On the face of it, the Steps tournaments at PartyPoker don't look like a
very good deal, at least at the lower levels. You are locking your money
into a multi-tiered satellite structure where it will be raked every step
of
the way. I haven't seen anyone else crunch the numbers, so for those that
are interested, I thought I'd analyze just how bad a deal it is.
The nominal rake percentage at each Step ranges from 6% to just over 9%.
That doesn't sound too terrible, but if you start at the bottom with a
$11+$1 tournament, your money gets raked 5 times on the way to the top.
That means only 68% of the money makes it to the cash payouts.
That sounds bad enough, but it's actually much worse, because that 68%
figure assumes the money rises straight to the top, getting raked once at
each Step. However, the money is not rising straight to the top. At each
level, some of the money is being cycled back to lower levels (or kept at
the same level) to go through even more of the rake process.
The end result of all that raking can't be calculated with a simple
equation. You'd have to use linear algebra techniques that would give me
a
splitting headache if I even thought about them. Screw that. If someone
wants to go through that hassle, more power to them.
Luckily, though, the effective rake *can* be calculated numerically using
a
simple iterative process on a spreadsheet, which is what I did. If anyone
wants to see how I did it, I can elaborate, but for now I'll just present
the conclusions.
In the end, if you put a million people into the Steps at level 1, each
paying $12 (for a total of $12 million), only $3.44 million would ever get
paid out to any players. The other $8.56 million (71% of the money) would
be gobbled up by PartyPoker in rake.
Put another way, that $11+$1 tournament is really a $3.44 + $8.56
tournament.
Here are the effective rakes for each Step, assuming you buy into that
Step
directly. Most of the numbers are rounded off to the nearest dollar.
Step Nominal buy-in Effective buy-in
1 $11+$1 $3.44+$8.56
2 $50+$5 $25+$30
3 $200+$15 $138+$77
4 $500+$35 $434+$101
5 $1000+$65 $1000+$65
When you consider the fact that the top level is also infested by sharks,
the deal is incredibly bad. Except, of course, for the sharks, who are
not
stupid enough to pay all that rake.
A word to the wise is sufficient
|
