How do casinos make money on poker?

Sarah_Taufiq · July 31, 2021, 3:38pm

How do casinos make money on poker? A casino’s most commonly used method to make money from players in a poker room is the pot rake an ascended commission fee usually taken from the pot of each poker hand. A pot rake is usually between 2.5 and 10% of the pot, up to a pre-planned maximum amount.

Casino:

In spite of, how much joy they bring, casinos are complete businesses. They have to make a profit from their customers or the players in each area of their operations.

Their motive is to make money from every table, machine, and player in the room. By making sure there is a house edge in every game on the gaming floor, they do just that – well in the long run that is what they always do. This is the main reason slot machines are designed to a specific Return to Player (RTP) percentage, why you see the 0’s on the roulette wheel and why craps just have such awful odds.

When it comes to poker, there is no house edge because players are not in opposition to the house, they are against each other. You would be forgiven for assuming that casinos offer the tables for the good of their hearts, but that doesn’t much sound like the establishments that we know and usually love.

Rather, casinos offer poker and take a little helping of chips in a diversity of different ways, be it with the rake, the buy-in, or even the drink and food available at the casino.

There is so much more than meets the eye when it comes to the casino, making money from poker. So let’s take a look and see precisely how a casino might make its money from poker rooms.

How do Live Casinos Make Money from Poker?

Although rake is the basic source of income from poker games, it isn’t the biggest one for live venues as compared to other games. In reality, many casinos are happy to break even when organizing a huge tournament and benefit on the side.

While this may not make much sense at a very first glance, it is perfectly reasonable if we look at a wider picture.

First of all, tournaments will frequently serve as great feeders for cash games that is great news for casinos that have big poker rooms. Casinos make much more money from cash games since a long cash session can net them a massive amount of cash without any exposure. It is a nice way to make some extra cash for the house.

Beyond this, huge tournaments with solid guarantees are a sure way to get remarkable foot traffic through the door. Plenty of those visiting the casino isn’t exclusively poker players.

They are likely to find their way to table games and slots after the tournament, which means that over a few days, the casino will be making a lot of extras money from these players.

Of course, there are also other services offered by some of the larger operators, for example, food, drinks, and accommodation, and all of these are likely to create some revenue with a lot of people getting into play in a tournament. So it all ties in nicely to make a solid bottom line.

Rake

The rake is the name given to a charge or fee a casino earns in the game of poker to cover its costs and make a profit from providing the game.

There are a couple of various types of rake common in casinos with ‘pot rake’ and ‘time collection’ forming the basis of the two categories.

Cash Games – CAP vs. no CAP rake

In a cash game, whether it is PLO, No-Limit Holder, or any other type of poker out there, the rake is taken out of a huge majority of pots before they are given over to the winner.

In most casinos, it is a particular fixed percentage, going anywhere from a range of 2% to 10% of the total pot. Both of these extremes are quite occasional and, in most games, you’ll be paying rake of 3% to 5%.

Generally, there is also the maximum cap on the amount of rake that can be drawn out of any individual pot, which is based on the particular casino’s rules.

It isn’t unfamiliar for people to sit with very deep stacks (500 big blinds or more), and if two particular players end up in an all-in scenario, having no cap on maximum rake could end up being very pricely for them.

Still, some venues do go with the no cap rule, but these are not the games you want to be playing.

Let’s look at a small example, just for the sake of clarity. You are playing a $1/$2 game, and end up in an all-in situation where you put all of your money i.e. $300 reflow against another player with a similar stack.

Hourly rate option

Even though a previously mentioned way of collecting rake is the most known for cash games, some of the casinos hire a different model.

Sometimes you can find yourself in a certain position in a game, where you have to give an hourly fee to sit at the table. It means that there will be no money withdrawn from the pot when you play, and rather, you will be paying a fixed fee.

Neither of these options is good or worse, so you should see it just as a varied model and know about its existence.

Drop

Drop poker rake is another way for brick and mortar casinos to earn money. Contrary to a pot rake where only the winner of the pot pays the rake, drop rake is a preplanned fixed amount that the player on the button needs to pay before the hand begins. The money of the drop rake is relative to the stakes of the table.

While the button rotates after each hand, the drop rake forms a sense of parity between all players. They all have to pay roughly the same amount to play, regardless of the money that players make.

Time collection

In some of the higher limit games ($10-$20 or above), a pot rake will be ignored and a time-based collection will be taken.

A time collection rake will generally be collected every half-an-hour during the game and in one of two main ways:

Player time	A set amount collected from every player
Time pot	A set amount collected from the first pot over a certain amount

Games should always tell you before you play which kind of rake the casino will take. Even if there is not much you will be able to do to change the game – it is always nice to know where your money is going.

I personally give preference to a pot rake so the value is always relative and so that I don’t feel like I’m paying for how much time I’m in the seat – but as I say, it’s a personal choice.

Differences based on the stakes

It is essential to mention that most small limit games are actually worse than the higher ones in terms of rake.

