How Do Casinos Make Money on Poker – Understanding the Rake

How do casinos make money on poker

10 minutes

Last Updated: May 20, 2022


If you’ve been gambling in casinos for some time, you probably know that every casino, be it online or land-based, has a house edge in all of its games. This is the way that casinos ensure profits over time.

However, there’s one casino game that doesn’t have this element.

When playing poker in any casino, you don’t have to account for the house edge. This is because you’re not actually playing against the house but against other poker players.

So, if not through house edge, how does the house make money from poker? The answer is simple. They collect a rake for every poker table they include in their poker room.

If you want to learn more about what a poker rake is, how it works, its main types, and much more, make sure to read this entire guide.

What is a Rake?

Most casual poker players and beginners don’t think too much about the rake in poker games. However, it’s key to understand how it works, as it can even shape your poker experience to a degree.

In simple terms, a rake is a commission fee every casino charges for operating a poker game. Since poker is a player-versus-player game, the house doesn’t care who wins and loses.

However, the fact that the house doesn’t have any stake in the situation also means that it can’t earn money in any way.

So, to cover the costs of operating the game and generate a profit, the casino charges a rake.

With this in mind, you have to accept the rake as part of what makes poker if you want to play it, as there’s no way to avoid it.

Moreover, to stay profitable in poker, you should beat both your opponents and the financial impact that the rake has on your bankroll.

How do Casinos Make Money From Poker Through Rake?

While rake is a uniform term for the fees that the casino charges for hosting the poker game, the way that these fees are applied can vary from venue to venue.

With that in mind, here’s how the casinos can charge you the rake for playing in their poker room:

Pot Rake

The pot rake is the standard rake system synonymous with this word. It’s the most common method casinos use to earn money from hosting poker games. It works in a very simple and easy-to-follow manner.

The casino takes a certain predetermined percentage of each pot after a hand is completed and the winner is determined.

This percentage is often limited to a certain amount, called the rake cap.

Looking at how much casinos charge, the percentages differ depending on where you look. Most land-based venues take between 5% and 10% of the pot as rake.

It’s equally important to mention that most casinos (at least those you should play at) only charge the rake if the hand gets to the flop stage of the game.

If everyone but one player folds during preflop, the winner gets the full amount, as the casino doesn’t take the rake.

Hourly Rates as a Rake

Certain poker rooms and casinos have a table charge or a time collection for their cash games. This is a fixed hourly fee every player has to pay.

This rake collection system is most often used in high-roller games.

The main motive for using this system in high-limit poker games instead of the previous one is that it streamlines and speeds up the game’s flow.

How do casinos make money on poker tables

For example, as low denomination casino chips aren’t usually used in high limit games, taking the rake using the chips that aren’t actually in play would just slow things down.

So, instead of taking the time to calculate how much the rake is and then take it from the game, the poker room simply has a fixed hourly (or half-hourly) rate everyone pays depending on how much they sit at the table, regardless of the pot sizes.

Fixed Fee Rake

Some casinos might charge a fixed fee rake that isn’t dependent on how much money is in the game. Logically, this is not a very favorable system for players, especially those that don’t have sizable bankrolls.

This is because the rake takes up a bigger percentage the smaller the pot is.

In some cases, players have even reported losing money by winning in a game with fixed rake fees simply because the pot was too small to cover the fees.

On the other hand, such a system is better for poker players that often play for large pots, as the percentage that the rake takes seems much smaller.

Tournament Rake Fees

Poker tournaments are an entirely different game format from cash games. To be more precise, in poker tournaments, the chips the players bet with don’t have any monetary value outside of that particular game.

Players simply use them to beat their competitors and reach the later stages of the competition.

Because of this, casinos can’t charge the rake the same way they do in cash games. So, in poker tournaments, players pay the rake ahead of the competition. They pay it at the same time when they’re buying in for the tournament.

For instance, a casino might have a buy-in structure of $100+$10. In this structure, the $100 goes directly to the prize pool. The $10 goes to the poker tournament organizer and is the rake in this case.

This straightforward example can serve as a general rule of thumb for how all poker tournament rake fees function. In most cases, the poker tournament rake will be 10%, although some poker tournaments might charge upwards of 20%.

How Online Poker Sites Charge the Rake?

Much like their land-based counterparts, online poker sites also use rake as a mechanism for covering costs and ensuring stable profits.

And, most of the rake-charging methods we’ve discussed above apply when talking about online poker platforms.

The standard pot rake is also the most common form of rake on online poker sites. Moreover, the tournament rake fees are also the same.

That said, the overall rake percentage for both pot rakes and tournament rake fees is lower on online poker sites than in land-based casinos and poker rooms.

How do online casinos make money on poker

However, hourly rates are one rate structure you won’t find on online poker sites. As online poker players don’t use physical chips, calculating the rake automatically through software isn’t hard, even in high-limit games.

Besides, online poker tables see player rotations more often, meaning that it would be challenging to implement a fair hourly charging system.

Looking at the rake forms that differ in online poker, the one that stands out the most is the subscription-based one.

Poker platforms with this system require the players to pay a certain subscription for playing for the site. That way, there’s no rake, so you get to keep the full amount of every pot you manage to win.

A subscription-based rake system can be very favorable for players, especially those who play a lot of hands.

For example, online poker players that grind out a lot of hands daily get great value from playing on a site with subscription fees.

At the same time, this system is less favorable for tighter players and those that only play only a few times per month.

Why Do Online Poker Sites Charge Rake?

It might not make sense why online poker sites would charge rake for organizing games. They don’t have nearly the same operating costs as land-based venues, as everything is done virtually.

Because of this, online poker sites often have lower fees for their tables compared to land-based casinos.

Often, online poker sites charge between 1% and 5% rake on cash games and between 5% to 10% on tournament fees.

The answer to all of this is simply that, just like land-based casinos, online poker platforms are primarily in the business of making money.

So, charging a rake ensures profit. Still, switching between online poker sites is convenient, so you don’t have to stick with a site if you find the rake unreasonably high.

Should the Rake Impact Your Poker Game?

Yes, the rake directly impacts the way you play the game. The main reason for this is that it lowers your Expected Value.

In light of this, the higher the rake, the tighter your playing style should be. This applies to both preflop and postflop ranges.

To go a bit deeper, there are two clear-cut situations that are undoubtedly affected by the size of the rake.

Primarily, a high rake will impact how you call from the big blind position. Besides that, it also affects your three-bet ranges.

This might seem too complicated for a beginner poker player. But, for those grinding out at poker tables every day, small adjustments like these can make significant differences.

Can You Lower The Rake In Any Way?

This might sound like a silly question, as the rake is already a predetermined percentage or fee on which you can’t act in any way.

While this is true, you can effectively lower your rake in the grand scheme of things simply by being more aware and careful of what pots you enter.

In other words, most poker players often play with significantly more marginal hands than they should objectively do.

Luckily, this isn’t such a difficult thing to change. Primarily, you need to understand why you’re calling or continuing the action and back up every decision with a purpose.

If you’re playing online poker, you can go a step further and look into more detailed data. For example, you can assess your profitability from different positions and see what cards are least profitable for you in a specific position.

Just avoiding playing the worst hands from every position can boost your win rate. More importantly in this context, it will affect how much you pay in rake over time.

What is Rakeback in Poker?

As the name implies it, a rakeback is the part of the rake that you get back. This convenient and player-friendly feature is mostly found on online poker sites.

It can often add up to a nice amount of money depending on how much you’ve played and how much money you’ve given to the casino in the form of the rake.

To make this a bit clearer, let’s say that you played poker frequently during the week and have given the casino $500 in rake.

How do online poker sites charge rake

Now, during that period, the online poker site has run a 35% rakeback promotion. This would mean that you received $175 back to your account at the start of next week.

Of course, the bigger the table limits are at the game you’re playing, the more rewarding the rakeback bonus will seem.

This is why rakeback bonuses often appeal the most to loyal players and big spenders.

Apart from that, rakeback promotions are objectively a great way to obtain additional value over time.

This is why professional online poker players often rely on it as a valuable technique for maximizing their profits and getting the most out of their poker bankroll.

The Importance of Always Knowing Your Rake

If you’ve read this detailed poker rake guide from top to bottom, you know everything about how casinos make money from the rake and the different types of rake you’ll come across depending on various factors.

More importantly, you also understand how it can directly impact your game and how you can find valuable rakeback offers to get the maximum out of your bankroll.

Having all of this in mind, the rake shouldn’t be something you’re wary of and shouldn’t be a reason to avoid playing poker.

It’s just a mechanism that casinos use to make money in the absence of the standard house edge that you’ll find in other casino games.

Of course, if you have the option of choosing between tables with various rake percentages, going with the one with a more favorable rake structure is always the smarter thing to do!

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