Thursday, May 31, 2012

What is the best fee structure for poker players?

(Another in my series of posts addressing what I think poker players should want from a card room.)

In Los Angeles, the rake tends to be $1 taken from the pot before the flop and another $5 after the flop, including $1 for the jackpot drop. In Las Vegas, it used to be as low as $4 with the fourth dollar not being taken out until the pot reached $80 or even $120. In higher-limit games (10-20 NL and above or 100-200 limit or above), the players usually pay "time," which means they pay something like $5-$15 to the house every half hour, but the pots are left unadulterated.

Nobody likes paying these fees, but we all acknowledge that the casino needs money to for all sorts of expenses and would like to make a profit on top of that. This does not mean that players should just accept whatever fees are levied and by whatever means the casino pleases. Not all fee structures are equally bad for players, and, whatever the structure, a smaller fee is clearly better. So, what structure is best for casino poker players? Can we do better? How much does the size of the fee really matter? Should we be "comparison shopping" and pressing the casinos to keep their fees low?


First, let's do a comparison of paying rake versus "time."

Effect on winnings: If you are playing in a 9-handed NLHE game, you will likely play about 30 hands per hour and win about 3. If you play tight and take a break once in a while, this is probably closer to 2.5 hands won per hour. Time games cost about $10-$25 per hour plus maybe $3 in tips. In a raked game, it costs $7 per hand won, including tip. Multiplying by 2.5, this gives $17.50 per hour. This corresponds to a $14.50/hour time game (assuming $3 of tipping per hour). This means that if you are a tight player, most time games are slightly more expensive.

Most players do not chop in time games, but most players do chop in raked games. It's probably better for you if your opponents chop because the game will go faster. This probably adds one or two hands per hour. The downside is that you don't get to watch your opponent's heads-up strategy as often if they are chopping, but I think an extra hand or two should be worth more than this extra information.

As I've said before, taking money from a pot rewards and encourages tighter play, which is bad for the game, especially NLHE. Adding money to the pot has the reverse effect. You are effectively playing higher stakes when you pay time instead of rake.

The advantage here really depends on the size of the rake or time fee. Time fees are usually slightly higher, but this is offset by chopping and increased pot sizes.

Effect on social experience: The time games encourage players to stay at the table, lest they waste hands they already paid for. Most players like this, but I find it annoying. I like taking a few leisurely breaks during a session, and I don't mind if the game becomes shorthanded.

Rake games encourage chopping the blinds, which helps the game go faster. On the other hand, if you don't chop, you might have some upset neighbors in a rake game.

Slight advantage to time games.

Effect on game purity: Time fees preserve the purity of the game. Rake fees alter the pot size and encourage chopping. This is especially problematic in low-limit games where the rake is a large percentage of the pot.

Advantage to time games.

Time games often cost a couple extra dollars per hour to play. I think it's worth it for game purity and social experience, but only if it's not too expensive. In higher-limit games, the rake does not disrupt the game too much and I would only pay an extra $3 or so per hour to play a time game. Even this might be too extravagant. That's an extra $3000 per year if you are a pro playing 1000 hours.


How important is the size of the fee?

If you do some comparison shopping, you can likely find a place that takes $1 or $2 less in rake ($2.50 to $7 or so per hour) or charges $5 or so less per hour in time fees. An amateur player might play 100-200 hours a year, which comes to around $500-$1000. A pro might pay an extra $5000-$10,000 per year. I'd say it's a very significant but not overwhelming concern.


What is the ideal fee structure? Well, I identified problems with both rake and time fees. The rake affects the purity of the game and rewards tighter play. The time fees unduly discourage taking breaks. The following idea fixes both problems:

Make the button pay the fee each hand. Like a "hand fee," only it's paid just by the player who has the best position. The one drawback here is that you can't really adjust the fee to the size of the pot like you can with a rake, and if there is no flop it's still only fair to charge the button the full amount. If this results in the game being too expensive, the casinos can start charging $4/hand instead of $5 (for example).

If someone pays his blinds but skips his button, treat it as if he missed a blind -- that is, he must post or wait for the blinds to reach him before he gets another hand. This fixes the problems with both the rake and time fees.

Are any new problems likely to arise with this solution? Any way players will try to "game the system" other than skipping the button, which I already addressed? I can't think of any.


