Small stakes No-Limit Hold’em remains as the most popular poker genre in the world, despite some games such as Lowball, Triple Draw and Omaha making there way to the forefront. It’s so popular because it’s the easier form of poker to find, and the buy-in often won’t cripple your financial account book if you lose. At the same time, you can also win a significant amount of money if you play your cards right, both literally and figuratively. With low buy-in No-Limit Hold’em you have a nice balance between making profit and minimizing losses – something both recreational and professional players can cope with consistently.
Nonetheless, No-Limit Hold’em in its glory was almost exclusively played in side games – whether it be in shady underground environments or more exclusive saloon style venues. It slowly made it’s way into a regulated environment with the establishment of casinos, and with recent regulation preventing a large portion of U.S. residents from playing online, they’re slowly becoming the online place some professionals can continue their craft.
Because of this, casinos have begun to take advantage of both professionals and recreational players by increasing the rake. If you don’t know what rake is, it’s simply a percentage of each pot that’s taken, typically only after you’ve seen a flop. In live settings this can range anywhere from 5-10% of the pot, up to a certain amount, usually around $5. But while this may not seem like a lot at first glance, for small stakes grinders it’s now making the game nearly unbeatable. If you toss in a few other seldom options such as a bad beat jackpot, the rake can cripple even the best players.
Online play has always been the solution, because the rake is lower in relation to pot size and you can also receive rakeback. But how do players who are stuck in the live games still make money with this career-threatening fee? We’ll examine most of the problems, talk about some solutions, and briefly talk about the future of the live games.
It’s easy to understand why low-limit hold’em is so busy. People can buy in more a minimum between $40-$60, and test their luck. Because of the price point, many novices, amateurs or short-stacked professionals will try to use a minimal investment to run up a stack. They don’t mind because if they do lose, they’ll only lose a little. Simultaneously, if they happen to run it up, they’re on cloud nine and often leave immediately or switch tables where they can once again by in for the minimum. It’s not a terrible strategy in a nutshell, but more frustrating than anything else for skilled full-stacked players because it changes the strategy involved.
What short-stacked players should realize (or at least good short-stackers), is that with the increased rake they’re at an extreme disadvantage. Although they will likely limit their range to premium pairs and high-card hands because of the low SPR, if they happen to raise small (which they often do) and get multiple callers (which they often will) unless they hit a harmless flop or hit the flop hard they’ll be bleeding money. It would be very spewy for them to stack of light with A-high, or also get their entire stack involved with both straight and flush draws on board in a multi-way pot. Because of their low SPR and stack size, they want to win flops right away for cheap or get their entire stack involved, but the rake ends up killing them because the pots at tiny and the house takes such a big percentage of that.
In my local game, our casino charges a rake of 10%, up to $6 for every flop seen. So if you pot grows to $60 or more, they’ll end up taking the maximum $6. If we do some math really quickly, we’ll see that if we’re in a heads-up pot, and we divide the pot in half, we’re only winning $30 and they’ll be taking $6 of that away. We net $24. Actually, let’s also include another $1 for the Bad Beat Jackpot that’s running. So now we’ve made $23. While $23 is nice, in percentages the house took away 23% of our total winnings. 23%!!!!! That’s truly astronomical.
It’s not that we’ll never walk away from the casino a winner. So let’s throw that argument out the window. But let’s explain this further: A great and yes I mean GREAT win rate in a live 200NL game would be 15bb per 100 hands. That’s $30 for every 4 hours on average. I say four hours because the live game typically deals about 20-25 hands an hour, both because there’s more people in a ring game (usually 9-10) and uh, we’re humans and not robots. With the help of auto shufflers, dealers get a bit of help and the game moves faster. But even shufflers break down and if we need to go to a manual shuffle, after every hand things could come to a crawl at a snail-like 15-18 hands per hour.
Although we may have won $23 dollars in the example of above, we’re not always going to win that amount. First off, although we are playing No-Limit Hold’em and the pots grow quickly, it’s hard to inflate the pot consistently if we’re playing good strategy. Full-ring live games just don’t lend themselves to maniacal play – it’s both a losing strategy because of the general tightness of the game and it’s also bad in terms of rake because we’ll be playing A TON of hands with marginal holdings and paying more rake. Rake-wise, playing tight-aggressive seems to be the way to go, because we can minimize the amount of rake we pay and still be in pots on occasion. But will we be building the pot often enough to make money? Sure. As long as we don’t deviate too much from a good TAG strategy. Limping into pots should be completely stricken from your repertoire in today’s game, unless you’re certain you can consistently steal limped pots from your opponents because they’re incredibly weak. But if we limp and give up regularly, we’re playing a losing strategy.
