Poker Rake – How Casinos Make Money From Poker Players

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Posted: January 19, 2024

Updated: January 19, 2024

In poker, the rake refers to the small percentage of the pot that the casino or poker room deducts as a fee for hosting the game. This fee is collected to cover operational costs and generate revenue for the establishment. Rakes are usually capped at a predetermined maximum amount, ensuring that the fee remains reasonable relative to the size of the pot.

One of the notable advantages of both land-based and online poker, especially when compared to other casino games, is the ability for you to consistently win money without the risk of being ejected. Since poker involves player-to-player competition rather than playing against the house, the casino remains indifferent to your wins or losses, as long as the game is in progress, enabling them to collect a poker rake. Similar to the concept of parimutuel betting, casinos generate revenue by organizing cash games and poker tournaments, with the establishment helping itself to a small percentage of the total wagers.

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How Poker Games Make Money From You

In the realm of online casinos, income is derived from poker through charging a fee for hosting the game, commonly referred to as the ‘rake.’ The actual method of collecting the poker rake varies depending on the type of game being played.

What Is The Pot Rake?

The “pot rake” stands out as the most commonly found approach employed by casinos, especially in low-stakes cash games. In this scenario, a percentage of each pot is extracted once the hand concludes or whenever a flop is revealed. Typically, the pot poker rake is subject to a predetermined dollar limit known as the “rake cap.” Notably, the rake is applicable only when the hand progresses to the flop, excluding instances where the casino’s policies are particularly avaricious. For instance, if your preflop hand results in all players folding, the pot remains unranked. Casinos usually set the rake percentage at approximately 5-10%, while online poker sites generally maintain a more competitive rate, often staying below 5% due to lower overhead costs associated with game hosting.

Poker Rake – Hourly Rate

In higher limit cash games, as an alternative to the “pot rake,” casinos will often implement an hourly (or occasionally half-hourly) rate for each player participating in the cash game. This practice is commonly known as a “table charge” or “time collection.”

poker rake
Picture Source: PickPik

The rationale behind opting for this method in higher limit games often found at high limit casinos, as opposed to the more common pot rake, lies in the impracticality of using low denomination chips for the rake (usually just a few dollars) taken from the pot. Since these low denomination chips are not actively involved in the ongoing game, avoiding the cluttering of the table with numerous low denomination chips becomes a priority. Instead, a predetermined poker rake is calculated to cover the operational expenses of running the table, along with a modest surplus, and this fee is collected from players within a set time limit.

Fixed Fees – Poker Rake

In contrast to the percentage-based pot rake discussed earlier, some card rooms adopt a fixed fee per hand, irrespective of the pot’s size. However, this approach is less favourable for you, as it results in smaller pots being subjected to an exceedingly high poker rake percentage. In extreme cases, if pots are really tiny, you might find yourself spending more money to win. The advantage in larger pots is limited, as although the raked percentage is relatively smaller than in small pots, pot rake games generally have a cap, which aligns with a fixed fee’s magnitude. Up to this point, our focus has been on cash games. Now, let’s explore how casinos generate revenue from poker tournaments.

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Tournament Vig

A portion of the tournament buy-in is allocated to the casino for hosting the event, while the remaining funds contribute to the prize pool. The specific percentage taken varies based on the casino and tournament size, with an average of 10% for most tournaments and potentially reaching as high as 20% for smaller ones. Given the considerable space and resources required to organise a casino tournament, the higher percentage for low-stakes tournaments is necessary to cover expenses, including venue costs and dealer fees, and ensure profitability.

How Do Online Poker Sites Make Money?

Online poker platforms like Bet365 Poker generate revenue in ways similar to traditional casinos, primarily by levying a small percentage of the total wagered amount in a game. However, owing to the reduced operational costs associated with each virtual table, you’ll find that all the best online gambling sites in the US will charge a lower poker rake.

Online Poker Rake

The online poker rake model closely mirrors the pot rake system in traditional brick-and-mortar casinos. You’ll discover that in cash games, a percentage of the pot is deducted whenever a flop is revealed. It’s a given that the virtual nature of online poker tables results in lower operational expenses.

poker rake
Picture Source: Pixahive

This in turn allows for a substantially reduced rake percentage when compared to physical casinos. Depending on the poker site and the stakes involved, rake percentages typically range from 1% – 5%. At higher stakes, you may even experience negligible or no rake charges.

Subscription Fees

Some poker platforms offer an alternative to the conventional rake structure through subscription fees. Instead of extracting a percentage from each pot, you’ll be required to pay a subscription to access the site. This upfront payment grants you the opportunity to claim 100% of the pot winnings, regardless of the number of hands played. This subscription-based model benefits frequent players, ensuring a consistent rake amount regardless of their hand outcomes, while more conservative players may find themselves at a comparative disadvantage.

Time Drop – Poker Rake

According on online gambling news in the US, the time drop rake structure is not implemented in online poker sites. This is mainly due to the fluid and transient nature of online poker gameplay, where players can easily join for a few hands and then depart. Charging players without confining them to a specific time commitment is going to pose a challenge in the online setting. Moreover, the absence of physical chips, a factor influencing time drops in brick-and-mortar casinos, eliminates the necessity for time-based charges. Consequently, most online cash games opt for a pot rake system rather than a time rake.

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Tournament Fees

In the realm of online poker, tournament fees follow the same similar pattern to their brick-and-mortar counterparts. A segment of the tournament buy-in is designated as the rake, while the remaining portion contributes to the prize pool. The online environment, being more cost-effective for running tournaments than physical casinos, results in lower rake percentages. Typically, these range between 4-10%, though the exact percentage depends on the site and the stakes involved. Similar to cash games, you’re able to engage in higher stakes tournaments and yet experience a lower rake percentage as an incentive to start climbing the stake levels.

Making The Most Of Poker Rake Opportunities

One of the top benefits of playing online poker at casino sites like Bet365 Poker, is the concept of rakeback. Given the potentially high rake at micro stakes, embracing rakeback can often determine whether you end up as a winning or losing player. Rakebacks in poker refer to promotional offers provided by most online poker platforms. Essentially, these reward regular play by returning a portion of the money they have collected through rake.

This system bears a close resemblance to traditional casino comps, where increased play at a casino results in better complimentary rewards. Various online poker sites adopt different approaches to rakeback, with some displaying indifference and offering minimal rewards. Others consider it crucial and extend cash rewards ranging from 20-65% of the player’s rake. For certain players, the extent of rakeback offered becomes a decisive factor in choosing where to play.

In the poker landscape, the poker rake is an important element, serving as a necessary mechanism for casinos and online platforms to generate revenue from the game. Acknowledging the role of poker raking and the vig is essential, as they sustain the existence of gaming venues. However, this acknowledgment doesn’t imply that you’re consenting to being overcharged. We suggest that you take the time to scrutinise the rake structures at your chosen playing venues and only opt for what aligns best with your preferences and bankroll.

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