By James Spillane, Rakeback.com Staff Writer
Many poker players first heard the term 'true percentage rake' when PokerStars switched to this method of rake collection in January 2012, as part of their annual tweaks (usually improvements) to rake and their VIP program. Previously they'd used the more common incremental rake method.
Collecting rake incrementally refers to raking pots by discrete units e.g. a cent for every 20 cents in the middle. The higher the stakes, the wider apart the increments. Take an example room - in this case FTP - the rake structure may look something like below.
When pot sizes fall in between increment sizes, no rake is taken on the fraction above the final increment point. The further apart the 'increments', the less you'll be raked as a player.
For example, you play a $5.90 pot on two different sites. Site A takes $0.01 per $0.20, for a rake of $0.29. The last $0.10 in the pot falls between two increments so it's unraked - players only pay rake on $5.80 of the pot.
Site B takes $0.05 per $1, for a rake of $0.25. The last 90 cents lies between two dollar increments and isn't raked - players are raked on just the first $5 in the pot.
As well as pot sizes being larger relative to rake caps, wider spaced increments are why higher stakes players pay fewer bb/100 in rake. Skill level of the competition aside, playing micros it is much harder to beat the rake.
As the name suggests, under a true percentage rake system instead of using increments 100% of the pot is raked at a set percentage (commonly 5%), down to the cent. There are no discrete units nor leftover unraked portions. Assuming 5% true percentage rake the $5.90 from the example above would be raked 29.5 cents, higher than any incremental method could ever reach.
The true percentage rake by pot size follows a straight line graph represented by the red bars in the chart above. Rake is being paid linearly regardless of pot size in contrast to the staggered, 'staircase' effect formed by the incremental method as shown in blue.
Every cent now being raked is terrible for the player, however PokerStars also lowered the rake percentage when switching to this method. No Limit and Pot Limit games are raked from 3.5 - 4.5% depending on the stakes, and Fixed Limit games can be raked as low as 1%.
Update - as of Jan 1, 2015 PokerStars' HU rake cap was increased to $1, and the 5+ player cap increased to $5 at midstakes.
Lowering the true rake percentage more than compensated for the effect of losing pot increments where zero rake is paid, and PokerStars still has the lowest rake levels in the industry.
Beware other rooms that may use this method but keep the percentage at 5%, advocating simplicity and 'transparency'. You will be paying much more rake under such a system.
In a similar vein beware rooms that use small increments even at higher stakes - in May 2013 Carbon Poker and the rest of the Merge network quietly raised the rake. They switched from $0.01 per $0.20 increments to $0.01 per $0.18, at every stake level.
Compare this to the previous rake table here. Using increments of just 18 cents even at mid and high stakes is effectively worse than 5% true percentage rake (closer to 5.56%). This is because a negligible fraction of a pot played at e.g. $2/$4 will fall outside the final $0.18 increment.
Rake caps were also raised, with the removal of the 50 cent heads up cap (vital to a HU players' winrate) and higher caps shorthanded. The table above applies to all stakes, except $3/$6 with the same $0.18 increments but the additional expense of a $5 cap 5+ handed.
These extreme rake hikes angered Merge regulars noticing the switch who protested on the forums that NLHE & PLO there are now near unbeatable in the current climate, even with rakeback. Limit Hold'em was unaffected (Merge uses PokerStars' exact rake structure for limit games).
For a U.S. facing network with more reasonable rake - other than on progressive bad beat jackpot tables - we can recommend Americas Cardroom on the Winning Network.
Americas Cardroom's increments (and caps) are much more favorable for the player at every level, becoming wider spaced at higher stakes (note that $0.05 per $5 is likely a typo on their webpage this image is taken from, that would be an incredibly profitable 1% rake).
A $19 pot on Merge playing $5/$10 would be raked $1.05, over 5.5% of the pot. The same pot on Winning would be raked just $0.25, under 1.5% of the pot, thanks to the wider increments.
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