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- How Do Casinos Make Money On Poker?
Luke Thompson October 6, 2023 8 min read
How Do Casinos Make Money On Poker?
Casinos are admittedly not as keen on hosting poker tables and events as they are on slot games. Yet, poker is becoming more popular at casino floors from Las Vegas to Atlantic City, with the game pretty much a staple of the experience.
This begs the question – what is in for the casinos hosting poker games, and how do casinos make money on poker, to begin with? Well, as it turns out, casinos have long found a way to get their fair share without stepping on poker players’ toes thanks to the fee known as rake.
Before we jump into explaining what the rake is, we will tell you this – it’s the house edge minus the unevenly stacked odds. In the broadest sense, the rake is the fee you pay to play, and then some. Let’s take a closer look.
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What’s Rake and Why Casinos Make Money on It
Rake is a basic fee or percentage that the casino keeps on every poker game, event, or tournament. In exchange, the casino will ensure several things. Those include a comfortable environment where players can get together and play.
Professionally trained staff that is well-versed in the decorum of poker, and a guaranteed prize pool that is the casino’s own contribution. Rake can have a very real bearing on how much you win as a rake of 10% is actually going to be worse than a rake of 2%.
Admittedly, the better you are at poker, the less this is going to matter, but a good understanding of rake in all its variations is definitely good knowledge to have. So, let’s check out a few other things that have to do with the rake.
Fixed rake games are very common and popular. They are based on the principle of fixing the fee that you need to pay for most types of poker, including No-Limit Hold’em, PLO, and most other forms of the game.
Now, even though there are some instances of the rake being rather steep, you will be playing at a rake of 2-5% most of the time. The fixed-rate means that there will be no change to the rake after a certain period – which is pretty common in tournaments, for example.
Of course, the rake is also bound by some rules and casinos set a limit on how much a rake can be in the first place. This applies to both the fixed-rake games and the ones that progress. The rake is calculated on the pot you win, so keep this in mind. However, the rake is capped. This means that you won’t have to pay more than the cap even if the percentage would otherwise mean paying as much.
There is also a chance that the casino would have no cap on the rake which means that you will have to pay the percentage as is. So, for a 5% rake, you would pay $5 on $100, but also $50 on a $1000 pot.
No Rake, Just a Fee
Another form of rake that casinos are loath to call a rake is the hourly fee that poker players will pay to play. Although there won’t be a rake fee applied to the pot that is being won, players would still have to pay a fixed fee (but not rake, right) to the casino. Now, you may be wondering if this is actually better than the fixed rake, we spoke about just a moment ago.
There really is no way of categorizing either of these. It all boils down to what the casino is offering in any given moment rather than picking one that is inherently better or worse. Just do your own shopping around and inform yourself about each card room’s poker rake before you actually play there.
Is Online Rake Better Than Land-based Rake?
Once again, this is something that will mostly require you to look around into the particular casinos and properties you are interested in. One thing we have noticed about online poker rake is that it’s usually capped at $3-$4 on the outside, which is actually not too bad at all.
On the other hand, you can expect the rake to be anything from 5-5.50%, and we have not seen anything smaller. In theory, online poker rake is a bit better, but you would still have to do a bit of research and not take this at face value as you want to make sure that you are not playing at a rake that is higher than what you are comfortable with.
The biggest factor here is traffic. Card rooms that operate online will be able to offer much better rake levels providing they have enough players
Tournaments and Poker Rake: A Different Beast?
Speaking of rake and tournaments, the term used here is buy-in. The “rake” is really more to do with a flat rate that the hosts would withhold and not contribute to the tournament winnings. For starters, a tournament is played with chips that have no real money value, and then again, they do.
The idea is that you cannot just go out of the casino and cash out. You play until you win or lose. Only then are the chips you hold attributed a real money value. In the meantime, the casino is going to collect a flat fee from your buy-in and withhold it for its expenses while contributing the rest to the event. So, if you see a tournament that says $1,100 + $100, the $100 is what we call a rake.
Now, just like we mentioned rake before when comparing land-based and online poker, we will do so once again when comparing online and land-based tournaments. Online tournaments will again have smaller rakes, but not always. You need to always keep a sharp eye on the rake and make the most out of any situation by coming to any game or tournament well aware of the fee.
Do Casinos Make Money Beyond Poker Rake?
The main way for a casino hosting poker games to turn any profit is through rake. However, this is not the only way as is often the case. After all, casinos have been organized as entertainment complexes that offer a number of complementary experiences, from wining and dining to cash games, to sports betting, and accommodation for the night.
Poker tournaments themselves will still bring a decent profit to the casino, but they are often treated as the means to channel audiences and crowds into cash games and other services offered by the casino. The crowds that a poker tournament pulls in will often take advantage of the cash games at the casino which is where the establishments start making real money. Does this mean that poker tournaments are only hosted to boost the footfall for cash games? Not at all – but it’s still a nice upside to the experience that all big and established casinos are aware of and definitely prefer.
Those who are coming to attend a poker tournament are not necessarily only players – many of them are supporters or just people who love watching professional poker played over the course of several hours, days or even weeks. This opens plenty of avenues for profit for casinos which are happy to offer these guests accommodation and recreational activities.
Even the poker players themselves may get a little bored and check out the slot and table games, which is precisely where casinos turn a profit. All in all, footfall is very good for casinos and this is precisely why they tend to work so hard to get more people on-site.
With Poker Everyone Wins – But The House Wins a Little More
Poker is indeed one of those casino games where everyone can walk away a winner – up to a point. Yes, the casino will win more in aggregate, owing to the rake and stragglers who hit the slot and table games, but all in all, poker players tend to be in control of how much they end up winning as well, making this segment very attractive and creating a symbiosis between the players and venues hosting such events.