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While penny tables are seen as comparatively low risk - is this really the case?

Looking at my bankroll, there is a clear bell curve where I am less successful at lower and higher stakes but better at the medium stakes. OK, I know I'm not a high roller but why would I fare so badly on the penny tables?

Obviously people aren't worried about losing pennies so might play looser, but is there anything else that could explain this?

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  • Approximately how many hands are you talking about at each level?
    – Chris Farmer
    Feb 27, 2015 at 16:15
  • Micro-stakes have a higher variance than higher-stakes because of the pennies and the looser/fishier game in general. Because of the looser/high variance game you may get the feeling you can't win but after tens of thousand hands this doesn't matter and the better play will win as you chop variance and reap in people's looser behaviour. That doesn't happen so easily in medium-stakes.
    – user1165
    Feb 28, 2015 at 14:52

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At higher stakes the players are better. It is natural for everybody to have smaller relative win rates.

At penny tables the rake is relatively much higher compared to the blinds then in the middle limit games. Below is the rakes schedule for NLHE at poker stars. I stripped out the short handed rakes, just because they added to much clutter, and am just going with the max rake. I have left in the percentage that the rake is taken at. If you divide the blinds (BB+SB)\cap, you come up with a nice benchmark for how much one is paying in rake relative to the blinds. Were there is a range of limits I just used the upper limit for the calculation.

Stakes % Rake Cap Blinds/Cap

$0.01/$0.02 3.50% $0.30 10

$0.02/$0.05 4.15% $1.00 14.28

$0.05/$0.10 to $0.08/$0.16 4.50% $1.50 6.25

$0.10/$0.25 4.50% $2.00 5.7

$0.25/$0.50 4.50% $2.50 3.3

$0.50/$1 to $3/$6 4.50% $2.80 0.31

$5/$10 to $10/$20 4.50% $3.00 0.1

$25/$50 4.50% $3.00 0.04

$50/$100 4.50% $5.00 0.033

$100/$200 and above 4.50% $5.00 0.016

AS you can see from the numbers you are paying in the $0.02/$0.05 game the rake max is 14.5 times the blinds. The last penny game on the list is $0.25/$0.50 the rake is 3.3 times the blinds. As you proceed up in limits you will see that the rake becomes significantly less of a drag on the proper size bankroll for a game. Your win rate is a formula of how will you play in relation to the other players and the cost of the game in relation to the blind size. The blind size determines how much you and all the players are going to bet, and buy in for.

in the old days of limit play it was easy to figure out how much expert play in say a 10/20 limit game would net. The expectation on expert play was two big blinds an hour. With rakes like in the penny games, your overhead for rake would possibly have you loosing as much as 100+ big blinds an hour to the rake, leaving you a net of lots negative big blinds an hour to play penny games. However in NLHE this equation is not so solid, expert players dispatch bad player at a much higher rate. Just saying the extremes of what you can win or lose relative to the blinds are much higher in NL poker. However, in penny poker were you are paying 3 to 14 times the big blind each sizeable pot you win, it is not likely even an expert player will beat the grind. The reason you are not doing so well in penny poker is that the rake is destroying your win at a much higher relative rate then it is in middle and higher limit games.

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  • The percentage rake and capped rake is lower for microstakes games on the several sites I just looked at, so I don't think your rake argument is correct. I looked at PokerStars and a few other random sites and they had similar structures. Here's the PokerStars rake chart: pokerstars.com/poker/room/rake
    – Chris Farmer
    Feb 28, 2015 at 20:12
  • NLHE blind $0.01/$0.02 Rake % 3.50% Cap $0.30 Would be equal to paying a thirty dollar max rake in 1/2. Going up a little further in the scale blinds $0.25/$0.50 rake 4.50% %+ player max $2.50 is equal to paying a $25 rake in a 25/50 NLHE. These rakes that cap at five to ten times the big blind are not sustainable for a player and you are slowly going to be ground out. That's the point. Lots of drag on the bankroll in penny games.
    – Jon ♦
    Feb 28, 2015 at 22:29
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    Ok, that's true, but it's mitigated somewhat by the average pot size is always under a dollar at those limits. The really crappy rake is realized for the relatively uncommon large pots. I guess you'd have to know the frequency of pots that have more than some threshold of blinds to see exactly how bad that part of the rake really hits. You're right that it's worse than it initially seems though.
    – Chris Farmer
    Mar 1, 2015 at 22:32
  • @ChrisFarmer I think it gives the OP a plausible explanation why he is not doing as well in the penny games as he expects.
    – Jon ♦
    Mar 2, 2015 at 12:21
  • @ChrisFarmer one other thing that really ups the relative price in the penny games is that the real price of rake is almost always the posted price. In a larger game pot size gets beyond the rake often, so the real rake is actually much lower then posted, IE your paying much less then 0.016% in the 100/200 game because the average pot size is maybe something like $1000 making the real rake something like 0.005% of the action. Rake is a larger factor then most players would like to believe IMHO.
    – Jon ♦
    Mar 9, 2015 at 0:28

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