Because we can’t play in every hand, let’s give ourselves an estimate of how many hands we will be in. Obviously depending on table image and effective playing style, you’ll need to adjust these numbers. But generally speaking I would estimate that on average the “good” TAG will be playing between 4-6 hands an hour. Let’s just say 5 because that’s the mean. So if we’re dealt a generous 25 hands an hour, we’ll have a 20% VPIP. Hmm, not a terrible number, good be too much depending on the game type, but let’s roll with it because we’re a skilled player. It’s unlikely we’re not raising because we said we were good, so we won’t always see a flop, instead we’ll sometimes take down the blinds and avoid the rake and make a solid profit. We’ll see some showdowns, and also win some healthy pots too. But let’s remember: We’re STILL only going to average 15bb per 100, or $7.50 an hour! Let’s not quit our day job for this amount.
Obviously we could increase the number of hours to make more money, but putting in a ton of hours in a live game is both taxing on the body and not very feasible. Long hours at a casino are difficult to implement because the live game is tedious (boring, exhausting, fold-heavy, any bad adjective you’d like to add), and also there’s a ton of distractions that might hurt you before you even get to the poker room.
When you play live you have to worry about being on a wait list. Because live games don’t have an infinite amount of tables, and you can’t start a new one anytime you wish, you have to go on a community wait list with other players waiting to play. If there’s 5-6 200NL and 300NL tables, but they’re all full and you’re towards the bottom of the list, you could be waiting for hours. So what do you do in the meantime? You drove an hour or so to get to the casino, and now you have to wait! (You should start calling before hand to save time by the way.)
What most players end up doing is visiting the other areas of the casino, but that can kill your bankroll. Hopefully you have money set aside for additional expenses such as food, beverage and maybe gambling, but this isn’t always possible. So otherwise disciplined poker players may spend money on lavish meals, or gamble at another game hoping to run up some cash, only to dwindle away most or even all of the money they game to play poker with. Even if you did manage to save a few buy-ins for poker, if you’ve lost money somewhere else it’s likely your mindset has changed and you’re now trying to recover your money rather than playing a comfortable, sound poker strategy. Being on one or two buy-ins usually isn’t ideal either – you’ll play on scared money, or maybe get coolered quickly against the fish and miss out on an otherwise great money-making opportunity because you didn’t have enough cash.
The casino is there to make money, and if you have to wait long enough they expect to cash in on your attendance in other ways. You may not think it affects you, your game, or even your bankroll, but believe me it does.
Some could argue that rewards such as comps and the bad beat jackpot are the live forms of rakeback. In a way, yes they are. However, the bad beat jackpot doesn’t happen to you frequently enough to make it a reliable form of rakeback. It’s requirements are often steep and rarely occur. Secondly, the comp value from playing poker at most casinos is typically very low. At a local casino in Ontario, Canada they give you a measly $.50 per hour. Other bigger casinos such as those in Las Vegas will throw bigger comps at you, but not everyone plays in Vegas, and most have to make due with modest comp amounts. Once again, not enough to consistently eat dinner with especially with inflated casino menu prices.
One of the only benefits to playing live that still keeps professionals interested is the soft playing fields. There are still a ton of fish, and the setting really hasn’t changed too much over the past 5 years. Because tourists will always travel to visit popular casino destinations, you will rarely have a problem extracting value from a few spots at the table. But the real question is, are we gaining enough value? I don’t believe we are.
Remedy: If you have to play live, the only solution is to move up in stakes. You can try to grind out a small win rate at 200NL, but 300NL is much more profitable and 500NL is better yet. You’ll find that the jump to these stakes in terms of competition isn’t that steep, and there are still a ton of fish to be caught at these respective levels. The rake amount will stay the same based on your casino’s standards, but in relation to the increased pot size you won’t be paying as high of a percentage.
Although playing online poker is significantly tougher, players will be able to increase their win rate through a variety of ways. But before we get into some of those, let’s compare online rake to its live counterpart.
