Rake vs Profit (SNG)

#1 2nd April 2010, 6:12 AM

Will someone please explain how high rake will affect your profits in the long run?

To simplify things, we'll say $1 + .25 SNGs.

Thanks in advanced.

#2 2nd April 2010, 6:36 AM

I'm not sure if this is over-simplifying, but here it goes. Say we play 100 9-person STT's and we cash 1st, 2nd, 3rd fifteen times each. This results in $135 of winnings. If we pay $1.25x100 = $125 to enter those tournies, we're showing $10 profit, a 7.4% ROI. Now assume we only pay $0.10 rake for each STT. We pay $1.10x100 = $110 to play, and show $25 of profit, for a 22.7% ROI, more than three times better than when we were paying $0.25 in rake.

#3 2nd April 2010, 6:47 AM

Assuming heads up SnG's, if you want to break even playing $1.25's then you have to win 56% of the SnG's you play. If it was a $1.10, you'd only have to win 52%.

Or, if you like ROI, in order to obtain a 10% ROI in a $1.10, you'd need to win 55% of your SnG's. To obtain the same 10% ROI in a $1.25, you need to win 58% of your SnG's. And as you can see, there's only a 2%-3% win rate difference between breaking even and 10% ROI, so the rake does eat a ton of your profits, essentially turning a 10%+ ROI at regular SnG's into a break even ROI with the higher rake.

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