In $1/$2 games, you will often have a rake of 5%+ and a fairly high cap. Higher limit tables generally have a rake of around 3%, and the cap is also lower related to the stakes.

Although this may not seem fair to small stakes players, it’s not hard to acknowledge why this is looking at it from the business perspective. Either you’re playing with $2 or $100 blinds, you’re still occupying a table and need a constant dealer presence to let the game going.

So, to make it easier at lower limits, casinos have to take higher rakes relative to the blinds to offer their services.

Tournaments

Tournaments are a totally different game format where players compete for chips and try to outlast others in the event to make it to the money stage. Thus, chip pots don’t have financial value, and casinos can’t get their rake the same way they do in cash games.

Tournament charges	$100
Buy-in charges	$110 or $120

This extra $10 or $20 on top of that $100 is also a rake amount, and it doesn’t go to the prize pool. This amount is kept back by the casino and used to cover their expenses for organizing the event.

If you play tournaments and only pay attention to rake, you’ll find that online games often have much smaller rake than the live ones, specifically at lower stakes.

Obviously, this is easy to explain.

Online platforms do not have many extra expenses for launching the tournament.

However live venues have to pay for:

the dealers
rent tournament floor space
tables
to organize everything to have a pleasant event, which comes at an extra cost for players.

Differences between brick-and-mortar and online rake

When it comes to online rake, there are a couple of differences from their brick-and-mortar counterparts with the potential for bonuses, rewards, and rake-free sites available.

Rake free poker sites and casinos

Some online poker sites have cottoned on figured out that players don’t much like having a percentage of their pot taken away and have terminated rake entirely.

Instead of charging a percentage, these sites target ■■■■■■■■ poker players by casually charging a monthly membership or deposit fee.

This isn’t simply the best way for the casino to recruit more players who may find interest in other ‘house favorable games, but it provides the opportunity for serious poker players to get the most out of those games.

While, due to the high costs associated with the operation of an online poker room, various companies offering rake-free rooms have since seen bankruptcy. Despite this, there are now several financially stable online poker rooms offering rake-free games, albeit with some caveats depending on the site chosen.

Always remember to read the small print; you’re not always signing up for what you might think.

Rake back player rewards

Another option that online poker sites and casinos can provide is a player reward scheme known as ‘Rakeback.

The concept is simple: poker providers will return part of the rake (or tournament entry fees) to the player as an incentive to continue playing at the particular site. This rewards scheme was launched in 2004. As online poker became more known, professional players began using rakebacks as a method of increasing profits or cutting losses.

How many hours, how many tables and what stakes a player puts on the line affects the amount that can be raked back.

For those with a serious commitment to the game, this value could be in the thousands of dollars every month.

It didn’t take long for professionals to start using these systems, giving rise to ‘Rakeback pros’ – players using a less intensive losing strategy throughout many tables at the same time while offsetting losses through rakeback rewards.

Rakeback can be found in some cash games and can be estimated in one of two ways:

Dealt method	Awarding the same amount of rakeback to each of the players dealt into a hand
Contributed methods	Awarding players based on their actual contribution to the pot.

Other income

By now you will have worked out that the poker room is one of the least profitable rooms in any casino.

With such small takings and contribution to revenue when compared to blackjack or slots it’s a wonder there are poker tables at all.

The issue is that when we look at all the records of statistics and the data surrounding the ways a casino makes money, it is unavoidable that we stare directly at the takings created as a direct outcome of the game.

There is a great deal more than meets the eye when heading into a casino the games are not the only places where casinos make money.

Accommodation

When you’re heading to any of the big casinos for a legitimate vacation, where is the first place you consider staying?

You could get a cheap deal at a motel maybe head to a stand-alone hotel, or you could stay at the very place you are coming to visit. I’m guessing the latter option appeals to the majority and it makes sense for the casinos to charge accordingly.

Whether it’s a group of friends flying out for a weekend away or a wedding party celebrating with a little poker all the rooms work to increase the resort’s bottom line.

That’s just with friendly parties. As soon as you consider the huge amount of money that comes when thousands of poker players visit for up to a week at a time for big tournaments, you’ve got yourself a hotel full of high-rollers.

There are definitely worse people who could be occupying the rooms.

Alternative games

If you and a couple of friends are heading out to the casino to play some poker, what are the odds that you are only going to play a few rounds and head back home?

You might come to play the poker, but with so many other games at which to try your luck, there is bound to be something that takes your fancy and makes you stick around.

Although casinos won’t make a huge difference to their bottom line by providing the poker tables, they will with the blackjack, slots, and roulette you will soon find yourself playing.

We have all been there (if you’re a poker player). You fly into town for a big tournament reach a little earlier than you were expecting and have a day or two to kill before heading back.

Where is the first place you go? Right-back via to try your hand at something else. It’s not every day you are in one of the big casinos; you might as well make the most of it.

You are having fun at a game that is a bit varied from the one you were expecting and the casino keeps its house edge and eventually gains profits from you. Win-win.

