Whether your analysis is right or wrong is irrelevant. People can play $12
to win $9000. This means that $12 leaves their poker account (not
$3.44+$8.56 or $25+$30 or whatever) - that's all people care about = -$12
On Dec 15 2004 5:27 PM, D wrote:
> 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
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