasonable bonuses on top of the rakeback and plenty of choice - including Rush. Pity it was run by idiots/crooks.

      @ Quadzzzzzzz & MattDenness & EagleStar88

      Ty for feedback. Eagles, you are of course right, but I still think the amount we micro players pay is too high ... a different topic/thread perhaps.

      @conall88

      Whatever your hourly rate is, depending on where you play, you can add to the bottom line of gross income. By making an informed choice you could improve your effective hourly rate quite considerably by choice of site. There are many pros playing at low/medium stakes who do not obtain significant hourly rates, but make their living from rakeback and rake races. What I think counts most is the money in your account.

      @ esuohdla

      I agree, but it works for some. I have come to the conclusion, for me at present, that quality is more important than quantity - but this is more variance susceptible and that in turn makes it more difficult to maintain quality play. It's a tough balancing act.

      @ Tarhonya & MatejM47

      I think you both make valid points and demonstrates the need for more info/research into rates before making decisions.

      Ty all for posting. :f_thumbsup:
    • Kyyberi
      Kyyberi
      Coach
      Coach
      Joined: 09.07.2010 Posts: 10,635
      There are 2 things to look in micro stakes rake system. What is the rake percentage and cap? And what kind of rakeback you might get with rakeback, bonuses and promotions (rake races, iron man etc.).

      Some players think that rakeback isn't a big deal, if you beat the games you beat the games. Clearly they have no idea of how big of an impact the rake does in micros.

      I have played 9290 hands this year in PLO10. I have paid $302 in rake. That is 30 buy ins! So with 30% rakeback I would have get 10bin back. Now if one wants to move up in stakes, that is a lot of money. If my winrate was 10bb/100, I would have still won more from the rakeback.

      Those hands were played with 6% rake. If the rake would have been 5%, I would have paid $251 in rake. So without any rakebacks, that 1% more in rake means $51 less winnings in 9290 hands. In other terms, it takes over 5bb/100 away from my winrate.

      Now, if we think that rakeback is useless, here is an example. Those same hands, in network of 6% rake without any rakeback and then in 5% rake + 30% rakeback. Player has won 10bb/100 in those hands with 6% rake:

      6% rake: winnings 10bb/100.
      5% rake + 30% rakeback: 24bb/100

      So there is a BIG difference.

      Please also note that 6% rake with 45% rakeback is worse than a 3% rake without any rakeback.

      But I also agree in that when playing at micros, you shouldn't be focused to only winnings. Good player will win even without rakeback, so focus on improving your game. If you barely beat NL10, don't rush to NL25 or higher.
    • patszerdonk
      patszerdonk
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      Joined: 19.05.2011 Posts: 834
      micro PLO rake ~30 bb/100 :(
    • Jehryn
      Jehryn
      Bronze
      Joined: 15.04.2008 Posts: 678
      I feel RB should be COMPLETELY disregarded at the micro stakes. This is for the simple reason that at those level your ONLY focus should be on improving your game, i.e. playing a low amount of tables and focusing intensely on each hand. Chasing RB leads to mindless grinding which will keep you from getting better. (also RK at micro is to low to even consider).
    • Wriggers
      Wriggers
      Bronze
      Joined: 21.07.2009 Posts: 3,250
      Originally posted by Jehryn
      I feel RB should be COMPLETELY disregarded at the micro stakes. This is for the simple reason that at those level your ONLY focus should be on improving your game, i.e. playing a low amount of tables and focusing intensely on each hand. Chasing RB leads to mindless grinding which will keep you from getting better. (also RK at micro is to low to even consider).
      I disagree with this post. Yes we should focus on improving in order to move up but rakeback can move you up a lot faster. As Kyberi pointed out, the rake at the micros is huge, I mean, to even beat PLO20 you need a 22bb/100+ edge over the opposition, which is huge in my opinion. Players who improve their game regularly will achieve this, but the rake makes a huge dent in your winrate when you as a player are already beating the game, so with a nice 50% rakeback deal or something you can move up much quicker and therefore get to a point where rake isn't completely crushing you.

      Imo rakeback is vital to micro stakes players who are striving to move up. If we say the difference in skill level between PLO10 and PLO50 isn't that big (Which I don't believe it it) then the effect of the difference in rake is huge, since PLO10 rake is over 25bb/100 and I think PLO50 rake is about 15bb/100. This means that a very good PLO10 player could probably beat PLO50, but without rakeback it makes it a very slow process to build your bankroll up enough to reach PLO50, even though you could well be good enough to beat it.

