Friday, March 28, 2008

1-2 NLHE Beatability Revisited

Martin- I have a project for you if you can find time during your busy week.

We have all talked at length about the beatability of 1-2 NL games in Vegas. I remain confident that good players can show a consistent profit at these games. (and the bet is still on for whenever the 4 of us can get down there) But while reading Martin's recap post, he put up some interesting numbers regarding rake and cost per orbit. Also, I was just listening to a podcast about cash games called Cash Plays, hosted by Bart Hansen, formerly of Live at the Bike, and PokerRoad Radio. The show is a little dry perhaps, but very good. Bart was talking about the low limit (1-2 and 2-5) games in the LA area, and if he thought they were beatable. His contention was that you could show a profit in the games, but that it would be really hard to actually make livable or good money at the games due to the rake. The casino he used as an example took 5.00 flat fee out of every pot, plus a 1.00 jackpot rake. If you tipped one dollar per hand, that would be 7.00 per pot, every pot. The maximum buy in is 200.00. If we are getting in the average 30 hands per hour, we are talking about taking one persons stack per hour in rake.. Ouch.

I know that on the Strip the rake is generally percentage based and not flat fee, and downtown the rake is even less. Marty, I was wondering if you could do similar breakdowns in hourly cost or how much rake money leaves the table from the players each hour (assuming 30 hands per hour).

I want to see the viewpoint here not of one player vs. the other players at the table like we normally think of poker, but instead of all 9-10 players at the table vs. the house. Maybe just of the top few casinos we play at down there (MGM, Caesars etc), maybe one downtown casino like Binions, and maybe even throw in Full Tilt and even Cake just for perspectives sake.

I think that this topic speaks to Jason's point about the games being unbeatable more than his assessment of the play at these tables. I still think that one can turn a profit, but seeing these numbers laid out in front of you regarding rake and tips, as Martin said, can be quite sobering.


Sushi Cowboy said...

$5/pot flat rate? Seriously? I am not calling anyone a liar or mistaken but it seems like there must be some other conditions. So if the game is 1/2 with one limper, a fold from the SB and a check from the BB then the entire pot is taken away in rake if there is no action on the hand? If so then I'm sure a rake like that would, or at least *should* change players' tactics. I've heard of $5 flat rate seat charges for 30 minutes and up to $5 rakes but I would have to think there is a minimum pot size before pulling a flat $5 out or something. Do you happen to remember the name of the casino?

I suppose poker players will always put up with just about any conditions if it is truly the only game in town but it seems like such an oppressive rake structure would kill the game off and the casino would end up making no money at all in the long run.

As for crunching the numbers, back when Jason first asserted the "unbeatability" of the 1/2 tables I had posted a question on the forum about what the casino's average take was on a 1/2 table and I got a bunch of non-answers. Maybe if I went to 2+2 they would have better info. Most responses were along the lines of 30 hands * $4 of rake, etc. But in reality, not all hands take the full rake out if smaller pots are being played. Plus there are a certain amount of chopped blinds which take zero rake as long as the casino follows a "no flop, no drop" policy.

My initial back of the envelope calculation pegs the house net per table at $80-$100. That is based not only on the rough estimate of up to $4/hand at about 30 hands/hour but also on the the comps. Standard comp for poker is $1/hour. Casinos will comp anywhere from 10% to 40% of what they expect to take from you. So if the casino is willing to give back $10/hour in comps to a full table of 10 players, then I feel better about $100/hour being the ceiling.

I'm sure the casinos are thinking that if it weren't for that idiot Moneymaker making poker so popular they would probably pave over all of the poker rooms with slots so they could get more ROI out of that floorspace since poker is not a big cash cow for them. It is very low variance since the house cannot "lose" like it can in table games but it is also low yield compared to other games that they spread. As I recall the rake does not increase (or at least increase substantially) based on stakes. The tables playing 10/20 NL still only get raked a few bucks a hand though they obviously max out far more often than the 1/2 tables.

