The House Always Wins or How Do Casinos Make Money on Poker

Currently, poker is the most popular, and the least profitable casino game. However, why casinos and poker rooms still offer poker tables and conduct tournaments? Today, we are going to take a look at how do casinos make money on poker.

Pot rake and the house edge

In order to understand how do casinos make money on poker, you need to understand the concept behind the rake. In a nutshell, the rake is a percentage that each house takes a from rather a tournament entry fee or a cash game pot. The system is similar to the taxation process.

Each casino has a different rake calculation formula. The amount usually varies from 2 to 10% of the cash game pot. In most of the casinos, the house will keep around 3 to 6% of the winner’s pot.

Besides, each house sets up its maximum and minimum rakes. The minimum rake usually equals to the lowest denomination chip. Moreover, a casino doesn’t take a rake if the flop wasn’t opened. Usually, the house sets a maximum rake limit, which will not be increased regardless of how big stakes are. For example, if you win on a table with the $10 maximum rake limit, you will still have to pay $10 even if your winning increase to $400 or $1000. At the same time, casinos without the maximum rake limit will charge 2-10% – therefore, you will have to pay around $50 from a $1000 winning.

Here comes the math

However, there is another factor that you should consider while calculating your winnings. Usually, tables with smaller minimum wagers have higher rakes. If you prefer playing on tables with $1 to $5 minimum bets, the casino will take around 5-7% rake. At the same time, playing on tables with $5 to $10 minimum wagers guarantees that the casino will not take more than 2-5% from the pot. In order to make a profit, casinos have to set up higher rake caps for small stake players.

Other options

Despite most of the casinos follow the rake calculation model, there are a few other options. For instance, a house may set a fixed rental fee or an hourly rental rate. Furthermore, visitors usually order drinks while they are playing, which also helps to increase profit.

What do casinos spend the rake on

To sum it up, casinos usually make money on poker by collecting rakes, rental fees and selling drinks. Part of the money is spent on facility maintenance, staff salaries, utilities, and other mandatory payments. The same pattern applies to poker rooms, where the house takes certain rakes from each pot. Some of the casinos have loyalty bonuses, which allow players to receive a cashback from their pots.

How do online casinos make money on poker?

Most of the land-based casinos and poker rooms take rake in order to cover their expenses. However, what about online casinos? Usually, online gambling sites in the UK have either a much smaller rake cap or no rake at all. The reason is simple: online platforms don’t have to operate a land-based facility or rent a space, so they can charge less. For instance, the Bet365 Poker allows new users to join tournaments for only £0.02 per hand. Some online casinos even stopped taking rake and replaced it with a fixed subscription fee. Therefore, if you prefer to keep your bets small, playing online poker is a much better option.

Cashback in poker

As it was mentioned before, some casinos have a cashback or a rakeback option. The idea was launched back in 2004 when online casinos started to return the rake as a part of the loyalty program. Although 3-5% from each play may not sound exciting, professional poker players’ rakeback may reach as much as a few thousand dollars per month. There are two types of rakeback: dealt method and the contributed method. In  case of a dealt method, a player will receive a fixed sum after everyone has been dealt a card. In case of the contributed method, a rakeback will depend on a player’s bets.

Conclusion

Now, you probably have a picture of how do casinos make money on poker. There is nothing extraordinary about charging visitors, just think of it as a form of taxation. However, understanding how the rake works and playing in casinos with a smaller rake cap will help you to enlarge your winnings. And if you want to join the poker community today, check out our review on Bet365 Poker and try freeroll tournaments.

You can discover more about Bet365 Poker here.