Why Merge Should Lower Their Fixed Limit Rake

Some poker players sing a requiem for Limit Holdem. They think it’s dead. It’s not. About 20% of all poker hands played are still of the Fixed Limit variety of Texas Holdem. But only a small portion of these are played on the Merge network. Why? Because they’re strangling the games with high rake.

Sites like PokerStars understand that Fixed Limit needs a different rake structure from No Limit. Due to the nature of the game, a typical player will see more than three times as many flops in Limit as in No Limit. (In a sample of 90k hands, I saw the flop 31% of the time in Limit compared to 7.7% in No Limit.) Under a no flop/no drop policy, this means a Limit Holdem player gets raked three times as often as a No Limit player.

The solution is to increase the increments by which rake is taken. In a $1/$2 game, that means not raking the pot until it hits $5. In a $2/$4 game, it means not raking until the pot hits $20. This allows the Limit Holdem rake to fall closer in line with No Limit. Merge is raking the pot as soon as it hits $.20. The charts below illustrate the difference in rake between Merge and its US-friendly competitor, Cake. Notice how Cake rake moves up in steps while Merge rake follows a smoother line.
$1/$2 LHE Rake Comparison
$2/$4 LHE Rake Comparison
The pale yellow area shows the extra rake that Merge is taking. Does this mean that they’re making more money than they would with a lower rake? No. The rake is so high that playing Limit Holdem below $10/$20 is an unsustainable endeavor. They’re suffocating their traffic by preventing anyone from flourishing. There are many high-volume players who won’t play on Merge because of the rake. If they cut rake by 30% and double their traffic, they could increase profits by 40%.

Limit Holdem should be a goldmine for online poker sites. Edges are thinner than in No Limit, so recreational players last longer. They can’t blow off their whole stack in one hand. And the typical loose style of a recreational player is less costly in Limit, since proper play involves playing many hands and seeing lots of showdowns. Being stubborn is an asset, not the liability it is in No Limit.

I sincerely hope Merge listens to its customers, because they have the opportunity to be a leader in online Limit Holdem. They have quality software and reasonable deposit and withdrawal options for US players. If they make their rake equally reasonable, Limit players will flock to their tables.

Where the Hell Have I Been?

Casinos, not-so-seedy underground New York card clubs, and on my couch, watching Mad Men, mostly. I was going to write a blog reviewing the first six months after Black Friday, but it's looking more like seven now. I've enjoyed live poker a fair bit, but while the games are softer, it turns out to be a harder way to make a living than playing online. That's not to say it's impossible or not worthwhile. It just requires a larger bankroll relative to your hourly expectation, and even more patience.

I've played around on the US-friendly sites a bit, although the high rake and lack of game selection is frustrating. And the software! If you live anywhere but here, count your lucky Stars. It's easy to take excellence for granted.

I've managed to squeeze out a few videos here and there, even dipping my toes in the No Limit Holdem pond. But lately I've been thinking about writing a lot. I banged out this little story on 11/11: http://freeassn.com/drupal/node/99. It's my first flash fiction piece. More to come. For now, it's back to the poker tables, both physical and pixelated.