How Casinos Make Money on Poker Rooms

Their goal is to make money from each table, machine, and customer in the room. By ensuring there is a house edge in each game on the gaming floor
The casino has no vested interest in who wins or loses, and the dealer is only there to deal the cards and keep track of the game. So, what’s in it for the casino? How does a casino make money from poker and what makes organizing tournaments and keeping cash game tables going feasible for them?

The answer to this question is a small, four-letter word, which plays an important part in the overall poker economy. That word is RAKE, and we’re not talking about a garden tool used to pick up leaves that have been piling up in front of your house.

In poker, “rake” is a percentage of money that a casino keeps from almost every cash game pot or tournament entry fee, a bit like a tax.

Pot Rake

The "pot rake" is one of the most common ways a casino will take the rake in poker and is used for low-stakes cash games. This is where a percentage of each pot is taken after the hand is completed and whenever a flop is seen. The pot rake is usually capped at a certain dollar amount, which is called the rake cap.

The rake is only taken when the hand gets to the flop (unless the casino is very greedy!), so if you raise a hand preflop and everyone folds, the pot will not be raked.

Depending on the casino, you'll find that the percentage of the pot that's taken as rake will be somewhere between 5-10%. Online poker sites will usually be a bit better in terms of rake, mostly being under 5% as there are fewer overhead costs to cover for hosting the game.

Fixed Fees

Pot rake is not optimal for high-stakes poker, thus casinos added predetermined fees. Players may not be willing to spend 5 % to 10% of a $1,000 pot each time they win.

Fixed fees were introduced to solve this problem while still allowing casinos to earn a reasonable rake after each hand.

Rather than having their dealer compute the cost of each pot, which varies greatly, casinos will instead collect a specific amount after each round.

All that said, it makes the collecting more acceptable to high-stakes players while not affecting the casinos’ earnings.

Timed collection

A Timed collection can be described as a sophisticated type of rake, where the amount is fixed and collected by the casino from every player for a fixed amount of time spent on the poker table. For example, a casino can charge every single player $50 for an hour they play on the table. The player must pay this fixed amount irrespective of how many times they play or whether they are on the losing or the winning side. Simply put, timed collections are like playing on a poker table, just like the longer you stay, the more you need to pay. This type of poker rake is seen in several online casinos because it is easier to collect the money, and it is considered the best option for high stake players.

1/2 No-Limit Hold’em Rake

When you play 1/2 No-Limit Hold’em, you’ll notice a very common rake calculation that goes like this: 5% to 10% of the pot. Capped at $3 to $7. It’s the industry standard and will vary based on the casino where you’re playing. 10% is becoming more and more common these days, but since it’s no-limit hold’em, casinos rarely lose players. The percentage that casinos take from each pot doesn’t matter because the cap is what players usually pay every time they win a hand at no-limit hold’em. 

Online casinos implement these caps because it costs them less to run an online poker room. It’s also easier for them to entice new players to participate in their platform because no-limit is notorious for huge pots that blow the blinds out of proportion. 

Knowing the rake that casinos take is important in calculating your equity when going all-in or calculating if you have the odds to make the call. It’s the average that you pay per hour and will help you determine how profitable you are when playing poker. Poker pros who love playing at microstakes know what the rake is, even before they start playing. 

For example, a tight player who plays fewer hands will win less pots per hour. So the rake per hand that he needs to pay will be significantly higher than a player who plays more hands per hour. Tight players need to win considerably larger pots to make the same amount as someone who plays faster, small scale hands.

If you’re a tight player, you can reduce your equity rake by moving up the stakes ladder and play at 2/5 No-Limit. Although the rake will be considerably higher than 1/2 No-Limit, the pot you’ll get from winning higher stakes will let you make more per hour, even if you play slow and tight.

Tournament Fee

Taking a fixed fee is the standard way for an online poker room to make money by offering poker tournaments. Since online casinos are expected to publish the fee when accepting entries, it is simpler to understand for players as well.

The average tournament fee rate is equal to 10 percent of the buy-in. However, you should also note that some poker sites might decrease the percentage of the fee depending on the buy-in.

Tournament buy-ins, along with the platform’s maintenance and security, cover all the costs of running a tournament. The money that casinos hold for profit are also included in the tournament fees, but some poker sites charge this fee on top of the commission they take from the prize pot.

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