The impact of rake on poker variance
In today's deep dive into poker variance we look at why more rake is definitely not better for your career prospects.
I have enjoyed writing about variance reduction strategies in poker, which so far has included dropping down in stakes vs playing fewer tables, payout structure, as well as increasing volume. Alongside Dara O'Kearney, we have also previously looked at the variance differences between large and small-field MTTs.
I play mostly PKOs these days and I have started playing GGPoker's Battle Royale PKOs towards the end of my sessions. They are quite fast and only have 30-runners, so they are perfect to wind down a session with. The rake is also very low, it is 5% compared to 7.4% in equivalent MTTs on the site. It is so low in part because of the Battle Royale fast structure.
Rake is such an important consideration in game selection that I wanted to run a test using the variance calculator at Prime Dope to see how significant a rake decrease is.
This is what 20 random simulations would look like in a $50 MTT with 100-runners if we had a 10% ROI, and the rake was 10%.
(r10R10).png)
After 1,000 games in the best-case scenario, we make around $20,000 and in the worst-case scenario we lose just over $10,000. On average we make $5,055. Our risk of losing after 1,000 games is 17% and our required bankroll is $8,201.
Let's now look at what happens if all the details are the same, but the rake in our chosen room is 5% instead of 10%. We had to increase our ROI accordingly because that is what would essentially happen in a lower-raked game, as ROI is based on lots of factors including rake. A rake decrease would be an instant ROI increase.
(r5R15).png)
When we sun run we make almost $30,000, when we run terribly we lose almost exactly $10,000. We make $7,509 on average. Our probability of losing is 9.9% and we need a $7,763 bankroll to avoid going broke.
No surprise that we lose less often in lower-raked games, what did surprise me was how we won much much more when the rake was low. That was the more telling figure for me personally. A high rake makes it harder to win, but even more so it appears to limit our upside when we are winning.
If you are a poker player you don't need telling that more rake certainly is not better, but it's good to put some numbers on it. If all other details are equal, choosing a game with a low rake has an instant boost to your ROI.
How important is rake in your game selection? Let us know in the comments:
