Tuesday, October 13, 2009

Rakeback Vs. FPPs: Which is better?

Rake is the money that the websites or casinos take out of the pot or out of the tournament prize pool to make a profit. At first glance it doesn't seem overwhelmingly significant, but it's like running into the wind. Over a few steps it doesn't make much difference, but over a few miles you'll be more tired and won't be able to go as far. Hopefully this post will help you get more streamlined.

As I mentioned in a few previous posts I've been shifting away from pokerstars to some degree. Pokerstars is still home and I hope I can make it my exclusive place of play again in the future, and perhaps make Supernova Elite again. But for now the games have been so tough that I've been forced to branch out.

I mentioned rake, but what exactly is rakeback? Well, it's a discount. None of the websites offer this discount directly, but rather through a few third party websites who get a piece of the pie as well for promoting the pokersites and drumming up new business. All of the major websites offer rakeback (except pokerstars) and they all offer about 30% give or take a few percentage points.

That means if you play a $55 tournament with $5 in juice then you'll get back $1.50. If you play 1,000 of those tournaments you'd get back $1,500. It's a little trickier with cash games, but as best I understand it anytime you put money in the pot they say you've contributed to the rake. For example let's say you raise preflop and the small blind folds and the big blind calls. You and the big blind go all the way to the showdown, put in a bunch of money and in the end the site takes $3 out of the pot. Even though two of you put in a lot and one player put in a very small amount it all counts equally. You, the SB and BB have each payed $1 in rake and you personally would get 30 cents back. Everyone else in the hand who got dealt in by didn't put in any money on that hand would get nothing in terms of rakeback.

This money piles up and gets deposited into your account either once a week or once a month.

This is a message for the poker players out there who read this blog; YOU'RE THROWING AWAY INSANE AMOUNTS OF MONEY IF YOU AREN'T GETTING RAKEBACK! Read it again. I mean it. You MUST start playing somewhere where you can get rakeback (with pokerstars being the one exception).

I came across a blog of a fellow poker player who played high stakes SNGs. He had made about $5,000 in the past 8 months in the actual SNG tournament play and $200,000 in rakeback and bonuses!!!

For those of you who want to know how you can get on board, let me tell you how to do that now so you don't get bogged down in the rest of this lengthy post. While I know there are other sites the one I use is rakebacknation.com. I don't know if they are the best, but they've paid me on time, I got a response for support in about an hour when I e-mailed a question, and they have deals with all of the major sites (and a few minor ones too). In short I trust them.

If you want to sign up for rakeback with an existing account, you are probably out of luck (although there is an area to submit an existing account for rakeback consideration). But it's worth it to have your spouse or a friend open a new account and then let you use it. Or you can switch sites. I know how easy it is to get comfortable at one site, but there's no reason to limit your game selection and like I keep saying RAKE BACK IS HUGE! There is a calculator on the site that will show you how much you can get back and it seems accurate to me.

If you want to sign up please do so using the referral code: wes1279. Or by clicking on the link below.

http://www.rakebacknation.com/?affiliate=wes1279

I have no idea what they're going to give me if I sign someone up, but I assume it's not nothing. In fact if you're going to use my magic code (or even if you aren't) please feel free to post any questions you might have in the comments section and I'll help you to the best of my abilities.

I've written a long post already and I haven't even gotten to what the point of this post is supposed to be!

Pokerstars doesn't do rakeback because they have FPPs that are worth something (the other sites have FPPS, or other points for play, but they're not worth nearly as much). But which is better: pokerstars FPP program or rakeback?

Let's start with what it's worth to play on pokerstars. This year I'm going to end up playing about 430,000 hands of $10/$20 and above which is what it takes to generate 600,000 base FPPs. Assuming I did the same next year, as a regular Supernova I'd earn 2,100,000 regular FPPs which would be worth $33,600. I'd also earn $2,000, $3,000, $4,000, $5,000, and $6,000 milestone bonuses along the way which is a total of $20,000. But each bonus actually costs 50,000 FPPs each (which is kind of a stupid mean trick they play on you) so my FPP total would actually drop by 250,000 to 1,850,000 FPPs which are worth $29,600. So for 430,000 hands of 6 handed $10/$20 I'd get back $49,600.

What could I earn playing 430,000 hands on Absolute poker? There are actually 4 components to the AP bonuses I'd earn. The first is rakeback. I'm not entirely sure about this but my best guess after some limited experimentation is that I'm paying about 28 cents per hand in rake (that includes all hands that I'm being dealt in not just the ones in which I contribute to the pot). So at first glace that looks like 430,000 hands times 28 cents per hand which is $120,400 in rake or $36,120. This is pretty close to what the rakeback calculators tell me I'd make in the amount of time it would take to play that many hands.

But there's actually more to it. The second part of the puzzle is AP's VIP program called FAME. Unlike pokerstars where it took me 365 days of last year to make it to the highest level (Supernova Elite), it took me 2 weeks of playing about half time to make it to the highest level on AP (Diamond Elite).

