New Rake Structure on MPN will ‘Feed the Poor, Tax the Rich’

Online poker is all about the money. The players want to win money, and the operators want to make money. But when the Microgaming Poker Network (MPN) announced its intention to alter the rake structure at the end of this month, taking what some might call a ‘feed the poor, tax the rich’ approach, they assured everyone it’s about improving the online poker network, not increasing profits.

MPN has undertaken an extensive crusade to eliminate what Microgaming’s Head of Poker Alex Scott calls “parasitic players”. In a recent blog post, Scott described them as players who “target the weakest opponents exclusively… to extract as much money from them as possible in as short a time as possible.”

Scott went on to call them “leeches who purchase datamined hands, who use seating scripts to sit with the weakest players exclusively, who stall on the bubble of tournaments. They skin the sheep once instead of shearing it many times.”

The online poker network has taken multiple active measures to thwart paratic players, and as Scott said, “These changes are working.”

New MPN Rake Structure

What do parasitic players have to do with rake structure, you ask? Perhaps more than you think. Parasites are one of the main reasons player retention is so low in today’s global online poker market. The proof is everywhere.

Even PokerStars, which has maintained the status of world’s largest online poker site for the last decade, has seen its average cash game traffic drop by about 17% in the last six months, falling from approximately 18,000 to just 15,000 players on a 7 day average.

Thus ridding the MPN of parasites is only one way to keep players returning to the virtual felt. Scott said, “There is another reason that player’s lifetimes are cut short, and it’s about time we addressed it. It’s rake.”

He explained that a player’s win rate can be directly impacted by rake, especially at the lowest stakes levels. “In micro stakes games, where players are winning pots of just a couple of Euro, the difference between a rake of €0.50 and a rake of €0.55 can have a major impact on player’s win rates and on the length of their lifetime,” said Scott.

Lowering the rake at micro-stakes will help increase players’ win rates, but it would also reduce the amount of money the MPN makes. That revenue must be compensated somewhere, resulting in an increased take at higher priced games, but Scott says the effects won’t be nearly so noticeable for high-stakes players.

“Conversely, at certain stakes, rake has almost no impact on win rates. When players are playing €100/€200 and winning pots of €20,000+, the difference between a rake of €2 and €3 is minimal compared to the amounts actually won and lost,” he said. “The current rake structure significantly favours higher stakes by charging a much lower rake, proportionally, to the players who play in those games.”

While Scott praised the fact that the MPN is poised to project possibly “the cheapest micro-stakes games of any major provider” in the online poker industry, he also wanted to assure everyone that the adjustment to the rake structure is “not a rake grab”. He clarified that, “If everybody played exactly the same as they did now, we’d expect to make the same amount of money, overall, from this new structure as we did from the old one.”

New Rake vs. Old Rake

Currently, the MPN rake structure is incredibly simple, charging a rake of 10% up to €0.10 at micro-stakes below €0.05/ €0.10, regardless of the number of players involved, and 5% at all stakes of €0.05/ €0.10 and above, capped at €1 for 2 players, €3 for 3+ players.

The online poker network’s new rake structure is much more sophisticated, based on the number of players, a wider range of stakes levels, and never exceeding 5%.