How isn't online poker a pyramid scheme?

A pyramid scheme works by first paying into the system, then receive money from the system for each new member paid into the system.

online poker rooms make money by charging rake. However, with the following description, any gaming providers who provide raked peer-to-peer gambling on a skill-based game will eventually run out of money because of the following reason, similar to how a pyramid scheme bust.

1. People start joining the platform, play poker. The platform earns rake.
2. As poker is a game of skill, eventually good player will win. Some of them will then move up the stakes, while losing player will move down the stakes. The level for each stake will keep relatively constant as a result.
3. Because there is a rake, only players who can beat their peers at their stake can break even, so over a long time, the level of play for each stake will eventually increase. The highest stakes become unsustainable and only kept active by new players moving up from lower stakes.
4. Players in the lower stakes move up when they win money. However, there must be losers in the game. People will eventually quit poker if they are not skilled enough to win even at the lowest stake, so the lowest stake constantly requires a new influx of beginners to be active.
5. When the market saturates and no new players and money enter the system, people will eventually lose money to the rake, and quit playing poker. The platform goes bust.

How is the above description different from an illegal pyramid scheme?

Poker doesn't trick you into the belief that you will end up at the top.

Its pretty obvious that you have to learn and improve to make more money, anyone who has done any small level of re search undertsands how online poker wprks, whereas pyramid schemes trick you into believing that all you have to do is pay, and you will make much more money later.

I see your vaguely where you're coming from, but its not the same thing at all!

Because it isn't an illegal pyramid scheme.

Your thinking is flawed too as far as believing that players move up in stakes when they win... drop down when they lose. Who says they do this? I'm guessing for gambling recs. it's just the opposite.... Lose... >> move up to in hopes of winning to recover their losses.

No doubt that the sites do need to keep promoting the site in hopes of getting more depositing players (or... more players depositing, lol). This can be achieved through advertising, different promotions, deposit bonuses, etc.

In poker, the site must set aside funds to cover players balances. Not so in pyramid &/or ponzi scams.

Skill based game played for money, don't expect to win money in a competitive game where you are less skilled than your opponents.

You don't deserve to win, the poker client deserves to collect a fee for creating a product many many people consume. If you don't beat the game after rake get better, move down or quit.

Most people pay money to participate in the leisure activities they enjoy. Poker is the same thing except if you have skill you can make money from it.

If you're a losing player only play with money you can afford to lose. But the fact that people can make money from their hobby when many other hobbies just demand you spend money makes poker truly unique in my eyes and part of why I love it so much.


But if you play poker like it's the local lotto it's basically a ponzi scheme sure, but the money will cycle up to the players who have the best overall strategy and mental game working in unison not the people who have been paying into the system the longest or whose uncle got them a job at the firm.

I said it's a skill based game played for money right?

GL

EDS

miklcct said:

5. When the market saturates and no new players and money enter the system, people will eventually lose money to the rake, and quit playing poker. The platform goes bust.

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This is a flawed assumption, since there is no reason to expect, that the market will ever "saturate" and new players stop entering poker completely. Its like saying, that eventually all carmakers will go bankrupt, because their current customers will die and stop buying cars, and new generations growing up will never buy a car in their entire life. This could potentially happen, but realistically only if some radical new technology came along, that made cars obsolete.

In the same way its also possible, that fashion would completely change and nobody want to play poker any more. But it does not seem like the most likely outcome. On the countrary poker has found new markets in recent years in places like Asia. And even if poker was to go completely out of fashion, that would still not make it a ponzi scheeme. This would be the same as saying, that anolog cameraes were a ponzi scheeme, because people eventually stopped buying them and purchased digital cameras and smartphones instead.

miklcct said:

A pyramid scheme works by first paying into the system, then receive money from the system for each new member paid into the system.

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You're missing the fact that in poker you can start with zero investment, win quite substantial amounts and cash out. Show a pyramid scheme where this is possible. Yes, some rooms these days started to make it harder by having C$ or T$ or cash-out restrictions, but still. So your foundational premise is not fully correct.

Online poker rooms make money by charging rake. However, with the following description, any gaming providers who provide raked peer-to-peer gambling on a skill-based game will eventually run out of money because of the following reason, similar to how a pyramid scheme bust.

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Ideal situation for rooms is if no one wins and everyone stays around the break even point, shuffling chips around. This way the rooms make infinite profit off rake. While this is not realistic, the higher up the stakes you go, the more the level of the players evens out, making the situation closer to the described ideal scenario. Also, take into account that many pro players have downswings for months, years even. So they would play for 3-4 years at times just to break even (but they paid rake all through thousands of those games). That's re-distribution of money won off weaker players in the past.

When the market saturates and no new players and money enter the system, people will eventually lose money to the rake, and quit playing poker. The platform goes bust.

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Rooms realized the saturation problem long ago, and prioritize recreational players, that's why a lot of poker software has been banned and multitabling limited. This helps extending a new/recreational player lifecycle. And every few years there's a new generation coming of age that comes. Plus, some people are just gamblers, lose long-term and don't care. If losing money would make people quit, sportsbooks would be dead ages ago. Yet, they are as alive as ever. How are bookmakers legal would be a much better question hehe.

Also, explain, how the skill ladder that you describe is different from other skill-based games, for example, chess or tennis.

Poker Orifice said:

Because it isn't an illegal pyramid scheme.

Your thinking is flawed too as far as believing that players move up in stakes when they win... drop down when they lose. Who says they do this? I'm guessing for gambling recs. it's just the opposite.... Lose... >> move up to in hopes of winning to recover their losses.

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Yes, that too. I knew such people myself. They may even hit a good run on NL200 and cash out. Then lose it back. Deposit again. Full circle.

Poker is just a fun hobby, even if you don't have the talent to make money. If you do, go for it. Some compulsive gamblers will lose big. At least poker is honest about the risk involved.Professional poker is a pyramid scheme. A pyramid scheme is a business model that doesn't generate real income; it only takes money from the majority of participants and gives it to a lucky few.

dreamer13 said:

Poker is just a fun hobby, even if you don't have the talent to make money. If you do, go for it. Some compulsive gamblers will lose big. At least poker is honest about the risk involved.Professional poker is a pyramid scheme. A pyramid scheme is a business model that doesn't generate real income; it only takes money from the majority of participants and gives it to a lucky few.

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First you say poker is just a fun hobby and then you continue on saying professional poker is a pyramid scheme? 🤔
Make up your mind...

And I also suggest googling what exactly a pyramid scheme is. Poker is none of the sorts

I will go one better... How isn't the dollar a pyramid scheme ?

That's nonsense... because rake isn't the player's primary source of income, not a big bonus. The main source of income is playing against weak players. If you go all-in with AA against an 8-touch player, you'll make 80% over the long term, just stick to your bankroll. It has nothing to do with pyramid schemes...