Pros and cons of rake based games?

What do you think are the pros and cons of a rake based game?

Some pros:
a) Lower development costs because you do not need math analysis.
b) The rake and charges are flexible for casinos and online operators, so not working to a fixed HE or variable pay tables.
c) No table design cost.
d) Use existing rake game based tables i.e poker, so no new installs.
e) Easier and quicker to get into different markets (US and international) because you do not have to trial/comply with various gaming commision legal procedures. Correct me if I am wrong here.
f) Other revenue streams e.g. TV licensing, championship and tournament sponsorship and player entry fees.

Some cons:
a) Harder to get a patent. Not sure about this, so any thoughts appreciated.
b) Lower profit for land based casinos compared to a carnival game.
c) Hard to establish a rake based game. Easier to do if it's based on/inspired by existing games though.
d) No existing business model to license/lease a rake game to casino operators, unlike a monthly lease for a carnival game. Well, I do not think there is a proprietry rake based game in casinos, but correct me if I am wrong.

Any thoughts appreciated.

I can't comment on the legal but here is what I see from a player prespective.

Lets take roulette since that would be the easiest game to get to a zero edege by simply removing the zero and changing the odds. Some players will see it and realize it is a better deal depending on the rake amount. Some will try to martingale the heck out of it for an edge. But some will hate it. They will refuse to see the zero edge and just see the "rake." IOW, they don't care about a bigger disadvantage as long as it is invisible.

From a casino prespective, I see a problem with taking the rake. Poker is easy to rake with all kinds of cheques flying in. At a table game you may bet $5 or even less. The only real way to "rake" here is to sell cheques at a premium for that table only. Say you sell $98 roulette chips for $100. Again, the APs will look for the best game while the everyday player will see themselves getting "less value" and migrate back to the dealer hell that is Big-6.

Quote: AZDuffman

Say you sell $98 roulette chips for $100.

A casino would probably make more money selling selling 125.00 worth of roulette chips for 100.00 and leaving the darn zero/zero-zero alone.

Can someone work out what would happen to the casino that did this?
Sharpie players who know math and roulette:
Ordinary players who make inside bets:

What about a casino promotion that sells 1,100 worth of roulette chips for 1,000 dollars. Assuming it takes a couple of weeks for a gambler to burn through that many chips, what would the casino make on the interest, the room and the buffets?

On-edit: Obviously, these would probably have to be non-redeemable chips that could be wagered but not cashed in. Sure someone could take the whole stack and win redeemable chips with them, but it would sure create some traffic at those now empty roulette tables.

Just to clarify.
In terms of rake based game I mean player verse player like the way Holdem operates within a casino. Not taking away the HE from a game and instead having a rake.

Sideshow Bob doesn't like rake based games.

I *think* some of your assumptions are wrong. I feel more strongly about the following assumptions.


>> a) Lower development costs because you do not need math analysis.
Maybe not the complex / comprehensive type of analysis for a carnival game, but you're still going to need a lot of documentation to convince a casino to dedicate a table and train dealers for the game.

>> e) Easier and quicker to get into different markets (US and international) because you do not have to trial/comply with various gaming commision legal procedures. Correct me if I am wrong here.
I can't believe that any game can be distributed and installed without first having a field trial and gaming approval. OK, maybe you can get a simple gaming approval for a field trial, but when you look to install in the second casino, they'll need to see the field trial results, and may require a more extensive gaming investigation.

>> f) Other revenue streams e.g. TV licensing, championship and tournament sponsorship and player entry fees.
That's WAY down the road. Before you can have a championship, you need experienced players.


>> a) Harder to get a patent. Not sure about this, so any thoughts appreciated.
You can patent ANYTHING, as long as it's unique.

>> d) No existing business model to license/lease a rake game to casino operators, unlike a monthly lease for a carnival game. Well, I do not think there is a proprietry rake based game in casinos, but correct me if I am wrong.
Check out 2-11 Poker. It a patent pending, proprietary game, getting a lot of play at The Bike.

Quote: DJTeddyBear

I *think* some of your assumptions are wrong. I feel more strongly about the following assumptions.


>> a) Lower development costs because you do not need math analysis.
Maybe not the complex / comprehensive type of analysis for a carnival game, but you're still going to need a lot of documentation to convince a casino to dedicate a table and train dealers for the game.

>> e) Easier and quicker to get into different markets (US and international) because you do not have to trial/comply with various gaming commision legal procedures. Correct me if I am wrong here.
I can't believe that any game can be distributed and installed without first having a field trial and gaming approval. OK, maybe you can get a simple gaming approval for a field trial, but when you look to install in the second casino, they'll need to see the field trial results, and may require a more extensive gaming investigation.

>> f) Other revenue streams e.g. TV licensing, championship and tournament sponsorship and player entry fees.
That's WAY down the road. Before you can have a championship, you need experienced players.


>> a) Harder to get a patent. Not sure about this, so any thoughts appreciated.
You can patent ANYTHING, as long as it's unique.

>> d) No existing business model to license/lease a rake game to casino operators, unlike a monthly lease for a carnival game. Well, I do not think there is a proprietry rake based game in casinos, but correct me if I am wrong.
Check out 2-11 Poker. It a patent pending, proprietary game, getting a lot of play at The Bike.

All valid points DJ, many thanks for your input.
I will check out the 2-11Poker game link, cheers.

>a) Lower development costs because you do not need math analysis.
Possibly lower but still substantial to get ANY casino manager off his duff and actually let some new game be trialed.

>b) The rake and charges are flexible for casinos and online operators, so not working to a fixed HE or variable pay tables.
The payouts are flexible on existing table games too.

