Poker Basics: How Casinos Make Money on Poker

Every casino is an enterprise designed to bring value to its founders. Whether you play roulette, slots or poker, the website has an inherent advantage known as the house edge. It guarantees that in the long term, the casino will always make money. However, you do not play against it — your opponents are other players.

The poker economy is based on one four-letter word — RAKE. This is the percentage of money kept from nearly every entry fee or cash game pot. In most cases, 2% to 10% goes to the casino in total.

Understanding the Basics of Rake in Poker

In cash games, the rake is a portion of all pots deducted before the winner gets paid. Most commonly, it falls within the 3-5% range. Based on the rules of your house, the amount of rake taken from any individual pot is limited. Some casinos do not have a cap rule at all, so the games can be extremely costly for players. Steer clear of such sites. Here is an example:

• You play a $1/$2 game. 
• Eventually, you wager your entire $300 preflop against the opponent with a similar stack. 
• If the rake ratio is 5% up to $10, this means you can pay up to $10 from every pot. 
• Without the cap on the rake, you would end up paying $30 in our example, as the total pot is $600.

Hourly Rate 

This is the second common model. Instead of raking in a portion of the pot, the website may charge players an hourly rate. In this scenario, no money is taken from the pot. 

Either system can work for you. However, games with small limits (‘$1/$2) are the least preferable if the rake principle is applied. This is because they often come with a rake of 5% and a relatively high cap. In comparison, tables with higher limits may have a modest rate of about 3% and a lower cap relative to the wagers.

At first glance, this distinction may seem unfair. However, from the business feasibility perspective, it makes perfect sense. Every player occupies a table and needs attention from the dealer, whether they are playing with $3 or $300.

Tournaments

In tournaments, where players compete for chips, casinos get their profit differently. The rake is paid in advance from the buy-in — the extra $10 or $20 on top of $100 that does not go to the prize pool. In online competitions, the rate is usually smaller as the platforms do not have the same cost as land-based establishments. They do not have to pay the dealers, rent the floor space, or organize refreshments.