Poker stands out from most casino games because players face off against each other instead of competing against the house.
This unique setup might leave you wondering: How do casinos make money on poker if they’re not directly involved in the action? After all, the chips are just moving from one player to another. So, where’s the casino’s cut?
The answer lies in a concept known as the ‘rake.’ This is the fee that operators charge for hosting poker games online. In this article, we’ll break down how the rake works, explore different rake types, and look at other ways casinos generate revenue from their poker tables.
How do casinos make money on poker games?
Rake is the primary way online poker rooms make money. Since players are pitted against each other rather than the house, the operator doesn’t win or lose in the game itself. Instead, it takes a small percentage of most pots as a service fee, thus guaranteeing an income regardless of the outcome.
Poker rake can be calculated in several ways, depending on whether you’re playing cash games or tournaments.
How is the rake calculated in poker cash games?
The most common rake method in online cash games is the pot rake. A fixed percentage, usually between 3% and 5%, is taken from the pot once a hand reaches the flop.
To prevent the rake from becoming excessive (and to keep the games appealing to high-stakes players), casinos set a rake cap, which limits how much the house can take per hand. This approach is especially common in high-limit games, where pots can reach substantial amounts.
For instance, if the rake is 4% with a $20 cap, the casino will only take up to this amount, even if the pot exceeds $500. This guarantees fairness by preventing high-stakes players from being disproportionately penalized and ensures the rake remains consistent across all hand sizes.
How is the rake calculated in poker tournaments?
In poker tournaments, the rake is part of the entry fee or buy-in. The larger part of what you pay to participate is added to the prize pool, while the smaller portion represents the rake. For instance, if the entry costs $100, each player may put $90 into the pool, with the remaining $10 going to the operator.
Different types of poker rake
Let’s go over the most common types of casino poker rakes:
Pot rake: This type of rake is calculated as a percentage of every pot, and it can vary between 2% and 10% depending on the casino and the stakes. High-stakes games usually take lower rake percentages and vice versa.
Dead drop: Here, the rake is only paid by the player currently on the dealer button in the form of a fixed fee collected before the round begins, ensuring consistent revenue per hand.
Fixed fees: Unlike variable rake deductions, fixed fees are a rake method where the casino charges a set amount per hand or per time interval rather than taking a percentage of the pot. This fee is usually collected from each player at the table, regardless of who wins the hand.
Time collection: This time-based method collects the rake based on a predetermined period. Essentially, the longer you play, the bigger the total amount you must pay.
No rake: Some online casinos feature ‘no rake’ promotions to engage players and keep the action rolling. You only need to pay a small buy-in, and then you don’t have to worry about any additional charges.
Beating the rake in poker
You should try to find casino poker games where the rake is reasonable. However, that isn’t always possible. There isn’t a huge selection of dedicated poker platforms to choose from, so you may have to settle for above-average fees if you still want to play online against other players.
So, what do you do? While there are no 'cheats' on how to lower the poker rake, you can employ some adjustments to at least minimize its impact. Here are three that may prove beneficial.
Avoid small pots
If the rake is capped, it’s smarter to avoid small pots since the rake eats up a more significant portion of your potential profit. Instead, aim for bigger pots that reach or exceed the cap — that way, the rake becomes a smaller percentage of the total and has less impact on your winnings.
For example, if the rake is 10% with a $5 cap, a $50 pot will cost you the full $5. But if you play a $100 pot, the rake is still capped at $5, meaning you’re only losing 5% to the house. Over time, this difference adds up, so investing in bigger pots is more efficient where the relative rake impact is lower.
Steer clear of heads-up pots
In high-rake games, it’s best to avoid pots that start heads-up. They tend to be smaller, and more importantly, the rake takes a bigger bite out of your actual winnings.
For instance, in a $100 heads-up pot with a 10% rake ($10), you’re only winning your opponent’s $50, which means you’re effectively paying 20% of your profit to the house ($10 on your $50 profit). In contrast, if that same $100 pot came from five players contributing $20 each, you’d be earning $80 and only paying 12.5% of your profit.The more players involved, the less the rake cuts into your gain.
Exploit the ‘no flop, no drop’ rule
Certain poker rooms will only collect the rake if the hand reaches the flop. Since rounds can end pre-flop, this is an opportunity to win with no rake, no matter how big the pot is. The goal is to be aggressive and raise pre-flop, making the players in the blinds fold. If they do, 100% of the profit from that hand is yours.
How do casinos make money from poker bonuses?
Online poker promotions work differently from online casino bonuses. Most are rakeback-based, meaning you must generate rake by playing real-money games before the bonus is released.
For example, a site might advertise a $1,000 welcome deal, but you don’t receive it all at once. Instead, it’s unlocked in small chunks (like $5 or $10 increments) as you play cash games to contribute to the rake. This way, the operator ensures that it will earn money from you while protecting their bonus system from abuse.
In relation to free tournament entries, although the casino doesn’t profit from you directly, it’s not taking a loss either. In fact, the prize pool is pre-set and often subsidized by the site, meaning no additional cost is incurred even when they award free poker tickets. For that reason, the poker room can offer these entries as a low-risk marketing tool to attract new players.
How is money made from video and live dealer poker?
Aside from player-vs-player poker, gaming platforms also make money from casino-style poker games, albeit in different ways.
In titles like Jacks or Better video poker and live dealer variants such as Casino Hold’em, you compete against the house instead of other players. There’s no rake here, with outcomes generated by an RNG (random number generator) or human dealer drawing cards.
In both cases, the house features a built-in edge and earns money over time by keeping the odds on its side. These games are generally more profitable for the casino than PvP poker, as they generate consistent and predictable revenue due to the house edge, not relying so much on player volume and activity.
Conclusion
Online poker stands apart from other casino games because it pits you against fellow players rather than the house. Therefore, operators must still find a way of ensuring profit. They do so by charging rake — a small percentage taken from each pot in cash games — or applying fixed fees to tournament buy-ins.
From picking websites and games with favorable rake to employing various tactics and optimizing your gameplay, you can make the rake less of a nuisance. Understanding these systems can help you play smarter and protect your poker profits in the long run.
