How Casinos Actually Make Money from Poker Games

Casinos Actually Make Money from Poker Games

A casino is an institution that caters to different types of gambling. Usually, there is a tourist attraction (e.g. restaurants and cafés, bars, hotels, retail shops, resorts, etc.) that is built close to or with the casino proper. The minimum gambling age range all around the world is commonly 18 to 21 years old, with the latter being the minimum age of entrance for casinos that serve alcoholic beverages.

Chance and skill are the main components of casino games, such as roulette, craps, blackjack, poker, and baccarat. Aside from card-and-ball games, various machine games (e.g. slots) are available. Regardless of whichever game you choose to play, there will always be odds that are mathematically determined to guarantee the house’s advantage over all players — this is referred to as the house edge.

Poker is the umbrella term for card games that has betting as a fundamental feature, alongside strategy and skills. Poker games differ in several aspects, including the following: (a) the number of hidden cards; (b) the number of community (shared) cards; (c) the number of cards dealt; and (d) the procedures followed in betting.

Since the early 1900s, poker as a whole has flourished from being a leisure interest within small groups of aficionados, to being a widespread endeavour among players and viewers alike. It has likewise progressed with technology, since online poker has become quite a hit among enthusiasts.

You might have been wondering about how casinos make money on poker. They do this through something that is called as rake, which we will explain further in this article.

What is a Rake?

A system that generates profit from a poker game, rake is the fixed commission fee taken by the casino (cardroom or otherwise), depending on the amount of the existing pot. Generally, it makes up 2.5% to 10% of the entire pot per poker hand, with the maximum percentage to be determined by the institution. In some instances, the rake has a value that never changes, even as the pot itself grows. Some institutions do not enforce a percentage rake in community card games (e.g. Texas Hold ‘Em), particularly when a hand does not contain a flop — this concept goes by the phrase “no flop, no drop”.

Casinos utilize the rake as their primary source of revenue, especially since the house does not have a wager against the players. Poker is a game where players bet against each other, unlike blackjack or roulette, where the players are pitted against the house.

an image showing a poker coins
POKER

The earnings from the rake are used to support the casino and to keep it up and running. For traditional casinos (also known as brick and mortar casinos), the rake is utilized to cover the costs for several services, including but not limited to:

  • Keeping a dealer for the games (in some institutions, the dealer’s tips are added to their income);
  • Providing support to staff members in all levels;
  • Maintaining the use of gaming apparatus; and
  • Sustaining the physical building of the casino itself.

The rake from online poker games is used in covering the costs of software, overall support, and personnel. The fees in online poker are commonly lower than those in live poker.

What are the Different Types of Rake?

Casinos can implement their fees in many various ways, which we will explain below.

  • Pot rake

In this type, a percentage of the pot is directly taken as the rake. During a live poker game, the dealer sets aside the chips from the pot as the game progresses. After the hand has been completed, the dealer places the separated chips into a box for safekeeping.

During online poker games, the game software automatically holds onto the rake, with some variances among programs. Some have the amount shown next to the digital dealer, then withdraws increasingly as the rounds of betting proceed. In others, the rake would only be withdrawn from the pot after the end of the entire hand; the winner gets the remaining pot.

  • Dead drop

Before any cards have been dealt, the dealer takes the rake (fee) that the players have put on top of the dealer button.

  • Time collection

This method is also known as table charge or timed rake. Here, a fixed rate would normally be collected every, say, half an hour or so of the game. Timed rakes are common among poker games with higher limits.

  • Fixed fees

As the name suggests, rake collected through this method is on a fixed rate and does not change with the pot value.

  • Tournament fees

Rake in tournaments is passed off as an entrance fee. Some tournaments show the value as buy-in + house fee (for example, $100 + $20, respectively). Others list off the percentage rake alongside the buy-in value.

  • Subscription fees

Commonly found in online poker rooms, players are charged with a subscription fee per month. Thus, no rake is collected from pots or tournaments.

  • Rake free

This is likewise common in online poker. Some websites have removed the concept of rakes altogether (thus, rake free). Instead of collecting rake, they generate earnings by charging memberships and/or deposit fees. Others do it by leading traffic to their other, more profitable ventures. There are also some companies or websites that offer a rake free service only to frequent players and reduced percentage rake to the rest. More often than not, only financially secure online card rooms can offer rake free games to their players. This is because going rake free means that you will have to pass on the opportunity to collect revenue, which you can use to maintain the website, promote your business, and so on.

  • Rakeback

If you are familiar with online shopping, you have most certainly heard of the term cashback. In poker games, there is a similar concept named rakeback, where some online poker websites offer players a “returned” part of the rake they have paid. This is to encourage them to keep using the website.

An image showing a group of people playing Poker

Is Collecting a Rake Legal?                                                 

In most areas, so long as the group who takes the rake has the appropriate gaming permits and licenses, then rake collection is legal. Still, in several jurisdictions, as long as nobody collects a rake, they could continue playing poker for money while they are inside a private building.

Conclusion

Casinos are a gambling enthusiast’s ideal place. Among the various card games and machines that could suit their needs, poker has proved to be one of the most famous casino attractions. As a popular card game amongst players, different institutions have come up with a way to generate profit from poker.

Collecting a rake helps casinos make money on poker. A rake is a house fee that could be retrieved from the cumulative earnings of the pot, entrance fees, and so on. The money they get from rakes are generally used to support the institution and its staff as a whole.

There are different types of rake collection, which include pot rake, tournament fees, fixed fees, and subscription fees. Some online casinos even offer rake free gaming and rakeback rewards feature to their players.

Also read: A Guide to Betting Odds

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