Friday, April 28, 2006

The Holy Grail, Rake Free Poker

Last night I signed up with the World Poker Exchange which currently offers rake free poker. If you have not heard of the site before, believe me it's true. They use a typical rake schedule (5% up to $3/hand), but each week they refund the rake taken back to your account. In the cashier window, you can see the rake you have accumulated for the week and when the next payout date is. The reason they do it this way is so you can see for yourself how much money you are saving by playing on their site. It's kind of a marketing trick, but for no rake I am totally cool with it. The site is affiliated with a major online sports book. Their explanation for offering rake free poker, is to drive up account growth and in turn drive the new accounts into sports betting and casino type wagering where they make good money. If you think about it, the costs of running an online poker site are pretty small. This site which already has the infrastructure to manage online cash accounts and support, simply needed to add some new software, and some servers to deal with the additional poker traffic. So for a small expense, they can get some more accounts, and drive the growth of their core business. Plus, like all other sites, they make interest (Juice) on the account balances that never is passed to the players. Meaning they potentially could be profitable in the operation by itself without charging a rake.

If you think about it the rake charged by other online sites is obscene, and looks a lot like price fixing. The 5%, $3 max/hand rake is very similar to the better Vegas brick and mortar casinos rake structure. Card rooms and Indian casinos sometimes charge a flat $3-4 per hand which is quite a bit higher. Comparing the operating expenses of an online poker room vs. a brick and mortar, is not even close. Brick and mortars, have to pay for the dealers, floor personnel, poker tables, shuffle machines, cards, chips, chairs, floor space, AC, lights, and more. All expenses that online rooms do not have. Online poker rooms have to pay for servers and the electricity to run them, and a software and support staff. Their biggest expense is probably marketing. The fact that they charge a similar rake is a joke. The fact that there is really no rake competition online is a bigger joke. Also, the number of hands played is at least 2x online vs. live, so the rake generated is 2x per table. These guys could survive with a much lower rake structure, but are not willing to budge it seems. Hopefully, rake free poker will force their hand so to speak.

I played some rake-free this afternoon, and I have to say it's no different then the other sites out there. The traffic is pretty light at about 1200 players, but I was able to get on full 10 player .50/1 and .25/50 nl holdem tables. Its too early to get a real good feel for the play, but it appears to be pretty weak. Lots of short stacks at the table, and lots of limp-in community pots. The software is pretty decent to. I heard rumors that the site is full of bots, and good players, but I can see no evidence of that. My session was pretty much break even through about 100 hands. If you get a chance, please give it a try. I am not affiliated in any way, but would love to see the traffic go up to the point where the rake sites have to take notice. You really have nothing to lose, and have rake to gain. It effectively reduces poker to the zero sum game it is supposed to be. Why not be a winning player if you can beat 50% of the players, vs. having to beat 80-90% of the players at a raked site. Try it, I think you will like it.


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