The Effects Of The Rake

Economics, Poker Concepts

April 4, 2008

Something rather silly happened on today. One of the group’s less observant participants claimed that if you play 1/3 NL or bigger in a casino, the effects of the rake and other expenses are minimized. Fact is, that’s far from the truth. You have to play MUCH bigger than 1/3 NL before the rake and your other costs don’t have a major impact. To illustrate the point, I put together what I think is a fairly conservative list of expenses for a 1/3 NL player, and looked at what that did to your win rate.

Rake, tip, and incidental expenses make a huge difference at a game like 1/3 NL. Suppose you’re crushing the game & would beat it for 25 BB per 100 hands on average if it weren’t raked, and the dealers are pretty decent so you get 35 hands/hour on average. Those are both optimistic numbers. Now, that translates to $75/100hands, and $26.25 per hour. That’s not a bad rate – it’s about what an average entry level college grad makes.
But wait, you win an average of 3 pots per hour. We’ll say $3 rake per pot (assuming a $4 rake that doesn’t always get maxed out) and there’s a jackpot drop of $1. Now you’re only making $14.25 an hour. That’s more like vocational school money. But wait, you tip $1/hand you win. Now you’re making $11.25 – McDonalds manager money. But wait – you get a drink per hour, and tip the drink girl $1. Make that $10.25. And you drive 45 minutes to the card room each way, consuming $10 in gas. And you tip $1 to the chip runner at the start of your session, for $11 in fixed expenses per session – we’ll say it’s a 6 hour session. Now you’re making $8.42 per hour. Which puts you just slightly ahead of this guy

That is until he gets promoted to assistant manager, at which point he’ll probably be out-earning you.

Moral of the story: rake and expenses turn poker into a menial job in a hurry if you play too small, even if you’re an incredible player who can crush the games.

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