PokerStars is trying out an 'Insurance' option

Hot on the heels of its 6+ Hold’em update, pokerstars is testing the merits of an innovative insurance feature that could help risk-averse cash game players.

Since this is offered only as Play Money on PokerStars at the moment, are you interested in checking it out?

PokerStars Protecting Casuals with All-In Cash Out Innovation

I am always fond of new innovations. But given, that this will amount to 1% extra rake, and the current run it twice is free, its a bit of a mixed bag for players. This is better than run it twice though, since it completely nuke out variance, and you are not dependent on your opponents choise. So maybe its worth that 1%. In theory reducing variance allow for more aggressive bankroll management.

PokerStars All-In Cash Out in Action
To demonstrate how the new feature works, here’s an example hand:
$1/$2 cash game table
Hands:

• Player A = AA (91.10 percent equity)
• Player B = AJ (7.67 percent equity)
• Tie = 1.22 percent equity

Action:

• Player A moves all-in for $100 from seat 1
• Player B calls $100 from the big blind
• All other players fold
• Pot = $201 ($100 all-in + $98 call from big blind + $1 small blind)
• Before the flop is dealt, Player A feels as though bad luck will strike and takes the All-In Cash Out insurance.
• Player B decides to let it ride.
• Player A receives $183.11 (91.1 percent of $201) minus 1 percent $1.83 ($183.11 X 0.01) = $181.28.
• Player B still has the chance to win $202 but they miss the board.
• Player A wins the hand and collects $181.28. The proceeds of the pot go the house.

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So what if player B wins the hand?

Does it mean that pokerstars is paying for badbeats?

Interesting......

I see this getting real ugly at some point, and becoming an exploited service.
Also, with the example, PS would get roughly 9% of the total pot.
( figure 5% rake, 1% insurance processing, the rest ??? )
Player A received only roughly 91% of the pot, PS banked the rest.

And this is to generate more Action, so who is getting the better of this??

percentage win

its a winner for pokerstars

just an ordinary insurance policy provided by pokerstars. same mathematics behind it.

but yeah players may start speculating in combies of bad hands plus insurance afterall it pure mathematics, and if you just look overall likelyhoods you can pimp those bad hands 7-2 offsuit 10-3 off suit.

will definitely change gameplay if you sit at table with people having the option to choose all in insurance

I will check this out , I am curious , untill then I can't say whether it's good or not . I 've read the opinions above ,criticisizing the extra rake mostly , interesting ..........

Like most businesses, when there is a change or incentive or a new idea, the business will usually try to make money somewhere. It's about generating more profits.

It's something shiny and new and people will at least try it, right?!

Cajin007 said:

Also, with the example, PS would get roughly 9% of the total pot.

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Thats the whole point of insurance. If the non-insuring player had won the pot, PokerStars would have had to pay out 191%.

Will this make the all in every hand players switch to cash games? Theres a few in every tournament Ive plahed lately.

Shells said:

Like most businesses, when there is a change or incentive or a new idea, the business will usually try to make money somewhere. It's about generating more profits.

Click to expand...

Sure and since players can just choose to say "no thanks", they are hardly ripping anyone off. They are taking away the current "run it twice" option, which is free, but other sites dont have that either.

I just finished a short session, where I lost 3,5 buyins. One of the losing hands was an all in preflop situation, where I had AK and the Villain AQs. He made a flush on the river. Had I been able to insure that hand, it would have cut my session losses in half. So if you are not deeply rolled, and/or tend to tilt after losing, then insurance can be a fine option.

HaroldHouse said:

Will this make the all in every hand players switch to cash games? Theres a few in every tournament Ive plahed lately.

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Probably not since these guys are actively looking for the luck. So why would they pay to avoid it. They are gamblers, and they are giggling about it, when their JTo beat AK on the river.

fundiver199 said:

Probably not since these guys are actively looking for the luck. So why would they pay to avoid it. They are gamblers, and they are giggling about it, when their JTo beat AK on the river.

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Wishful thinking to get them out of my tournaments. LOL! Seems like I cant beat them no matter how patient I am or what hand comes along.

fundiver199 said:

Thats the whole point of insurance. If the non-insuring player had won the pot, PokerStars would have had to pay out 191%.

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Given how many times the example plays out, versus the times the insurance has to actually cover the cost of the higher equity hand, and I am quite sure PS is generating pure Alpha.

I'm also aware that a scenario exist where players could work this insurance and PS would/could be the loser.

As they said, this is to help generate action, and have money pumping faster within the system. With the above possibility of the afore mentioned abuse of the option, won't you possibly consider that PS has secured insurance that the abuse,( if ever used ) would be minimal?
And if so, how is that implimented? And how will it effect players?

