Does poker room's profit depend on player's skill?

So, can you help me to find a book or an article(academic style) where I can find some information about the connection between players skill and casino's revenue in poker.

Briefly what I expect: I know that some poker rooms teach their players(especially beginers) some basic skills of poker, that helps them not to lose all the money at once. Than players can improve their theoretical knowledge in according with their new level of skill. And so on. So, I suppose that there is some optimal average level of skill, which brings the maximum profit for poker rooms. This is the question I'm interested in.

May be authors or scientist in this field, who can advice me some articles.

Thanks!

I think most poker players enjoy a room with out of town fish even if there are also local grinders there as well.

Don't casinos try for a mixture between those sitting around for tournaments and cash games, a mixture between games and giveaways, ... and happy poker room dealers.

"I think most poker players enjoy a room with out of town fish even if there are also local grinders there as well."
I know many players who find "fish players"(players with bad skill) to take all thier money immediately or in a very short period of time. And so, the number of games decrease and the sum of rake also decreases. But if the bigginers(of fish players) take some courses which can improve their skill they would be able to play more rounds and so the sum of rake increses.
And the question is: Is there any optimal points of the average level of skill after which there is no sence to teach players, because the profit of poker rooms wouldn't increase more or may be would decrease slitly?

Yes, casinos try to mixture players according to their level(rank...), but not all the casinos do it.

I bet limit games in rooms with novice players are the most profitable for the house. Everyone chases everything and the rake is always maxed out.

The room needs the most tables running with the most players at the tables to maximize the chances of maxing the rake each hand. Of course there are many factors involved in drawing players to the tables, many have been mentioned already: room's reputation (management and quality/variety of games offered), dealer quality, drink service quality, comp value, etc.

Personally I am no fan of bad beat jackpots and the like, I'd prefer that extra dollar or 2 stay in the pot. However I seem to be in the minority since nearly every room has some sort of player funded bonus to attract players.

When I'm in Vegas I primarily play at Venetian.

I mean online poker! No dealer quality, drink service quality... etc.

As others have mentioned, it's a multitude of factors needed to increase the casino's total take. First and foremost, playing volume basically drives everything, so you have to run a room that keeps people happy and in the seats. So nice room, good dealers, good floor personnel, good promos, etc. will all do this. Also having a group of players that are enjoyable to play with. All these factors probably trump any poker related skill questions.

With regard to actual game factors, mainly I believe tables that are somewhat balanced in player strength will collect the most rake as long as there are a couple of weak players at the table that don't care about losing significantly. Also a room with more limit tables will collect slightly more rake if the rake structure matches NLHE. This is because it often takes longer to go broke in 4/8 limit if you bring a $200 buyin than in a $1/$2 NLHE game. Also 4/8 limit tables often get multiway and cap the rake more often than 1/2 NLHE in my experience.

Oh crap...well, ignore the first paragraph I wrote here.

The second paragraph is still valid. For online, volume and game choices are a big deal. Good software is helpful because it will help increase player volume. Promos are still helpful online, but probably less than in live poker. Also with heavy player volume, they are allowed to offer a wide variety of limits and this likely leads to the ideal table breakdown in terms of players' skill that will keep the players playing and help the site to consistently collect rake.

The most important thing to a casino, and this is for the main floor as well as the poker room, is AIC - Asses In Chairs.

The second factor, also important for both, is HPH - Hands Per Hour.

Educating a novice may help both of these elements.

Thanks!
May be somebody knows any books or journals(articles) which are specified on the subject of how all this factors(skill, HPH...) influence(or affect) casinos profit exactly. I mean game-theoretical models or some economics model.

Quote: Serdelman

Thanks!
May be somebody knows any books or journals(articles) which are specified on the subject of how all this factors(skill, HPH...) influence(or affect) casinos profit exactly. I mean game-theoretical models or some economics model.

To my knowledge, no. Data mining poker sites is difficult unless you're actually playing at the table. And places like PokerStars sure as hell aren't going to tell us how much they actually are raking in.

I think I am missing something here. What is the connection supposed to be between player skill and casino revenue for their POKER ROOM ??

I don't know of any poker room that plays against the players. Poker rooms charge a fee, a rake, for live games and tournaments to pay for the facility and dealers and do not take a cut out of the pots.

Even casinos with "house players" do not finance the house players except that they might pay them an hourly fee/stipend/rate to sit there. But whatever money the house player wins/losses is his.

I guess my earlier reply was a little vague. Let me be more clear:


There's not much correlation between the player's skill and the poker room revenue. But there is some.