I am considering playing in the WSOP main event this year. (I might look into selling up to fifty 1% shares in my winnings. Is that legal?) It's something that I almost feel I should do; playing the main event would be a great way to cap off my poker career, and it's something that people always ask me about when they hear I played professionally. Considering that I haven't played recently, my EV is surely lower than ever, but my enjoyment would probably be higher than ever.

Still, Noon to 12:30 am for days on end? That is too much poker!

Friday, May 18, 2012

Should Poker Players Point Out Dealer Errors?

I think so, but this may be specific to my own peculiar view.

At a poker table, it is the dealer's job to make sure the game is being played by the book. Some dealers are better at this than others, and even the best dealers make occasional mistakes. Bets are miscounted, hands are misread, players are directed to play out of turn, anti-collusion rules go unenforced, pots are split incorrectly, and any number of other mistakes can happen. When I notice these things, I like to point them out and get them corrected, but when I do some other players sometimes get upset. Should I be pointing these things out? Let's look at the main factors.

1. Effect on my winnings. 
The only direct effect is that I will usually point out errors even if they were in my favor, such as an opponent putting in two many chips to call a bet. I lose money when I do that.

One indirect factor is the effect of either upsetting or pleasing other players. However, there's not that much they can do about it, and not many people take these things very personally, anyway.

Another indirect factor is that new players might feel more comfortable in the casino, which may help to make the average competition a little softer.

This category is a wash, with maybe a tiny advantage to NOT pointing out errors, especially those errors that directly result in more chips for myself.

2. Effect on the social atmosphere.
Usually, if I don't point out an error, it will go unnoticed by whomever it hurt. So, by pointing out the errors, I might be making the social atmosphere a little more tense.

An indirect effect is that everyone can relax a little more about the whether the rules are being followed. We can trust that somebody else will usually point out any mistakes.

Another indirect effect is that players might trust each other a little more, which I think encourages a better social atmosphere in the long run.

For me, the major reason I like to point out any errors I see is that the alternative is unfair to inexperienced players and players who are new to a casino. For inexperienced players, they obviously are less likely to realize if a mistake has been made. For players new to a casino, they suffer from the fact that the other players are likely to know each other and be inclined to look out for each other. So, errors that were made in the new players' favor are more likely to be pointed out and reversed, putting new players at an unfair disadvantage. When this happens, the social atmosphere becomes much worse. However, these situations are rarely so clear cut as to make a big difference.

Personally, I just feel better if I do what feels like the "right" thing, so I would be particularly uncomfortable if I ignored errors. You may be different.

Advantage to pointing out errors, but this may be partly specific to myself.

3. Effect on the purity of the game. This depends on what you think "pure" poker means. To me, it means a game of poker played by the rules, but other purists might argue that poker should be a purely individualistic game, and no player should say anything that could help another player out, even if it's just to ensure that rules are being followed.

Advantage to pointing out errors, but players with different philosophies may disagree.

I personally would certainly like it if players took a more active role in policing their games, but it doesn't seem likely that we could overturn the prevailing mentality that players should avoid getting involved in other players' hands.


I accepted a spot in the PhD program in statistics at UMBC.


I've been posting on a blog called "Skepolitical," a portmanteau of "skeptic" and "political." My most recent post was on Attachment Parenting.

Sunday, May 13, 2012

Should No Limit Holdem Players Want Antes in Their Games?

Two of the main triggers of the poker boom in the 2000's, the movie Rounders and ESPN's well-produced broadcast of the WSOP (especially the Moneymaker victory), both specifically glorified the game of no-limit holdem. Rounders famously quoted Doyle Brunson calling NLHE the "Cadillac of poker games." Brand-new poker players came to the casinos looking for holdem games, especially no-limit holdem games. Before long, veteran stud players migrated to the no-limit games hoping to prey upon the newbies. The result is that, compared to holdem games, stud games have plummeted in popularity since the 1990's. Today, stud games feel downright antiquated.