Entertainment and shows

Everyone needs a break from the cards every now and then.

Casino resorts know this. They also know there is no business like show business. No matter what time of year customers are planning to visit the world’s most known casinos, there are always enough of great acts and entertainment to choose from and watch.

From the biggest bands and funniest comedians to the most talented magicians and circus performers, everything you could hope for can be found – providing you have chosen for a good casino that is.

Although the acts will determine the lion’s share of the takings, it’s no surprise that the casino will take a particular commission, too. You might come for the poker, but you can bet your bottom dollar you will end up at a show!

Food and drink

Food and drink are big money makers in the casino business, even if your venue of choice is anxious to offer free drinks for your time at the table.

Pick any casino-based resort and you will be given enough of cuisine choices to pander to the special taste you might fancy on any given night. The drinks might be free while you are playing but, depending on where you’re eating, you might be paying a little more on the luxury side for your food.

Depending on the agreement, the casino will benefit from this through a percentage of the amount customers spend in the restaurant or by renting out space to the eateries.

There is much to be said about the food in the casino, but I bet you never thought that the poker room would lead you there.

Tips

Last but not least come tips. Although they don’t exactly make the casino money from the poker room, they perform aid pay for the staff and that’s good enough for me.
It’s common for the assorted staff members around the poker room in a casino to be tipped often by the players.
It is not uncommon for some to tip pretty open-heartedly, too. Maybe someone is in a good mood or having a good run, whatever the reason is, staff are generally more than happy.
Tips tend to form the vast of the pay packet for the staff on the poker room floor, so it’s hardly astonishing that they don’t tend to be paid so generously by the casino.
With not-so-great wages, we are seeing another way casinos make money on the poker room and that’s by keeping it in their own pockets.
Keep all this in mind the next time your dealer gives you a couple of great hands.

Summary:

Now you know how casinos make money from poker and how they can afford to keep the games running even with tournament prizes being so big.

With rake in place alongside all the additional income coming from players trying their luck with casino games, poker can be a very reasonable resource to boost their bottom line. Even if you’ve never heard of rake before, it should come as no surprise that casinos are making money from poker games.

Frequently Asked Questions

1- How do casinos make money on poker games?

Rake is the scaled commission fee taken by a cardroom operating a poker game. It is generally 2.5% to 10% of the pot in each poker hand, up to a predetermined maximum amount. There are also other non-percentage ways for a casino to take the rake. The rake in live games is generally higher than for online poker.

2- Do casinos cheat at poker?

Casinos aren’t going to leave material evidence of cheating lying around. You may not like how your dealer holds the deck, or how he deals the cards, but this isn’t material evidence that would hold up in any court. Not that Poker cheating doesn’t happen, pretty sure it does, such as collusion.

3- How does poker work in a casino?

Casino poker is always played for table stakes, meaning you cannot bet more than you have on the table in chips at the time. In some casinos, $100 bills play if they are on the table, but check first before assuming this is true. Remember to tip. Poker dealers and waitresses make a living on tips.

4- How do poker casinos make money Reddit?

All casino games (with the exception of Blackjack–which can be beaten by counting cards, and poker-the house takes a preset cut from each pot or rent out tables for a set fee) are calibrated to make money. So as long as people play at the casino, the casino WILL make money.

5-How much money do you need to play Texas Holdem at a casino?

The recommended size of your bankroll is 20 times buy-in or maximum 5% of where you want to play. This means that if you want to have the best chance of making money at a $1/$2 game where the maximum buy-in is $200, you should have a bankroll of at least $4000.

6- How much does it cost to play poker at a casino?

Some dealers speed up the game to get more tips, and increase the casino’s take. In that game, that $25-per-hour figure is the approximate average cost per player with nine players at the table and 30 hands dealt per hour.

7- Can a casino kick you out for winning?

Assuming you only play at legal, licensed casinos that comply with the law, you have no reason to expect to be asked to leave or refused service because you win money. Your wins are the best advertising the casino can get. Paying winners don’t cost casinos nearly as much money as most people believe.

8- How do you cheat on cards?

Minimal Skill Methods for Card Cheating
Peeking or Glimpsing
Marked Cards
Collaborating with a Friend or “Soft Playing”
Dumping Chips
Hiding or Stealing Chips
Cold Deck
False Shuffling/False Cuts
False Dealing

9- When should you walk away from a poker table?

When you have had enough poker for one session, feel free to leave at any time. You don’t have to wait for the end of a hand (unless you are in it), or for the button to be in a particular position. You don’t need anybody’s permission. You can just pick up your chips and simply walk away.

10- Can I get rich playing poker?

Poker players get rich by winning online games, tournaments and live cash games. Depending on their skill-set, some players may choose to focus on either online poker or live tournaments. If they are versatile enough, they can earn a living from both.

Conclusion:

Rake is the scaled commission fee taken by a cardroom operating a poker game. It is generally 2.5% to 10% of the pot in each poker hand, up to a predetermined maximum amount.