Poker: Rake and Bumhunting
I agree with the general point. If a site is upset about bumhunting, they should acknowledge that it's their fault it's happening. For anyone not poker – bumhunting is when good players only play against bad ones, rather than each other. Because poker sites rake each hand that reaches the flop, if you're playing against equally skilled opponents, in the long term you all lose. If you're playing against worse opponents, they can lose faster to you than the rake removes money from the game, so you can win. The lower the rake, the closer in skill you can be to your opponents and still win.
The unique selling point of poker over other popular online gambling games is that players can win. For a poker site to claw out a space in the market, it's a vital point to understand. If the site starts trying to get rid of winning players, they end up competing with casino games (often from their own company), and if you continue along this path, casino games are much better suited to these remaining players than your poker site is. High rake erodes poker's USP.
But there's quite a lot I disagree with in common takes on this, and I think most of my disagreements come from experience of running a site, so having access to information most players likely haven't considered.
Players Are Not Price Sensitive
The general point is true – players are not sensitive to rake changes. When I was Head of Poker at Unibet, I was very eager to have the lowest rake possible at NL4, and we launched with 1% rake to 50c cap. If NL4 players were price sensitive, we would expect Unibet to steal all NL4 traffic from our competitors, and I can assure you that that did not happen.
We knew in advance that players wouldn't flock to us for our NL4 rake though. We did it because we knew most new players test the waters in the lowest stake games. We wanted those new players to stay alive as long as possible.
If they were new to the site but experienced at poker, we wanted them to get used to the site, learn the unique features we had, and be comfortable playing their normal game there.
If they were new to poker, we wanted to keep them alive as long as possible, to let them learn that poker is a fun game, and to decide that they should make another deposit.
And if they were players who were used to NL4, we wanted them to move up to NL10. Increasing their win rate by reducing rake boosts their chances of doing so.
Of course, NL4 is not NL400. You would expect players in the latter to be more savvy. The site with the lowest rake at that game is hard to gauge for a player. I looked at a dozen for this article. Without any promotions, loyalty scheme, or affiliate deals, that site is PokerStars. The second is PartyPoker. If you include RIO's Splash The Pot (a promotion that runs all the time regardless of the amount you play, so it's fair to consider it), it's RIO – about 10% lower than PS. But, as much as I like about what RIO do (and I've done some work with them, full disclosure), they are far from having the lion's share of online NL400 play.
Rake Is Obscured From Players
You may be wondering how I can say x is 10% lower than y. If one site rakes 4% to 100c at NL50 and another 5% to 75c, which is lower? You have too little information to tell, because you need to know the distribution of pot sizes from each hand in that game. You then have to calculate it over tens or hundreds of thousands of hands. No player has the dataset to do that for every game, at all times of the day – but the sites do.
Poker rake is obscured from players in many situations, and even with the best intentions from the site, players cannot easily gauge price. Another industry that does this – though I think entirely intentionally – is consumer banking, with its opaque pricing structures. People very rarely move banks for price considerations, and online poker is the same, as shown by Unibet's NL4 games and RIO's NL400.
At one point, we spent a month with lower rake at PL25, because I was worried the games were too expensive – I think it was the game with the highest rake in bb/100 from the site's perspective, so I reduced it by about a third. We did it without announcing anywhere, and not one single player noticed. There was nothing sent to support, nothing on 2+2 and nothing from any of my friends who played those games. I ended up taking the decision to keep it low (then we did announce it – and nobody said 'oh, I saw, but didn't want to tell you in case it wasn't on purpose') because my analysis said it was paying for itself. Players were not notably price sensitive here either – if they were, they would have noticed, like you would if your favourite takeaway halved its prices without fanfare.
The Real Solution Is Product
But anyway, you may remember that I agree with the general point, it's just that I disagree with the diagnosis. We had higher rake in the highest games we ran at Unibet, but it was not uncommon for us to have more NL400 tables running than PokerStars did, and I don't think we ever had fewer than Party, despite their lower rake.
The reason those games ran more on Unibet than (say) Party wasn't due to rake, it was due to product decisions. No table selection, no HUDs, alias changes, promotions aimed at keeping weaker players alive for longer, no external software, etc. This is what led those games to run more often than on any other site.
Here's the issue for sites complaining about bumhunters — it's your fucking fault, not ours.
This is entirely right. But the solution isn't primarily rake – it's product.
Poker Is Not Zero Sum
In a lot of these conversations, there's an unspoken assumption that poker is a zero sum game. Either the best players get the money or the site does. But this is wrong, because the games are not static. Player acquisition and churn rates are a site's two most important metrics.
A few years ago, I saw my boss deposit $500 on Party and sit at an empty NL400 table. He just played for fun and wasn't a winner on the site. The table immediately filled – and I mean within two seconds – and as soon as he lost his buyin, every other player sat out. It took about 10 minutes. Now, can I blame those other players, with seating scripts and predatory instincts? Of course not! They're acting in their own best interests. But can I blame my boss for wanting to never play on the site again?
This is, absolutely, the site's own fucking fault. With no table selection, no fixed aliases, no way to see who is seated right now, and no external programs, my boss would have at least felt he was fairly losing his money, as he inevitably would. It would have taken a bit longer, but he would have felt a lot better about it. And the key point: he would have felt a lot better about making another deposit on another day. He has a better chance of becoming intrigued by the game.
This is why poker sites are not zero sum. He is an extreme example, but he would happily deposit a couple hundred euros and play casino games on his lunch break. A more normal example might be the person who sometimes buys a new video game to play that month, but sometimes deposits €50 and plays NL10 for their entertainment instead. These are the people we want coming in to poker, not Starburst or Big Bad Wolf or whatever. Lower rake has very little impact on them compared to product changes.
This is why Unibet succeeded with their relaunch. Not only did NL400 run more often than e.g. Party, who had lower rake, they were some of the softest games around. Players acted in their own best interests, they made more money, and the site made more money. This is the solution to bumhunting.