Would dropping the rake in £1k+ events influence numbers?

[pokerplayingfarmer]

Fwiw I think £100+20 for the ukipt mini is ridiculous.  Regardless of what the standard juice is anywhere else in the world, 20% is taking the piss imo.  Big Guarentee or not.

[EvilPie]

Fwiw I think £100+20 for the ukipt mini is ridiculous.  Regardless of what the standard juice is anywhere else in the world, 20% is taking the piss imo.  Big Guarentee or not.

Judging by the turnout it appears the general public may well agree.

[scotty77]

The Grosvenor Student thing will have had a pretty big impact, as well as GPS Newcastle plus being in the middle of the UKPC Mini and the Grand Prix Million.

Can't see many people turning down the prize pool on offer plus the professionalism of the event/DTD based on the increase in rake....some of course but not many.

[SuuPRlim]

to say people dont care about the rake is certainly incorrect, to say it's peoples primary motivation for where and what to play would be also, imo.

[Killergibbo]

i like the idea of 10% taken from the prize pool to cover costs etc so making the ukipt just £1000 to enter....yes those that cash get a little less mainly impacting first place finish....

[arbboy]

Fwiw I think £100+20 for the ukipt mini is ridiculous.  Regardless of what the standard juice is anywhere else in the world, 20% is taking the piss imo.  Big Guarentee or not.

I think the thing with comps like this is to a big % of players it is a multiple bullet event which they treat like a £200 or £300 or maybe £500 event over the long term so they are playing it as a £200+£40 or £300+£60 which is when the 20% rake really does start looking insane.  I understand all the gtd issues etc and the risk/reward profile the casino is taking putting on with huge gtd's.  The reality is though the casinos are not seeing this additional rake.  It is directly going to the government.

I think what the increases in rake does show with the 50% of rake going to the government in tax that poker players are effectively taxed at source via the rake box whether they win or lose on playing an event.  Over a year a decent live grinder will pay a huge amount of tax to the government yet constantly be told they don't pay any tax on their income.  The £100+£20 events are effectively £100+£10 like the old days with the extra £10 going straight to the government.  

At £100 mtt level it isn't such a big deal.  However when £1k events are now minimum £100 rake when they were £50 6 years ago (capped at £15 10/20 years ago whatever the buy in) it just shows the amounts of money the government are forcing casinos to charge now to cover their costs yet the casinos are made to be the bad guys with customers.

Stars charge 10% then 3% on top for the dealers then ask for tips after.  Plenty of firms doing £1k buy ins at £900 + £100 (11.1% rake).  All trying different ways to squeeze more out of the punter in order to pay their increased tax bills to the government.  

As the standard of play gets higher and higher and the edges in games get smaller and smaller as the cost of playing (rake) increases to the customer (even though the actual rake retained by the casino after tax stays the same or actually falls) it would be total folly to think a decent % of rational business like customers don't reassess their poker investments over a year and reduce their expenditure.  

[EvilPie]

Where do you get your tax facts from? If it's an accountant I think you should look for a new one.

I get my tax facts from https://www.gov.uk/government/publications/excise-notice-453-gaming-duty/excise-notice-453-gaming-duty

I find it's the best place if you want to make public statements that may get checked out by other people.

The gambling tax isn't 50% on everything, it's up to 50% depending on gross gaming yield in a 6 month period and it's also tiered.

Up to £2.3M is 15%
The next £1.6M is 20%
The next £2.8M is 30%
The next £5.9M is 40%
The remainder is 50%

From the HMRC website:

The ‘gross gaming yield’ consists of:
•the total value of the stakes, minus players winnings, on games in which the house is the banker, and
•any charges made in connection with dutiable gaming, including charges made for participation in equal chance games such as poker

I'm no accountant but the statement above suggests that the tax is on the profit the casino makes from it's gaming tables and also the rake from poker tournaments.

Now I obviously don't know DTD's figures but I'm pretty sure they'd be chuffed to bits if they were yielding enough to be paying that 50%

[arbboy]

You are probably correct regarding DTD as it is a stand alone operation but any mtt played in any main chain casino (Grovs/Genting etc) in the UK where their gaming profits will be easily the top limit for tax reasons your rake will be charged at 50% by the government for tax.  Channing tweeted/wrote in his bluff column ages ago when the tax change came in that the Vic raked around £5m a year and the government were taking half of that straight off the bat and it was getting to the point where the Vic were considering whether the floor space used by the cardroom made it economically viable to keep the cardroom going as they only kept £2.5m before any of their actual business costs were covered.

[claypole]

Fwiw I think £100+20 for the ukipt mini is ridiculous.  Regardless of what the standard juice is anywhere else in the world, 20% is taking the piss imo.  Big Guarentee or not.

It's not though really is it.  It's unique to poker where the ABI has not moved in line with inflation over the past 20 years.  DTD have significant costs - as do other "card rooms" - and the ABI of comps ran has not kept pace with inflation - so it can't run at a static 10% unless something changes in the business model economics. £10 in 1995 when i started playing is worth £20 now.  The smaller comps always make less margin that the higher buy in ones and it just isn't sustainable without support from cash games, casino. 

I think poker players generally love a moan and are quite self centred with their views and see it as a one way street.  Course I'd rather pay as little rake as possible and get maximum value however we all need to be realistic.

[EvilPie]

So Channing is your tax advisor? Must be true then if he tweeted it.

Why would you apportion the entire 50% band to your poker profits? Surely as a business you'd treat it as a percentage of your total profit and therefore part of that £5M would be taxed in the lower bands?

If they don't then all it's doing is moving another part of the casinos profits back in to a lower band.