      Bit of a rambling post I know but i'm in a rush :D
    • Jehryn
      Jehryn
      Bronze
      Joined: 15.04.2008 Posts: 678
      Originally posted by Wriggers
      Originally posted by Jehryn
      I feel RB should be COMPLETELY disregarded at the micro stakes. This is for the simple reason that at those level your ONLY focus should be on improving your game, i.e. playing a low amount of tables and focusing intensely on each hand. Chasing RB leads to mindless grinding which will keep you from getting better. (also RK at micro is to low to even consider).
      I disagree with this post. Yes we should focus on improving in order to move up but rakeback can move you up a lot faster. As Kyberi pointed out, the rake at the micros is huge, I mean, to even beat PLO20 you need a 22bb/100+ edge over the opposition, which is huge in my opinion. Players who improve their game regularly will achieve this, but the rake makes a huge dent in your winrate when you as a player are already beating the game, so with a nice 50% rakeback deal or something you can move up much quicker and therefore get to a point where rake isn't completely crushing you.

      Imo rakeback is vital to micro stakes players who are striving to move up. If we say the difference in skill level between PLO10 and PLO50 isn't that big (Which I don't believe it it) then the effect of the difference in rake is huge, since PLO10 rake is over 25bb/100 and I think PLO50 rake is about 15bb/100. This means that a very good PLO10 player could probably beat PLO50, but without rakeback it makes it a very slow process to build your bankroll up enough to reach PLO50, even though you could well be good enough to beat it.

      Bit of a rambling post I know but i'm in a rush :D
      The focus on moving up as fast as possible in itself is wrong imho.

      Regardless whether you play PLO10 or PLO50, the focus should always be to improve as a poker player. The rake at PLO10 is indeed massive, but that also means that when you beat PLO10 consistently, you know you are ready for the higher limits. Simply playing a higher limit in the hopes that the decreased rake is more than the decreased profits from playing against better players is shortsighted and most likely unsuccesfull. Also, what will you do if a downswing forces your BR below a safe level for PLO50? Moving down isn't exactly an option since you can't beat the rake and playing PLO under BRM is a certain road to disaster.

      Since the mental state of a player is also Incredibly important with PLO, I believe it is important to build a solid foundation at a low level to build confidence, poker skills and to have a place to return to when/if a massive downswing crushes your BR.

      The faster you try to run, the more painful the fall :D
    • Wriggers
      Wriggers
      Bronze
      Joined: 21.07.2009 Posts: 3,250
      What i'm saying is that if someone already has the skill level to beat PLO10, and is beating it for, let's say 4bb/100, this actually means he has ~30bb/100 edge over his opponents, and with a 50% rakeback deal he will be beating it for more like 16bb/100. Which will mean he can move up to a level that isn't much different skill wise, but has much lower rake 4 times faster than if he was playing without rakeback.

      I'm obviously not condoning being a rakeback whore and getting a 70% rakeback deal, not improving and playing breakeven poker in order to build a bankroll to move up, but I am saying that a rakeback deal significantly speeds up the process of moving through the limits if you're already a winning player.
    • Vygantas82
      Vygantas82
      Bronze
      Joined: 02.04.2010 Posts: 361
      I feel RB should be COMPLETELY disregarded at the micro stakes. This is for the simple reason that at those level your ONLY focus should be on improving your game, i.e. playing a low amount of tables and focusing intensely on each hand. Chasing RB leads to mindless grinding which will keep you from getting better. (also RK at micro is to low to even consider).


      when i was learning STT on cake poker i was playing ones with 1 $ buy in and was getting ~20 $ rakeback per month. 20 buyins! on FTP when i was playing cash at nl2 i was getting 5-6 $ per weak with is almost 3 buyins. So your post makes absolutely no sense
    • Jehryn
      Jehryn
      Bronze
      Joined: 15.04.2008 Posts: 678
      @Vygantas

      Don't misunderstand me, obviously getting RB is fun since getting $ is always fun, But the real question you need to answer is: Do I Beat My Level? If yes, then RK is a nice bonus but it isn't required since you already make money just playing at your level.

      @Wriggers

      "If you're already a winning player" :P

      When you are consistently winning then sure focus on RK deals to improve your $/100h, but becoming a winning player come before that.
    • phantommm92
      phantommm92
      Bronze
      Joined: 14.05.2010 Posts: 1,464
      Originally posted by Jehryn
      @Vygantas

      Don't misunderstand me, obviously getting RB is fun since getting $ is always fun, But the real question you need to answer is: Do I Beat My Level? If yes, then RK is a nice bonus but it isn't required since you already make money just playing at your level.

      @Wriggers

      "If you're already a winning player" :P

      When you are consistently winning then sure focus on RK deals to improve your $/100h, but becoming a winning player come before that.
      holy shit, that's new
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