Sounds good, but I don't care what they are going to do. I will no longer play cash in this room. They constantly give me a cooler, given the lack of rakeback, I don’t see the point of playing in this room, it's just a waste of money. A few years ago, the dispersion problem was solved with the help of rakeback, now it’s just a loss of money.

Tenek26 said:

They constantly give me a cooler.

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Are you saying, that the RNG of PokerStars is rigged? You might want to collect just a little bit of evidence, before you start making public claims like that against a multi million dollar company. That being said its certainly worth giving other sites a chance in the search for better reward programs and/or softer games. I am currently playing mostly at 888 for that exact reason.

Pokerstars every update kills Poker

fundiver199 said:

Are you saying, that the RNG of PokerStars is rigged?

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Personally, I would've thought offering insurance is evidence (not sure how strong) that PokerStars believes their RNG is not systematically biased.

e.g, If their RNG coding was really something like "if Player A would have a cooler, increase Player B's odds by 20%", then Player A should always take the insurance.

GG Poker has had insurance on its real money cash games for a while. I like the option although I dont always take it.

I could use some tournament insurance but I dont think its gonna happen.

Insurance on poker stars ? I don´t think that will go on.
People need to know how to play and how much they can bet. Insurance you do with your Car, House or life. Not on poker site.
I´m a low level money player on Poker Stars. I can control my money well, more recreational and training for live tables bigger games. If the person know how to control no need any insurance.

HobokenNJ said:

Personally, I would've thought offering insurance is evidence (not sure how strong) that PokerStars believes their RNG is not systematically biased.

e.g, If their RNG coding was really something like "if Player A would have a cooler, increase Player B's odds by 20%", then Player A should always take the insurance.

Click to expand...

Offering insurance actually give the poker site a direct incentive to rig the RNG in their own favour, just like they already have with casino games. However the most common trackers automatically calculate all in adjusted EV. So if that number depart from actual EV in a statistically meaningfull way, any player using these programs would easily notice it. Its not something, you even have to run filters to look for. So It would only be a matter of time, before the whole thing exploded in a huge scandal, and the site went out of business.

I think thats a bit off.....

fundiver199 said:

Offering insurance actually give the poker site a direct incentive to rig the RNG in their own favour, just like they already have with casino games. However the most common trackers automatically calculate all in adjusted EV. So if that number depart from actual EV in a statistically meaningfull way, any player using these programs would easily notice it. Its not something, you even have to run filters to look for. So It would only be a matter of time, before the whole thing exploded in a huge scandal, and the site went out of business.

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I do think that your misinterpreting All-in Adj. Ev
The insurance uses Equity, so in essence with the fee, taking insurance and winning is a slighly neg Ev prop.

Yes that is true. So if they were going to rig it, it would be against the uninsured player. In the AA vs AK example, the AA player took out his share of the pot, and the AK player is now playing against the house. The house therefore has an incentive to not let the AK player get lucky and win the pot as often, as he should.

In the example the Insurer won and was paid only the Insurance claim, PS banked the rest.
Would this also occur in this example?
The question is this:

In the AKs vs AA scenario, AKs takes insurance, AA lets it ride.

For this I'll guess AKs has 10% equity, and AA has 90%.
Both players have roughly $400 in chips.

Board runs Kd 3s Js 10d Kc

Player AKs took the insurance ( at 10% ) and won.
( if he lost he's paid $72 chips, 10% final pot - 1%IHF )[ IHF = Insurance Handling Fee]

Scenario A: AK gets $792 chips ( -1% fee ) and it's all good. { Ok, insurance would become a hedge bet, that works for me }

Scenario B: AK gets $72 chips ( 10% Eq - 1%INSF) and the rest is taken by PS. { Not Good At All, WTF? }

If scenario B is the case, it would insure that no one takes the insurance, because Player AK would get screwed royally.
( this is based on the fact that Hand Equity for insurance is calculated once all betting action is concluded, and hands revealed. )
( if it's different please advise! )

If anyone knows exactly what happens in any situation how the insurance handles events, it would be sweet if they would post it for everyone to evaluate.

In your example the AK player has 10% equity, which amount to 80 chips. 1% of that is 0,8 chips, so if he take insurance, he will collect 79,2 chips from pot every single time rather than collecting 800 chips one in ten times. This hardly makes sense, because he still have a net loss of 320,8 chips, even when he insure, and 79,2 chips is insignificant to his bankroll.

I would probably also not insure that example hand with AA vs. AJ, because its such a small risk, that AJ win. So why not just save that insurance premium and let it roll. The hands, you might consider insuring, are those, where you have more than 50% equity in the pot, but still a significant risk of losing. Like AK against AQ, QQ against AK etc.