I know that I am guilty of promoting online poker bad beat jackpots. I only post them when they become very large. At some point around $250,000-$300,000 it becomes +EV on Merge Gaming. At Boss Media it is probably closer to $500,000 due to their absurd rules. When they get that high they are worth chasing if you do not mind the variance. When they are building though they are among the worst things for online poker players.
Bad Beat Jackpot Extra Rake
When you play at a Bad Beat Jackpot table the hand has an extra $.50 in rake. This rake is taken at $5 in addition to the $.25 in rake that is already taken. This means the rake on a $5 pot is $.75. Of the $.50 bad beat jackpot rake only $.35 goes towards the current jackpot. Ten cents goes to the next jackpot and the house keeps 5 cents. This means that you are really only getting a 70% return on your bad beat jackpot money. You do not even get rakeback or bonus points from the other $.15.
In addition to the extra rake, money is taken out of the poker economy. When there is $350,000 in the bad beat jackpot there is actually $500,000 in extra rake that has been removed from the games. Considering the size of the online poker rooms that have bad beat jackpots that is a substantial sum. If you added up all of the money at the tables chasing the bad beat I would imagine it would be nowhere near the amount of the jackpot they are chasing.
When this money leaves the poker economy it is money that winning poker players do not get their hands on it. In addition to this, losing players will lose even faster. They will get less fun for their expendable poker money. If losing players cannot get the expected fun out of their leisure money they may stop playing.
Non Jackpot Tables at Jackpot Rooms
Of course players can choose to play at a non jackpot table. The problem is most recreational players do not even know the jackpot tables take extra rake. Even if they do understand they likely do not understand how devastating the extra rake is to their bankroll. This means that most of the action finds its way to the jackpot tables.
Bad Beat Jackpot Winnings
Eventually the bad beat jackpot hits. Then all of the money is divided among just a few players. Most of that money will exit the poker room and never be seen at an online poker table again. The poker room then takes 10% of the jackpot for basically doing nothing.
Online poker rooms that offer bad beat jackpots tend to change the dynamics of their poker rooms entirely. That is because the recreational players will play on those tables. This destroys the win rate of winning players. Many poker rooms want it that way though. I suggest playing only on online poker rooms that do not offer any of those type tables where extra rake is cleverly disguised as a bad beat jackpot.
After the Bad Beat Jackpot Hits
If you follow PokerScout you know traffic runs up at online poker rooms as the bad beat jackpot runs up. When the jackpot finally hits the traffic collapses and those players move to other online poker rooms or stop playing online poker altogether. Jackpots are not a promotion that help build player loyalty. They tend to draw people briefly when the jackpots are big but have the opposite effect when the jackpot is small. When the jackpots are large the games tend to be very poor in quality and at a slower speed. This is because so many players are playing as many tables as possible.
Affiliates and Bad Beat Jackpots
Affiliates get a raw deal too. Their players get raked harder by the bad beat jackpot rake in those games and bust sooner. This means players rake less per deposit so affiliates get paid less on players that play on those tables. Maybe there is a draw for a handful of players that will chase a jackpot but overall there is less play per dollar deposited. While there are a few affiliate promotions for the bad beat jackpots where the affiliate may get a share if their player wins the jackpot the likelihood of your player hitting the jackpot is extremely low. It is a high variance deal, just like for the player playing at the jackpot tables. In the long term, the amount you may win if your player hits a bad beat jackpot will not make up for the jackpot rake they pay that you do not get paid on.
Getting Paid for Bad Beat Jackpots
Cereus taught us that the money for bad beat jackpots is not always sitting around in a bank account waiting to be wired to bad beat jackpot winners. In fact, they have had a couple of jackpots hit since Black Friday. Those players have not been paid for their large jackpot wins. Can you think of anything that would make you feel worse than hitting a six figure bad beat jackpot and then not getting paid? If Full Tilt Poker can collapse like a house of cards and Betfair can go rogue then anything can happen.
Live Bad Beat Jackpots
I am more neutral towards live bad beat jackpots. While I prefer not to have them at least the jackpots are paid back 100%. In most casinos the poker room does not take a cut of the jackpot money like online poker rooms do. You also get paid right then when you hit it instead of having to sweat getting paid. It also adds to the social element of live poker. Whenever a board makes a jackpot hand possible everyone is on the edge of their seat. That is not the case online. In fact, I doubt multitablers are even paying attention to hands they are not involved in.
Bad beat jackpots are here to stay. Some players enjoy them so poker rooms give them what they want. If you enjoy bad beat jackpot tables that is great. You should at least know about the extra rake and potential problems that could come from playing at those tables.