One distinguishing feature of stud games is that they use antes, and, as a result, antes now seem as antiquated as the stud games they're used for. Actually, while antes are almost never used in NLHE cash games, they do usually come into play in the later rounds of tournaments. This is cause for consternation among some tournament players, mostly because the antes increase the effect of luck as compared to skill. Perhaps ironically, then, one place you can occasionally see antes in NLHE cash games is in the very high-stakes games, where you might expect the players to want to maximize the importance of skill. The reason they like antes is that many of these top players have recognized the problem I mentioned midway through my previous post on jackpots: standard NLHE has very little action if everyone in the game is playing a strong, solid, tight and aggressive game. To fix this problem, top pros have sometimes decided to add antes to their games. So, should the rest of us be advocating for the introduction of antes into our NLHE games? Probably, but let's look at the major considerations.

1. Maximizing winnings.
2. Having an enjoyable social experience.
3. Having a pure, intellectually stimulating game of poker.

All three factors have opposing forces that I will attempt to weigh against each other.

1. Maximizing winnings: If you are a strong player with a given set of opponents, your EV will probably be slightly improved if you are using an ante. With more action, you will be correct to play more hands, and this will give you more opportunities to use your superior skill against your opponents. Also, there will be more money in each pot, which means more potential profit. There are two major drawbacks, however. First, your expected volatility will certainly rise substantially because the antes directly increase the luck factor and, with more money being bet, you will effectively be playing higher stakes. This will possibly force you to move down to lower stakes. Second, your typical opponent's biggest weakness, playing too many hands, will suddenly become much less of a liability. Your weak opponents will be playing better even if they fail to adjust for the introduction of the ante. This is all subjective, but my guess is that these factors give a bit of a net boost to EV.

The previous paragraph assumes "a given set of opponents," but we must  also consider the effect on the player supply in an ante game versus a no-ante game. In the short run, only good players seem likely to want to use antes. The first players who will want to make the move to "ante NLHE" are those who are confident in their ability to adjust to the new strategic challenges posed by the introduction of an ante and those who recognize the problem I just described with NLHE losing action if you are at a table of solid players. We can expect that these players are better than average, and they will certainly not be novices. Despite this, I think that in the long run, bad players will really enjoy the antes. Having more action and higher volatility is way more fun. If we can get to the point where antes are no longer a novel concept, novices will be happy to play with them. In the long run, which is what I'm primarily concerned with in these blog posts, I think the antes will attract more bad players than good players because of the increased luck factor. Another small net positive for EV.

2. Social experience: For most people, getting to play more hands is more fun. Sure, there will be the odd player who likes to sit back and wait for AA or KK, but who needs those guys anyway? Others will object to the increased luck factor, but just as many will enjoy it. In the short run, some players will be put off by the novelty of antes, but others (such as myself) like thinking about novel strategic situations, and in any case the novelty will wear off. A net positive.

3. Pure, stimulating game of poker: Some purists, including yours truly, are just concerned with having a robust, stimulating, fairly-played game, unencumbered by factors introduced by the casino such as jackpots, rakes, or confusing rules or promotions. The antes affect none of these factors except that they have the potential to engender a much more stimulating game by discouraging tight, nitty play. Some purists additionally want a traditional or low-luck game of poker. For these players, the antes may be a problem. From my perspective, however, the antes represent a major boon to the game itself.

Many of the factors above relate to my personal preferences, which may make it hard to convince other players (or my readers) to come to my side if they are not already so inclined. For example, if you understand the importance of having luck in a poker game (this is what attracts the bad players) but you still think it's better to try to minimize it, there's not much I can do to convince you that antes would be a good thing. Also, my approximations on the effect on EV are certainly up for debate. However, if you agree with me on these factors (and you should!) then you'll agree that introducing antes is a really good idea.

I wonder whether we can ever really make the jump to adding antes in lower stakes games. Perhaps it's like the QWERTY keyboard: research shows it's not optimal, but it's just not worth making the switch. It's not surprising that the high-stakes NLHE games were the first to adopt antes. Nobody playing those stakes is going to have an issue with getting outside their comfort zone to play a slightly novel form of poker. (Well, maybe Andy Beal.) They're not worried about scaring away new players, and they are looking to maximize the amount of action in their games. It's also possible that these high stakes games have fewer action players and are thus more prone to going cold.

All of these factors that encourage the use of antes diminish as you go down in stakes. What I think needs to happen for antes to become prevalent is for enough regular players to realize that the top pros are playing with antes. When that happens, the game will no longer look as weird and novel as a Dvorak keyboard. In the meantime, regular players can advocate for antes by convincing their fellow poker players that antes are a good thing and by asking their floor men to make "interest" lists for ante games.