If a player learns some basics so that they win more, they'll be more likely to return. That means more AIC - Asses In Chairs.

If they learn some basics to that they can make faster decisions, and less interruptions for decisions by floor people, that would mean more HPH - Hands Per Hour.

And these two things can snowball. The more players there are, the more likely a new player will sit down. The faster the game plays, the more likely players will stay longer.

So, yeah, there is a correlation. But it's not direct, and hard to quantify. So I doubt there would be any documents that you're looking for.

How I would see it: If skills on the table are unequal, the money flows from one to the other player untill it is fully absorbed. The house take rake, but only once.

If both players have equal skills, the money keeps shifting around back and forth. The house will take the rake each time.

I'm russian, so my English is bad.

MangoJ - YES!
That's what I want to model. BUT I can't find any researches in this theme. Also, I suppose that if we define the income function for house as a function of skill as \Pi(s), we obtain smth similar to a parabola whit negative coefficient( \Pi(s)= -a*s^2+...). What does it mean? It means that there is an optimal value of skill which maximize the house's income function.

May be it is a mistake to ask you such question, because you are a real players with real experience but not a theoretical guys.

Thaks everyone!
If somebody knows where to find some academic literature about this it would be great!)

If I would model something like this: forget about your parabola thing - this will tell you nothing. Finding the best players skill set for a given model is rather trivial. The real question is, what is the best (or at least good) model.

If you think fluctuations between bankrolls is most important, a very simple model could be: You have two players heads up with different bankrolls. Each round they bet a fixed amount on a two-way outcome (with even payout). Both players have different (but fixed) skills, i.e. one player wins more often than the other. The house rake would be a certain amount of the total bet. Then calculate the expected total rake until one (or both) players are broke, in dependence of the skill ratio and bankroll ratio.

In the end you would have an biased random walk (the bias is the skill difference) confined to an interval which gets smaller every step (the house rake). You would want to know the expected number of steps before hitting the interval borders (the total house income) for various bias and initial conditions.

Not finding "any research on this theme" is the best motivation to start doing it, isn't it ?

Just stopped in and saw this thread. Anybody have any idea what percentage of players generate 55% of the rake ?

Less than 5% 5-10% 10-20% 20-25%.

I was surprised at the answer from industry experts !

Aren't rakes capped? If so, the size of the pot and player skill have very little impact on the house's income. I think DJTB has it exactly right... It is a volume business.

Quote: Buzzard

Just stopped in and saw this thread. Anybody have any idea what percentage of players generate 55% of the rake ?

Less than 5% 5-10% 10-20% 20-25%.

I was surprised at the answer from industry experts !

This is why new fish are needed for a poker room to make a profit

MangoJ - thanks a lot!!!
MangoJ, if it is possible on this forum and it is not a problem for you, can you give me your e-mail adress?

Buzzard, it's only a model where the rake equals the percentage of the pot(where the percentage is a constant value), but the amounts of money of every pot are different, because the pots are diiferrent in every round of game.

Quote: Ayecarumba

Aren't rakes capped? If so, the size of the pot and player skill have very little impact on the house's income.

True, but the cap isn't always reached. Bally's in AC (and other casinos) have a $1/$3 game instead of a $1/$2 primarily so that the pots are slightly bigger, so that they will get bigger rakes or reach the rake maximum more often.

On the flip side, Bally's also has a $1/$1 game. It's $2 to call. Most people looking for a $1/$2 will easily go to the $1/$3 but not a $2/$5. The $1/$1 game is for real novices. And it has a lower maximum buy-in than the $1/$3. The $1/$1 doesn't his a max rake as often, but there are generally fewer $1/$1 tables available.

You definitely rake more long term when the skill gap is smaller. Increasing the amount of deposits churned into rake is important to online sites, but live rooms aren't really an ecosystem in that way.

Quote: Buzzard

Just stopped in and saw this thread. Anybody have any idea what percentage of players generate 55% of the rake ?

Less than 5% 5-10% 10-20% 20-25%.

I was surprised at the answer from industry experts !

Online or live? Online it's probably less than 5%. I used to generate about $20k of rake a year before rakeback before Black Friday.

The initial poster seems to be asking about an online poker room in a site wherein the only activity is online poker.
I initially was thinking about a Bricks and Mortar casino with a physical poker room.

I think game mix has a value here as well as average player skill.

He's talking about online poker rooms? Oh.

In that case, the software already maximizes the HPH. The road to profits still lies in AIC. I think the key to that is running a fair game, offering a lot of different games, and most important: Good reputation. You get that from good customer service, including simple and quick payouts.