Not much more analysis I can do without solid numbers. But assuming a nice round $100/hour/table, clearly it is impossible for everyone to be EV+ or even EV neutral. Las Vegas has the constant flow of tourists to feed the tables. Even the upper end of the spectrum like on HSP there are players with more money than skill who stop by and feed the pros on TV or in Bobby's Room. There are the players who are longterm EV- but don't care because they are only in it for the fun or the action. There are players who are in it because they can't stop. But given that table games of complete chance continue to keep Las Vegas in business, I don't see how poker tables will ever dry up completely.

Rake's a bitch. Big rake is a bigger bitch. I *heart* rake free poker.

Sushi Cowboy said...

And while we are on the topic, I ran across and article by Negreanu that discussed the relationship between playing styles and rake vs. seat charge. Depending on whether you like playing lots of small pots or just wait for monster pots, you will get taxed differently depending on how the house takes their money. I'll post if I run across it again.

jtrey333 said...

At bay101, I experienced the $5/hand take personally and posted about it. Just sick.

Sushi Cowboy said...

But Bay 101 had $10 of money in the pot before any action and going to the flop meant at least $12 if there were a call from the SB. A flat rate of $5/pot is still steep but less so than at a 1/2 table.

jason said...

I know we have beat this horse to death so I will try to be brief. I doubt there is anyone in Vegas or elsewhere that is making a living playing $1/$2 NL Hold'em in live casino play. By a living I mean something remotely reasonable to live on, like $50,000 annually or more. You can definitely clear this much waiting tables or parking cars in Vegas. All the players that you read about making living wages either multi table tournament play on line, or play high stakes on line, or play high stakes in casinos.

There are definitely players in Vegas that are EV+ at $1/$2 NL. They know where and when to play and where the softest competition is but I doubt they make a decent living.

As great as the players are at WNP, I still don't think that anyone will be EV positive playing at some of the tough tables I ran into. Given the right conditions any one of the WNP players can definitely be EV positive.

If you find anyone who claims to make a living at the $1/$2 tables in live casino play, let me know, I have been wrong before.

Marshall said...

Just to be clear Jase, I never claimed (nor did anyone I don't think) that someone could earn a living at 1-2 in Vegas. I, in fact, don't think you really could very easily.

However, our bet stands, and we have Martin, myself, Jeh, and mb to show as 4 of the last 5 WNP'ers made money in Vegas on our last trips.

The tables you played out are irrelevant, but we already covered that, haven't we?

jtrey333 said...

For the record: Extremely tough for someone to make a living playing 1-2NL in Vegas.

However, I absolutely believe the 1-2NL games are very beatable. The vast majority of tables I've sat at and witnessed were EV+ IMO. Nothing I've experienced has changed that.

I know Jason hasn't seen my twitter, so I'll sum it up - I was just in Vegas and with limited time, played two 2-hours sessions. Ended up $262 in a very short time. And it wasn't challenging to do so. I just picked my spots, played straight up TAG, and used position along with targeting the fish to get there. Easy money, easy formula.

Sushi Cowboy said...

After further digesting this, I discovered a flaw in my logic. I think that it is deceiving to compare two $40 pots in a 1/2 and 1/3 game since the 1/3 game (for the same relative action) would have a larger pot. Now in the case of the magical number 40 it doesn't matter because that is exactly where the rake caps out. But any number lower than that and you start comparing red apples with green apples; close but not exactly the same. Presumably each 1/3 pot is going to be marginally larger than a corresponding 1/2 pot and winning at the same relative rate (as in number of hands and size relative to the BB) would mean you will be winning larger pots relative to the blinds at the 1/3 table which cuts down on the effective rake since more pots will max out the rake.

Tom Watson said...

The maximum buy in is 200.00. If we are getting in the average 30 hands per hour, we are talking about taking one persons stack per hour in rake. Sophie