What The Vic are really getting at is that poker is nowhere near as profitable as the rest of their business so they'd prefer to use the space for roulette or blackjack. They use the tax angle to garner a bit of sympathy for when the inevitable happens and they get rid of poker and replace it with blackjack and roulette. They'll still be paying the same tax on those tables but it'll be on a bigger profit so they're happy.

Have a quick look at this: http://www.rank.com/our_industry/taxation.jsp

The only reason they can say poker profits are taxed at 50% is because of the £12.2M+ profit (in a 6 month period) that they're making anyway!!!

If they made less profit on everything else they'd pay less tax on the poker tables so don't blame the government for this one.

[arbboy]

So Channing is your tax advisor? Must be true then if he tweeted it.

Why would you apportion the entire 50% band to your poker profits? Surely as a business you'd treat it as a percentage of your total profit and therefore part of that £5M would be taxed in the lower bands?

If they don't then all it's doing is moving another part of the casinos profits back in to a lower band.

What The Vic are really getting at is that poker is nowhere near as profitable as the rest of their business so they'd prefer to use the space for roulette or blackjack. They use the tax angle to garner a bit of sympathy for when the inevitable happens and they get rid of poker and replace it with blackjack and roulette. They'll still be paying the same tax on those tables but it'll be on a bigger profit so they're happy.

Have a quick look at this: http://www.rank.com/our_industry/taxation.jsp

The only reason they can say poker profits are taxed at 50% is because of the £12.2M+ profit (in a 6 month period) that they're making anyway!!!

If they made less profit on everything else they'd pay less tax on the poker tables so don't blame the government for this one.

The original question asked if dropping the rake in big buy in live mtt's would increase numbers attending.  We are getting away from the original question here.  The bottom line is the government's taxation policy has forced the vast majority of operators to increase their rake charged on these events in order to make as much money before on these events.  GUKPT's started at £1000+50 and have steady risen year on year in the past 8 years for example.  It is pretty hard to not see part of the reason for this is the government's taxation policy.  It might not be the only reason but it certainly plays a part.  To not partly blame the Government for this would be wrong imo.

Any product in the world is subject to different levels of price elasticity.  Many would argue poker rake on big buy in mtts is relatively price inelastic but there will be a certain fall in demand when the cost of the product increases to the price sensitive customer which there are a decent chunk of i would imagine at this type of buy in level.  Therefore to answer the question dropping the rake would increase numbers.  To what level is open to debate.  Several people have stated openly on here they refuse to play poker stars 10% + 3% dealers 'rake' comps so it does make a difference to demand for these products.

[relaedgc]

So Channing is your tax advisor? Must be true then if he tweeted it.

Why would you apportion the entire 50% band to your poker profits? Surely as a business you'd treat it as a percentage of your total profit and therefore part of that £5M would be taxed in the lower bands?

If they don't then all it's doing is moving another part of the casinos profits back in to a lower band.

What The Vic are really getting at is that poker is nowhere near as profitable as the rest of their business so they'd prefer to use the space for roulette or blackjack. They use the tax angle to garner a bit of sympathy for when the inevitable happens and they get rid of poker and replace it with blackjack and roulette. They'll still be paying the same tax on those tables but it'll be on a bigger profit so they're happy.

Have a quick look at this: http://www.rank.com/our_industry/taxation.jsp

The only reason they can say poker profits are taxed at 50% is because of the £12.2M+ profit (in a 6 month period) that they're making anyway!!!

If they made less profit on everything else they'd pay less tax on the poker tables so don't blame the government for this one.

It's not a tax on profit. Gaming duty on roulette is calculated differently to poker.

It's a tax on revenue. Any session charge, rake etc is taxed up to a maximum of 50%.

When you consider the other costs involved in poker (it's very staff intensive given the limited scope for revenue generation) it makes it a difficult business model.

I've edited to add this:

Roulette Table #1

Drop/Handle: £500,000
Player Wins: £100,000
Taxable Gross: £400,000

Poker Room #1

100 x £10 charge £1,000
Rake revenue of £2,000
Taxable Gross: £3,000

One is profit. Poker is all revenue generated.

It's a significant difference.

[david3103]

So Channing is your tax advisor? Must be true then if he tweeted it.

Why would you apportion the entire 50% band to your poker profits? Surely as a business you'd treat it as a percentage of your total profit and therefore part of that £5M would be taxed in the lower bands?

If they don't then all it's doing is moving another part of the casinos profits back in to a lower band.

What The Vic are really getting at is that poker is nowhere near as profitable as the rest of their business so they'd prefer to use the space for roulette or blackjack. They use the tax angle to garner a bit of sympathy for when the inevitable happens and they get rid of poker and replace it with blackjack and roulette. They'll still be paying the same tax on those tables but it'll be on a bigger profit so they're happy.

Have a quick look at this: http://www.rank.com/our_industry/taxation.jsp

The only reason they can say poker profits are taxed at 50% is because of the £12.2M+ profit (in a 6 month period) that they're making anyway!!!

If they made less profit on everything else they'd pay less tax on the poker tables so don't blame the government for this one.

It's not a tax on profit. Gaming duty on roulette is calculated differently to poker.

It's a tax on revenue. Any session charge, rake etc is taxed up to a maximum of 50%.

When you consider the other costs involved in poker (it's very staff intensive given the limited scope for revenue generation) it makes it a difficult business model.

I've edited to add this:

Roulette Table #1

Drop/Handle: £500,000
Player Wins: £100,000
Taxable Gross: £400,000

Poker Room #1

100 x £10 charge £1,000
Rake revenue of £2,000
Taxable Gross: £3,000

One is profit. Poker is all revenue generated.

It's a significant difference.

That roulette table is rigged.