Timed to coincide with the player boycott of PokerStars, 888poker announced a reduction in Pot Limit Omaha (PLO) rake at stakes of $1/$2 and above from 5% to 2.5%.
After just a week 888poker reset PLO rake to its original level. A spokesperson explained that “liquidity has been higher but only slightly. This is not enough to compensate for the significant decrease in rake collected. We did not intend for this change to be permanent but we were open to that option if there were a significant increase in liquidity which we have so far not seen.”
Liquidity refers to the volume of players at a particular game and stake level. It is a critical issue for poker operators determining what games they can spread at what stakes.
888’s move to reduce PLO rake looked like an attempt to attract players from PokerStars. Many serious online players were not playing for three days from December 1 to December 3 in protest at the VIP rewards reductions planned for 2016. Rakeback.com’s recommended alternatives for players looking to find a new online poker room are here.
The headline rake reduction from 5% to 2.5% looked like a 50% cut in rake, but in practise the reduction is much smaller because of the impact of rake caps.
When a pot reaches a certain size, the rake cap comes into effect, so that all additional money put in is not raked.
Using Rakeback.com’s proprietary rake calculator the actual rake reductions amount to:
A PLO200 player, where blinds are $1/$2, who has a win rate of 4bb/100 under the 5% rake and plays 50,000 hands a month will win $4,000 a month. At the 5% level, he is paying 12bb/100 in rake, or a massive $12,000 a month. The $4,000 he takes home each month actual means he has won $16,000 from other players, with the majority going to pay the rake.
At this level of play on 888poker, he will also get rakeback of approximately 30% which will add another $3,600 to his monthly income giving him grand total of $7,600.
After the reduction 2.5% rake, but with the caps unchanged, he will pay 7.5bb/100 in rake--$7,500 in rake. He is still wining a grand total of $16,000 from other players, so his winnings will increase by the difference in rake to $8,500.
However, his rakeback will reduce from $3,600 to $2,250 since he is paying less rake. Putting the numbers together, his monthly income should rise from $7,600 to $10,750 if rake is cut to 2.5%.
Even thought the cut in rake by 50% didn’t lead to a reduction in rake of 50% because of the caps, the importance of rake and Rakeback in comparison with the amount our example player wins means the reduction made a 41% increase in his monthly profits.
Rakeback.com has always focused on data, not opinion. If you want to understand rake better, and how you should take it into account when planning your play, you can find a series of articles explaining the subject in detail on our Poker Strategy page.
If you are in the US and can’t play at 888poker, we recommend playing at Americas Cardroom which has the liquidity to spread the full range of PLO games.
Register now for Rakeback.com Rakeback at Americas Cardroom
By Joss Wood Rakeback.com Content Manager
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