I have a math problem for you. If you can do simple multiplying and division in your head then you don’t need a pencil and paper. Otherwise go grab them.
Jim, Andrei, and Pam have a weekly poker game with five other friends. It’s a $2-$4 limit game of HOSE (Hold’em, Omaha/8, Stud, and 7-Stud/8). The game rotates from house to house each week. One week they decide to have fun and go to a new poker room that’s just opened up in their neighborhood. They’ve heard it’s a lively place, the house supplies dealers, chips, cards, drinks, food, and everything else necessary for a good game. So they go.
Sure enough, the place is a blast—professional dealers, waitresses that deliver free drinks delivered to the table, comfortable chairs, a beautiful table, and a buffet. What’s not to like?
Since there are eight of them, the house offers to spread whatever they’d like. They decide on their home game, $2-$4 HOSE. The house charges their standard rake of 10 percent up to a maximum of $4, along with a $1 deduction for the bad beat jackpot. Players tip the dealer $1 when they win a pot.
They start to play at 2 p.m., eating and drinking right at the table, taking breaks just to go to the bathroom, and never stopping the game. Just as in their home game, they’re fairly loose and wild, with most pots multi-way and fairly large. Even so, the excellent professional dealers average 30 hands an hour.
They each buy-in for $200. They stop the game at 2 a.m. In the home game, Jim has twice the win rate of Andrei, who has twice the win rate of Pam, who averages one big bet an hour. The rest of the players in the game are losers. Assuming that Jim, Andrei, and Pam each average their exact home game win rate in the poker room, and no one wins the rare bad beat jackpot, how much money will each of them have at the end of the night?
Think you have an answer? At 2 a.m., when the game stops, how much money does Jim have, how much does Andrei have, and how much does Pam have?
The answer is that they all have exactly the same amount of money. They will each have absolutely nothing.
Let’s do the math. If the house takes a $4 rake, a $1 bad beat jackpot, and the players tip $1 a hand and there are 30 hands an hour—assuming large multi-way pots of $50 or more each—that’s $180 an hour taken from the players. In ten hours that’s $1,800. In twelve hours that’s $2,160. They brought a total of $1,600 ($200 for each of eight players). So the house has taken all of their money and then some.
Yeah, I know this wouldn’t actually happen. You can’t rake a game to absolute zero. It would break first. But you get my point, no?
It’s not sexy, I know. It’s kind of like talking about birth control right before sex. Even so, it’s an important subject for all poker players. The rake can be a killer—a silent killer.
Let me be clear, the rake isn’t evil. Poker rooms aren’t bad for charging it. It’s the price of playing. I understand that. Even so, it’s something that every player should be aware of. Over $2,000 in 12 hours per table in the example I cited above. That’s a lot of money that these folks have paid for the privilege of playing somewhere other than at home.
That being said, all is not doom and gloom. Players can still make money playing poker, even with a rake. We also have some control over how the rake affects our bottom line. I’ll address that in my next article.
Ashley Adams is the author of Winning 7-Card Stud and Winning No Limit Low Limit Hold’em. He hosts the radio show House of Cards, broadcast Mondays at 5 – 6 p.m. in Boston, MA, on 1510 AM, and on the Internet at www.houseofcardsradio.com. Contact Ashley at asha34@aol.com.