Just as with live rake, you’ll only be paying a rake if you get to see the flop. You’ll still be paying a percentage of every flop seen, however this amount is significantly smaller and the maximum amount of rake taken decreases as well. You might ask, “why is the rake lower online than it is live?” The answer is actually simple logic. Because the online poker rooms can run many more games at once, never have to pay dealers, and can increase or decrease the amount of tables at will, they can simply afford to charge players less because their volume more than makes up for the difference. It’s not that they don’t want to charge as much as the casinos do, it’s just that they have an edge over the casinos in this regard, and need to separate themselves from competition as much as possible. Offering a better rake to the players gives them a competitive edge – one they ultimately need to keep players coming back.
To give them more advantage over casinos, sites and affiliates have established what they call rakeback. Because most players understand that they have to pay rake, and there are programs even capable of calculating what you’ve paid, they also want to be reimbursed for some of that rake if possible. In order to both drive more business to online poker sites and give players what they want, online poker rooms have built relationships with other online poker pages to give money to players. The third-party sites give money, or rake back to players for signing up to the online poker room, and in turn the poker room gives a percentage of their profit from that player’s activity on the site back to the third-party affiliate. It’s truly a win-win-win situation, and by getting rake back even during losing months at the tables you can still come out a significant winner.
Players are the micro-stakes level will still lose the most money in consideration of rake paid, mostly because they’re at the bottom of the totem pole. However, even they will probably make more money long term than the live SSNL players because of rake back and lower rake percentages. The competition is often just as bad, and you’ll be risking less here.
The ratio of rake to pot size is much more fair online, and is one of the biggest characteristics to look out for when choosing an online poker site.
When we talk about ways that online poker is superior to live play, especially in terms of rake, we have to comment on the ability to multi-table. Probably the biggest difference between playing online and live, by playing several tables at a time you’ll be boosting your overall profit by stretching your competitive edge across multiple tables. You can see more hands, go to more showdowns and win more money. It’s not that you’re win rate will shoot up, in fact it may decrease because you have to focus on so many different tables. But you bottom line should increase if you can still manage to play efficiently.
The addition of online tools like database managers, hand histories and HUDs will also allow you to monitor how much you’re winning. Most database managers give you specific charted data on how much you’re paying in rake, and also how much you’re getting in rake back if you have an arrangement with a poker site or third-party. Because the online world and technology has so many ways to keep track of what’s happening, both sites and players are always in tune with their financial vulnerability and modifying the way they can make the most money. This is great for both players and sites alike.
But online play also has one often overlooked advantage over live play. The rewards for contributing to the rake are plentiful! Many online poker rooms have VIP reward systems, which usually involve tiers that players can climb up to receive even more monetary benefit. By contributing to the rake, players will earn points for every dollar given (an industry average). With these points you earn you can redeem them for cash back (on top of rake back), prizes such as televisions, chip sets or computers (all crucial parts of your business expenses), or even luxury items such as cars and trips if you’re a high-stakes player. PokerStars for example has the highest sought after Supernova Elite status, which players such as Randy “nanonoko” Lew have taken to new heights because of their elevation into superstardom. On top of it all, the more you play online, you’ll become a better player through steeper competition and you’ll earn more experience. This will make you a better player overall, allowing you to both analyze your play for further success, and likely dominate the much softer live fields.
Online conclusion: With the increased amount of gaming options, less distractions, less money being spent and increased monetary return online poker is easily the better option. If you can afford it, and withstand the swings, you’ll earn much more money. You have to be well bankrolled to play online unless you go on a heater, considering online poker’s tougher competition. But for the poker savant, nothing is better than earning a living sitting in your PJs leveling your adversaries into submission.
It’s hard to determine exactly what’s going to happen in the world of poker, but the live game has become more difficult to beat, and until online poker returns to players in the U.S. it should only get worse. For high-stakes players in particularly, although you likely have more options in terms of leaving the country, playing live for any significant portion of time is a complete waste because of the minimal EV, and added learning curve of the mixed game formats.
It shouldn’t take very long for legislation to pass so that U.S. players can official become professional players, and pay the appropriate taxes for playing online. It’s been easy to keep track of your winnings, sessions and deductions for tax preparers, even well before Black Friday ever occurred. Live players have a more difficult time because it involves a better memory and more documented results on paper, but that’s just another one of the accepted characteristics of being a professional player.
If you want to beat the live games, you’re going to have to pay bigger. It’s just that simple. I don’t see casinos ever lowering their rake, and playing small buy-in games just want decrease their edge enough to make any long term wins significant. After all, as much as we love the game and hope it improves as a whole, let’s not forget we’re in it for our livelihood, and to make money for ourselves. We can’t change what casinos do, but we can change our own habits.
Let’s use forward thinking.
I hope to see you at the tables.