>a) Harder to get a patent. Not sure about this, so any thoughts appreciated.
The real problem is enforcing a patent, not getting one.
>c) Hard to establish a rake based game. Easier to do if it's based on/inspired by existing games though.
Yeah, that first adventurous soul willing to try out the game is still the only player until some others show up and want to play.
>d) No existing business model to license/lease a rake game to casino operators, unlike a monthly lease for a carnival game.
Its worse than that. The casinos already know that there are substantial trends and fads in their poker room and therefore they know that any rake prediction is highly variable.

I think what you are trying to do is come up with a unique, patentable game that is zero house edge because the rake comes from the players and its simply that the casino is hosting the players and providing the table/chairs/dealers/etc.

Now someone mentioned roulette which of course is a house edge game with no rake but suggested that the equivalent of a rake could be imposed by selling 98 in chips for 100.00 and letting them play on a NoGreen wheel. Yes, that could be done but there would be tremendous resistance to it. You might want to look up the airport that tried to set their dollar change machines to give 95 cents to pay for the machines and the competing airport that set their change machines to give 1.05 for a 1.00. Which airport do you think got the most customers based on the publicity value alone?

It would be better to have a Normal House Edge roulette game and make the adjustment on the chip stack prices. No training of dealers, no new layout, no new Gaming Commission paperwork. So if you invented a NoGreen Roulette game wherein the players paid a rake to the casino, I think any casino would look at it ... and tell you goodbye.

Now online casinos might be different but I don't see why it would be substantial.

In my 14 years of doing math for game inventors the number of rake-based games I have seen make it onto the casino floor is zero. It is absolutely a horrible business plan. Every time an inventor comes to me with such a game I tell him that he would make a huge mistake to waste any money on it. Of course, they ignore my advice every time, but none have ever proven me wrong.

Quote: Wizard

In my 14 years of doing math for game inventors the number of rake-based games I have seen make it onto the casino floor is zero. It is absolutely a horrible business plan. Every time an inventor comes to me with such a game I tell him that he would make a huge mistake to waste any money on it. Of course, they ignore my advice every time, but none have ever proven me wrong.

I hear what you are saying and totally understand that the HE should be invisible within the game.

Was any of the rake based games you have seen a Player verse Player game?

Quote: alfie

Was any of the rake based games you have seen a Player verse Player game?

They all were. Usually they are meant for the poker room. The thinking of the inventor is, "At my home poker games my buddies love to play (insert name of game here) even more than Texas Hold 'Em. I'm sure the rest of the world would love it just as much. I'm going to go and put Texas Hold 'Em out of business."

Quote: Wizard

They all were. Usually they are meant for the poker room. The thinking of the inventor is, "At my home poker games my buddies love to play (insert name of game here) even more than Texas Hold 'Em. I'm sure the rest of the world would love it just as much. I'm going to go and put Texas Hold 'Em out of business."

And then this happens.

Quote: Wizard

... I'm going to go and put Texas Hold 'Em out of business.

Um... Is Hold 'Em "In business" ?

Quote: Wizard

They all were. Usually they are meant for the poker room. The thinking of the inventor is, "At my home poker games my buddies love to play (insert name of game here) even more than Texas Hold 'Em. I'm sure the rest of the world would love it just as much. I'm going to go and put Texas Hold 'Em out of business."

Wow, all of them. That is a sobering thought.

Hold 'Em is too easy to learn (hard to master I appreciate) for it to be rivalled.

The closest is tournament blackjack but even that doesnt have the appeal of Hold 'Em. Think about what they used to play before Hold 'Em made it big, draw and stud based games and then Hold 'Em grasped a foothold and rocketed.

Here in the UK, the poker rooms make little profit in the majority of casino (most actually make a loss once paying the wages) but keep them open for profit within bars and table games

There are really two kinds of what you're calling "rake-based" games. One is a traditional player-banked game, a game which would otherwise be a house-banked game but played with a rotating player bank (as in California) and where the casino takes a time, seat, or bank charge as a rake. Here, one player banks and takes on all other player action, and the banking player has the edge as determined by the math. The other is pot-based game like poker, badugi, or teen patti where the casino takes a rake from the pot. Here each player plays against all others and there is no house edge because there is no house.

No casino in a house-banked jurisdiction is going to offer a player-banked game on a regular basis[1]. The whole point of a house-banked casino in the first place is to fade the action, not just to rent tables. As for pot-based games, poker is one of the worst-performing games in any casino, both on a $/sq-ft basis and overall. The average poker table in NV earns $12k/month while the average blackjack table earns $29k/month -- and a BJ table is much smaller. Poker isn't exactly a loss-leader in Nevada, but it's not where the real money is made. That's on the real house-banked games where the house is involved in the action. I can't imagine a GM voluntarily deciding to put in less profitable games.

Look at it from the standpoint of a GM. If someone came to you with a new pot-based game, how much would it have to make in a month in order to justify training dealers on it? And given that requirement, what does the rake need to be? And given that rake requirement, will you convince any players to actually play the game?

It's a tall task. And as the Wizard has said, nobody's ever succeeded in bringing a new pot-based game to a casino and charging a license fee. Even changing poker gets a lot of people up in arms -- I heard some very unkind things said about Derek Webb's latest reversing-directions poker scheme (where the action moves in opposite directions after each betting round instead of always going clockwise). He has several installs, but those are all freebies. I've no idea whether it's really going to take off and make him money.

But the first clue should have been your list of pros and cons. The pros are all about how easy it would be to design and market the game. The cons are all about how little money the enterprise would make. If there's no money to be made, why bother?[2]



[1] There are traditional exceptions, like player banking in Pai Gow, but those are rare.
[2] This doesn't apply if you're not in the business to make money. But then you can skip the whole patent step altogether and just send ideas to your local casino/poker room.