Poker in Cambodia is in a bit of a state of flux. While the city of Phnom Penh is just coming off a successful running of the World Poker Tour at the Nagaworld Casino, there are indications in the overall scheme of things that poker is regressing in the country as a whole. There are many reasons this may be occurring and an entire anthology can be written to discuss them all. In this article I will cover the issue of rake and how its deployment is contributing to the current direction of the game in Cambodia. This issue is discussed first as it concerns money, that which the poker room generates and also that which is taken from the players that take up the seats in any game. As with most things in business a balance needs to be reached in consideration of all the parties involved. A skewing of this balance can adversely affect the growth of any profit driven endeavor and while certain parties may benefit in the short term, we can readily see in this country how it can negatively impact the overall growth of the game.
Rake is of course the small commission that the poker room takes from each pot, which represents the revenue for the room. This is what differentiates poker from other games in a casino, namely that the game is not played against the house and that it is supposedly beatable. In an environment such as Las Vegas rake has largely stabilized and is consistently similar throughout the town. Both $1-$2 and $2-$5 no limit hold’em games are charged a commission of 10%, capped at $5 while larger games are charged timed rake in which each player is charged a fixed amount every 30 minutes. In other words, players are rewarded for playing higher stakes. This makes a lot of sense in that games of higher stakes generate the most revenue for a poker room and also can add to the reputation and popularity of the room. In Cambodia and Asia at large, the opposite logic is employed in that players who play higher are punished with escalated rake caps. This can readily be seen in the Cambodian city of Sihanoukville where rake caps for games as low as $2-$5 reach near $100. But rake here in Cambodia is on the rise overall and this escalation has reached into the smallest games in the country. A $1-$1 game in Sihanoukville recently had a rake percentage of 7% with a cap of $10 and another such game here in Phnom Penh still employs a 10% rake with a $5 cap. The latter is the same rake charged for $1-$2 and $2-$5 games in Vegas and was never intended for smaller games. This is why $1-$1 games do not run in Sin City as they are very difficult to rake. Either they do not make enough revenue for the poker room or they have to be raked at a rate that makes the game unbeatable.
I have heard the argument that rake should be high in a poker game since only nits, regulars and pros concern themselves with how much is coming off the table with every hand. I suppose the logic is that if a particular room wants tables filled with only recreational players, that it does not matter how much rake is taken. This is essentially the thinking that is employed in the running of poker rooms in Sihanoukville where exorbitant rates are charged in games filled with Chinese who do not think about the commission taken. The only issue with this is of course that the room is punishing the most the very people that the room needs in order to survive. While winning regs will pay more rake throughout the course of their playing careers, losing players pay more when things are considered in smaller units of individual sessions and hands. Losing and recreational players are looser and thus play more hands, and thus in turn pay more rake. This is beneficial both for the winning regs and the room as the former have access to what is basically their food source and the latter make more money from a looser game filled at least partly with players increasing the revenue by playing more hands. But this whole process is like dance, one that requires great care and balance in order to achieve a sustainable poker ecosystem. Charge too much and the room destroys the very lifeblood of the room, the very players that it needs in order to survive long term. It is not difficult to figure out why not a single room in Sihanoukville has lasted over even one year since the influx of the Chinese began a few years ago.
Much of the erratic fluctuations and escalations in rake here can be attributed to the fact that the market and ecosystem for poker is still relatively young in Cambodia. Even environments like Vegas went through their own growing pains before becoming the stable economies they are now. I imagine that Cambodia may very well go through a similar process, but how long such a process takes is anyone’s guess as the attitude towards the game is quite different here in Asia. Referring back to Vegas, poker rooms are almost looked upon as what can be called a loss leader. What this means is that games like poker are undercharged by the casino because they expect that its presence will lead to the increase in revenue for more profitable services and games. So while poker may not generate that much money, the fact that people play in a casino’s room may mean that they also eat in their restaurants, play other casino games, go see a show or stay in their hotel rooms. This is why private and underground games throughout the world usually have the highest rakes, because they exist in a vacuum without any of these services. Most of the poker rooms in Cambodia also exist in this type of situation when you consider that even rooms inside of a casino are not really part of the larger entity but are rather run by outside groups that merely rent the tables. It is almost assured that in any environment where poker is depended on as the sole source of revenue, the rake will always be higher. The Nagaworld Casino in Phnom Penh comes the closest to the loss leader model in Cambodia. But even there the rake is not ideal and represents the general misunderstandings that casino operators in this region have towards the game of poker.
I have already referenced Las Vegas many times in this article. The reason for that is because Vegas is one of the most tightly regulated gambling markets in the world, one filled with consistent regulations and practices. This leads to another point in regards to the rake, namely the bonus drop. This is a practice that is being adopted by poker rooms here at an increased rate but one that presents many issues. A bonus drop is an extra rake that is taken in order to fund a promotion that a room is offering its players. For instance in Vegas they employ the aforementioned 10% capped $5 rake which means that they take $1 for every $10 in the pot, up to $5 for $50 in the pot. But rooms that employ a bonus drop will also take an additional $1 as soon as the pot reaches $10. They will not take any more above this level, but this amount is taken in order to fund promotions such as bad beat jackpots, high hands and freerolls. It is actually an ingenious method by which a room will throw a promotion to attract players, but actually have the players pay for it themselves. Many rooms in Vegas that have a bad beat jackpot have a sign that states the current amount of their prize. This number always increases by the day because the award is progressive, meaning that it grows as the room collects more money every day with that extra bonus drop. Whatever number is listed on that sign represents 100% of what that room has collected in the bonus drop for a given time. This is why whenever a poker room closes in Vegas, they have a bonanza of promotions as by law they are not allowed to keep any bonus money and have to give it all back in the form of some sort of promotion. In the 5+ years that I have lived in Cambodia I have seen many poker rooms that employed a bonus drop close up shop and I have only one question. Where is all that bonus money? This is in fact player money and so it has to be asked where the money that was collected from them went when a room closes. But a room does not even need to close for it to keep most, if not all, of the bonus money it collects. My friend recently played in a $2-$5 game where a total of $3 was taken for a bonus; $1 at a $20 pot, a second $1 at $40 and a third $1 at $60. They claimed to be giving this money back in the form of a high hand promotion. My friend hit such a hand on a pot that was between $20 and $30. He was told that he would not be paid out for his hand even though $1 was taken as a bonus drop and that all $3 would have to be taken. So if that’s the case, why even have the $1 and $2 levels and instead just drop $3 at some point? And if they are not paying him out, what happens to that $1 that was already taken as a bonus?
It is obvious that the poker ecosystem here in Cambodia still has a long way to go to become the type of environment in which poker is played in the West. It is my hope and estimation that it will, but how quickly how that happens depends on many factors. As players we have to remain aware of these types of issues and present casino and room operators with some form of resistance when certain tactics and methodologies are employed. When given a choice players should reward poker rooms that are completely transparent regarding their regulations and practices in these matters. And if the resistance of these rooms proves to be larger than that offered by players, perhaps then they need to stay away altogether. More than a few players have already expressed to me that this would be their final year in Cambodia, that they will not be returning in the future. Their reasons are varied but stem from the issues already covered in this article. It is my hope that the operators in this country evolve, progress and do everything in their power to ensure such an exodus does not happen en masse.
Life in the Third World
Just a collection of random and not so random thoughts from my daily life here in Cambodia.