Playing at the diamond elite level I earn 10 VIP points (I think that's what they're called) every time I play a hand where I put money in the pot which is about half the time. As far as I can tell if I play 100 hands I'll earn something like 450 VIP points. Over the course of 430,000 hands that would be 1,935,000 points which are worth $13,723 (the let you convert points to cash at a rate of 141 points to the dollar). That's actually more significant than I thought! Actually I can only trade in $1,000 a month for cash so I'd have to take $1,723 in merchandise or tournament entries.

But wait! There's more! Rakebacknation runs what they call a "rake race" for their customers. They give out a $4,000 prize pool to the 25 of their customers who pay the most rake on AP each month (there are other rake races for other sites). The player who pays the most rake gets $1,000 with 2nd paying $775, third paying $600 and so on. I don't know much about my long term prospects of winning the rake race, but from what I see right now I like my chances. Last month the winner paid about $8,000 in rake, second place paid $7,000 and third place was in the $4,000 range. My plan above would have me paying $10,000 a month on average. Even not giving it my all I'm in second place for this month and was in first for a while. I expect that I could win the rake race at least half the time and finish in the top 3 or 4 every time. Let's call that $9,000.

Amazingly there is even more! AP also offers frequent reload bonuses. In fact there have been 5 days in the past two weeks where they offered a bonus if you made a deposit that day. For example on the 29th of last month they would match 65% of your deposit up to $150 if you entered a code that was advertised right in the lobby. So I deposited $400 and got $150 in bonus money. This money gets released in $5 increments as you earn points. In practice it takes me about 100 hands to release $5. In total I've deposited $2,260 and gotten $1,350 in bonus money. It's going to take me a total of 27,000 hands to release all of that money, so it's far from instant cash, but it's real money and in the end I'm going to get it.

If these past two weeks were typical (which I doubt a little) then I'll be adding 5 cents a hand to my profits (or a little over 15% more to my rakeback) all year long! That would be another $21,500 over the course of 430,000 hands. I think they can get away with offering so many deposit bonuses because they make it hard to cash out. You can't take any money out within 48 hours of a deposit and they have fees for withdawls (which I think is B.S.)

So in total I'd be looking at $36,120 in rakeback, $13,723 in points and $9,000 in rake race for a total of $58,843. That's pretty close to pokerstars, but if you add in the deposit bonanza it's going to look more like $75,000-$80,000 (depending on the size and frequency of the reload bonuses) in rewards. That is shockingly significant and amounts to getting close to two thirds of my rack back. If I can just win a little from the other players I'll be in great shape.

I won't take you through all the math for two other scenarios, but I'll tell you that the more you play the better pokerstars is in comparison. If you play 7,500 hands of $10/$20 in a year, you'll be a silverstar player and only earn $240 in FPPs, but you would have gotten $630 in rakeback and $240 in VIP points! That is a shocking disparity!


If you play 75,000 hands on pokerstars (just enough to make supernova) you'll make $5,880 in FPPs, but could make $6,300 in rakeback and $2,393 in VIP points on Absolute.

On the other hand if you play 750,000 hands (enough to make Supernova Elite) you'll make $37,200 in FPPs (Or $53,142 if you start the year as SNE) and $59,000 in milestone bonuses and major tournament entries. On AP you'd make $63,000 in rake back and $23,936 in VIP points.

Clearly if you can start the year and SNE and make $112,000 that's the best, but otherwise it's $97,000 vs $87,000 which is closer than I thought. Add on the rake race and it's a dead heat. Add on the deposit bonanza and it actually looks better to play on AP than on pokerstars. Surprising! I was sure supernova elite was the best thing out there. I think I underestimated the value of the VIP points since they seemed pretty worthless as I was earning them and in any initial calculations I made I didn't factor in rake races or reload bonuses! This has turned out to be a fruitful exercise!

The big problem with some of this is that pokerstars has all the games. At peak hours you can find 4 $10/$20 games on AP, but I've never seen more than that. Often times I've been stuck playing either $5/$10 or $15/$30 or 9 handed $10/$20 along with one or two $10/$20 games.

Anyway the worst possible thing you could be doing is playing at full tilt with no rakeback. Those points are pretty much garbage and there are no VIP levels.

1 comment:

Matt said...

Dave,

Thank you for such a thorough analysis. I'm sure it was helpful for you too, but it is probably the most useful post you've ever had for your readers.

The thing about Pokerstars is that, if you are playing at low-to-medium levels, the selection of games is just so much better, especially at nights and on weekends. During the day, at the levels you play (medium to medium-high) I could see the competition being a little tough, and so I think it's useful to branch out to other sites. But also, Pokerstars has just been so ultra-reliable ever since their inception that they have really earned my trust, in a way that no other site has.

But I will definitely keep an open mind! And if I open an account at a new site, I will use your referral code. For a small fee, of course. :-)