How do casinos profit from poker?

Learn how online poker rooms and land-based casinos generate revenue from poker. Recognize the meanings of rake, fee, and vig.

Comparing poker to other casino games, one of the advantages of poker is that you can regularly win money without getting forced out! The casino doesn't care who wins or loses as long as there is a game going on, so they can take the rake because you are playing against other players instead of the house.

The casino simply makes money by planning and supervising cash games and poker tournaments, just like in parimutuel betting. The casino or online poker room only takes a small portion of the money wagered while players compete against one another.

THE CHARGES THAT CASINOS APPLY TO POKER GAMES

By charging a set sum of money to host the game, online casinos profit from poker. This is known as the "rake," and depending on the poker game you're playing, the rake can be understood in a variety of ways.

Pot Rake

For low-stakes cash games, one of the most popular ways a casino will take the rake in poker is the "pot rake." When the hand is over and a flop is visible, a portion of each pot is taken in this scenario. The pot rake is typically capped at a specific financial amount, or "rake cap."

If you raise a hand preflop and everyone folds, the pot won't be raked because the rake is only taken after the hand reaches the flop (unless the casino is extremely greedy!).

The amount of the pot that is collected as rake varies in every casino, although it typically ranges from 5 to 10 percent. Since there are lower overhead expenses to pay for hosting the game, online poker sites will typically offer a slightly better rake, which is typically under 5 percent.

Hourly Rate

Instead of a "pot rake," they will charge each player in the higher limit cash games an hourly rate (or, in some circumstances, a half-hourly rate). "Time collection" or "table charge" are other names for this.

Since low denomination chips are needed to take the rake (usually a few dollars from the pot), which are not used in the game itself, this is used in higher limit games instead of the more traditional pot rake.

Then they calculate a price that covers the expense of running the table plus a little extra, and they take that from the players at a predetermined time limit, as opposed to covering the table with dozens of low denomination chips.

Fixed Fees

The pot rake that we previously discussed is a portion of each pot with a cap on how much can be taken (the rake cap). However, regardless of the size of the pot, some card rooms will impose a set cost per hand.

This is significantly worse for the players because it implies that the smaller pots are raked at an extraordinarily high percentage, and if they're tiny enough, winning them might even cost money!

Even if the percentage that is raked is relatively smaller than the tiny pots, pot-raked games typically have a cap that will be close to a set charge, so there isn't much of an advantage in the larger pots.

Although cash games have been covered thus far, how can casinos profit from poker tournaments?

Tournament Vig

The casino will receive a portion of the tournament buy-in as payment for hosting the event, and the remaining funds will go toward the prize pool. The amount that is taken will vary depending on the casino and the size of the tournament, but it typically ranges from 10% to 20% for smaller tournaments.

As running a tournament in a casino requires a lot of space, they must ensure they can cover the cost of the venue and the dealers in addition to turning a profit. For low-stakes events, this explains why they will charge such a large percentage.

HOW DO ONLINE POKER WEBSITES GET PAID?

Online poker rooms generate revenue using methods that are remarkably similar to those of traditional casinos. They charge a nominal portion of the winnings from a particular game. Online poker operators can charge a lower rake since it is less expensive to run each table.

Online Poker Rake

The pot rake in a traditional casino operates similarly to how the rake in online poker does. Every time a flop occurs in a cash game, a portion of the pot is taken. The rake of the pot that they take as the rake is smaller than that of a land-based casino because operating a virtual poker table is less expensive than operating a physical one.

Rake varies from 1 to 5 percent depending on the poker site and the stakes you play, and if you can get up to the nosebleed stakes, you'll essentially pay no rake at all!

Fees for Subscription

The conventional rake model is an alternative offered by some poker sites. Instead of giving a percentage of each pot wagered, players must subscribe to the website in order to play. As they have already paid their rake in full, this enables the players to win the entire pot.

Since the rake they have paid is the same regardless of how many hands they win, this benefits players who play a lot of hands, while tighter players are more at a disadvantage.

Time Drop

There is no time drop rake structure available on online poker sites. It's challenging to establish a fair approach to charging players without tying them to a time commitment because of the "come and go" aspect of online poker, where it's simple to sit down for two or three hands before leaving.

Also, there's no reason why every cash game can't be pot raked instead of time raked without the need for real chips, which is one reason why time drops are used in real casinos.

Tournament Fees

In both online and real-world poker tournaments, the rake is a percentage of the buy-in, and the rest of the money goes to the prize pool. Online tournaments are cheaper to run than they are in a casino, so the rake is typically lower—between 4 and 10 percent, depending on the site and stake level.

Similar to cash games, you pay less rake as a proportion of the total buy-in when you play at higher stakes, which can be an incentive if you've ever struggled to go up the stakes.

TAKE ADVANTAGE OF RAKEBACK

Rakeback is one of the key benefits of playing poker online. A player's ability to win or lose can depend on how high the rake can be at micro stakes.

Poker rakebacks are incentives provided by the majority of online poker sites that reward you for playing frequently by returning some of the money they've taken in as rake.

It's comparable to casino comps in that the more you play there, the better rewards you'll receive, which in turn encourages you to keep playing there.

Depending on their rakeback policies, different websites will provide varying amounts of it. Some websites give little to no rewards for playing on their platform since they don't care much about rakeback. Others value it highly and will give you anything from 20 to 65 percent of your rake back in cash.

One of the determining factors in where to play is the amount of rakeback that a site gives some players. Even though some websites, like Pokerstars, may have the best software, players are now choosing other websites, like Party Poker, which has a highly attractive rakeback offer.

Rake is a necessary evil in poker because it's how casinos and online poker rooms profit from the game. There must be raking and vig in poker for there to be venues to play! But that doesn't mean you have to be taken advantage of. Find out what works best for you by looking into the rake structures where you play.