In a recent article, poker pro Daniel Laidlaw and former Crown Poker and Aussie Millions TD Christian Vaughan debated on the rake increases announced as part of the 2015 Aussie Millions schedule. Now, Laidlaw is back with a reply to Vaughan’s arguments.
Read: ‘2015 Aussie Millions: Rake Debate – Two sides of the coin’
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In his reply to my piece, Christian Vaughan provides us with some insight into the economic reality of operating a poker room within a casino. In explaining how Crown Poker is answerable to Crown for its financial performance, I think he supports my point that to the owners, there is no intrinsic difference between poker and baccarat. All that matters is the bottom line.
The main point of my original article was to point out that rake cannot continue to rise if tournament poker – under my conception of it as a game of skill distinct from other table games – is to remain a game that can be played for profit by players.
There must be a rake cap.
From Christian's insightful article, we now know that the operators work backwards from the costs of running an event, and derive rake from there. There is no official recognition of the necessity of a rake cap. Because we know that costs must continue to rise, we also know that the rake will continue to increase, and therefore that the distinction between poker and other negative EV forms of gambling will eventually become blurred. It will become like baccarat – everyone will lose except Crown, and the best players will just lose the least.
Once this is acknowledged, all that's really up for debate is at what point in the future the tipping point will occur – when will the expected return on investment for players become small enough that numbers drop away to the point that these tournaments no longer run? Or, will Crown's marketers always convince enough punters to play at any rake level despite the fact that no one can win?
What will happen then, when it’s partly a function of how much attention is brought to the issue, since tournament poker thrives, in part, based on how its image is sold to the public by its operators and their media partners. Poker championships like the Aussie Millions are marketed to the public on the premise that a trophy / ring / bracelet has intrinsic value, and that there is potentially a lot of money to be made (you might become a TV professional!). But neither of those things are really true. In reality, tournament players are playing for an hourly wage, just like any other job, albeit one with a huge amount of variance (see my blog ‘Poker and Business – a cash game perspective’).
The irony, however, is that tournament poker is sometimes portrayed as a sport. I don't see it as such, but the analogy definitely cannot hold true without a rake cap. What kind of sport would hold competitions, for money, in which the champions have a negative expectation on their cost of entry?
I agree that raising the buy-in levels is probably not the answer (I never suggested this in my first piece). Also the problem is not that a 10.87% rake is unbeatable, just that it very clearly will not end there, as the introduction of the new Deep Freeze event at 13.3% demonstrates. This is the thin end of the wedge, if you will.
At the end of his article, I fear that Christian invites what in socio-economic theory is known as a "race to the bottom". As the rake goes up, more professionals will stop playing the tournaments and travelling to Australia for the series. This will, in turn, make the fields softer than before. This will then attract more professionals to enter again, as they perceive their edge to be big enough to overcome the rake. Which will encourage Crown to raise the rake further to meet their expenses. And so on – to the point where the field has a huge number of players with a negative expectation, and a small percentage of pros with a miniscule ROI grinding out a tiny hourly wage.
I still don't have the solution, but if you want to play tournaments for profit, this sucks.
Obviously, we're not owed a living. Poker pros are essentially parasites at the fringes of the economy, feeding off the crumbs of capitalism. Still, it was cool that this live tournament window opened up to us for a while, and it will be sad to watch it close inch by inch.
Follow Daniel on Twitter @Choparno
