SPOILER ALERT: It’s probably not what you think.
There are two potential problems with any “beatable” skill-based game that can keep casual players from participating. Not surprisingly, these factors play a key role in determining which poker games catch on, and which games are destined for the scrap heap.
The two factors are:
This column is going to focus on the latter, but first I’ll provide a quick overview of the former.
Complexity has two components:
- learning curve
- user friendliness
Most casino games with a negative expectation, even the ones with elements of skill, don’t require much, or in some cases any, knowledge to play correctly. On the other hand, beatable games require a greater time commitment to reach a level of competency. So it shouldn’t be overly surprising that the number of slot players in a casino are much greater than the number of poker players.
As an aside, this is the main reason I think the “millennial problem” is dramatically overblown. People might be willing to invest some of their free time towards improving, but for most this commitment will be trivial; anything more complex is a game they’re unlikely to play.
Furthermore, games with over-complicated rules are often unappealing to the masses. Even if your game is the best thing since sliced bread, if you can’t explain the rules relatively quickly, most people will move on and never bother to learn your game.
Imbalance also has two components:
- Luck vs. skill
- Segregation by skill
The balance between luck and skill determines the edge of the players who have put in the time and effort to excel. While it would seem only fitting that the game’s rules would be geared towards the hard workers, it’s also important to make sure novice players have some chance of winning, otherwise only highly-skilled people would play, and you end up with a situation like you see in chess, where there aren’t any slouches challenging grand masters to games.
A great anecdote that highlights this was recently told to me by Mason Malmuth.
According to Mason, back in the day there was a very popular Seven Card Stud game (I forget the exact details of the stakes and such) that had a relatively high ante. This luck-increasing aspect of the game created a really good mixture of long-term winning players and recreational players, since the high ante made it impossible to sit back and wait for premium hands, increasing the chances a bad player could book big sessions when they got lucky.
Mason went on to note that when a new person tried to resurrect the game in a different casino they changed the structure by lowering the ante, thereby rewarding more skillful play. The person thought this would be to the benefit of everyone, after all, who wouldn’t prefer paying less?
To make a long story short, the game dried up. The good players could tighten up, making the game less fun and decreasing the chances a bad player could book a big win, and in doing so the good players also beat the recreational players more soundly.
The bottom line is this: Skill is good, and needed, but too much skill is a death sentence for a game.
The second aspect of balance, segregation, is what I really want to focus on, as it has a lot to do with the current changes taking place in the world of online poker, and also why what is considered a “player-friendly” environment, or what is billed as the best place to play, isn’t necessarily the case.
Chess and backgammon federation use rating systems in order to make sure the skill level between competitors is close enough for matches to be competitive. Poker doesn’t possess a ranking system, and players of all skill levels mingle at almost every stake level.
That being said, there is some natural segregation in poker. You don’t find too many rank amateurs in high-stakes games, and you don’t find too many top-level talents in micro-stakes games, which leads me to my main point.
Unintended consequences of rake reductions
For any type of work there is a threshold (this obviously varies from person to person) that needs to be met in order to accept the job. Some people might snap-accept putting in 12-hour days of backbreaking labor for $10/hour. Others might hear the job details and say, “I wouldn’t do that job for $100 an hour.”
The point is, there is a floor to the amount of money a person needs to make in order to perform virtually any task, even playing online poker.
In terms of work, online poker player seems like a pretty cushy job, and a job people would likely do for very little money. Still, they’ll need to make some amount of money to find it worthwhile, especially if they can get a raise simply by going to work at the grocery store.
With this in mind, imagine if $.01/$.02 NLHE was rake free, but the $.05/$.10 NLHE tables at the same site used a normal rake; where do you think the better players would wind up playing?
Without answering the question, what happens when you make certain stakes beatable, or more profitable, is you erase the natural barriers that were in place that were keeping the fox out of the henhouse.
For instance, if mass multi-tabling $.05/$.10 is beatable for $5/hour you’ll have very few grinders playing these games. There’s simply not enough money to be won to make it worthwhile. If it’s unbeatable (because of the rake) you’ll have virtually no grinders. And finally, if it’s beatable for $10/hour you’ll see more grinders at these stakes, as we’ve increased the potential earnings from playing these stakes.
As the chart at the end of this post indicates, the more money you can beat a certain stakes for, the more winning players you’ll attract.
Basically, if $10 NLHE is beatable for $6/hour, only 5% of the population of competent players will play those stakes for that amount of money. If it’s beatable for $11/hour the number of players willing to grind those stakes jumps to over 50%, based on my very general assumptions.
So what happens when we reduce the rake (assuming other barriers aren’t also in place, such as software bans or multi-tabling caps) is you attract predators to what was previously an isolated ecosystem. You’ve essentially created an isthmus linking an island of predators with an island of prey.
I firmly believe competent players crush recreational players far quicker than a high rake could ever hope to do. Not only do they beat them faster, but the style employed by mass multi-tablers also makes the game unappealing.
Instead of losing 10% of their stack per 100 hands to the rake, these players are now losing 20% of their stack every 100 hands to winning players. Even without a rake, they’re still losing faster.
A low rake seems like a godsend for casual players, but the reality is that unless the site has erected other fences to keep the predators at bay, all it does is entice a higher percentage of good players into these games.