Casinos are known for making a fortune via numerous gambling games such as roulette, blackjack, slots, etc. These games have a built-in advantage for the house, which makes the casinos loads of money.
But what about poker? How does the house make money on poker when the players are competing against each other?
Although it might seem that poker doesn’t bring a lot of profit to casinos, it’s quite the contrary. If you want to find out how casinos make money off of poker, keep reading!
How Do Casinos Make Money on Poker?
Both online poker and its live counterpart aren’t played against the house, so casinos have to collect rake to make profits from this ever-so-popular game.
Most of the games that bring casinos money, such as blackjack or roulette, have a house edge. It’s an advantage that represents the average profit a casino expects to make from each game. The house edge is different for every game, and it can also depend on the casino.
For example, a casino might have a house edge of 5% for slots, meaning that for every $1,000 a player wagers on slots, the house will make $50. It’s a small margin, but it can make casinos a huge profit.
That’s where the rake comes in from poker, as it works in a similar way to the house edge.
What is Rake and How Does it Work?
Rake is a percentage of money that the casino takes from pots in games or tournament fees. It is a fee that makes casinos the most profit from poker and allows them to cover expenses for hosting poker games.
The best way to understand rake is to look at it as a tax.
Even though it may not seem like it at first, being familiar with rake is very important. It won’t only help you understand how casinos make money on poker, but it will also improve your money management skills during poker games.
Different Types of Rake
To help you understand the term better, we’ll go over the different types of rake in poker games.
Whether you’re playing Caribbean, PLO, No-Limit Hold’em, or any other variant of poker, the type of rake you’ll encounter most of the time is pot rake. It’s a fixed percentage ranging anywhere from 2-10% of the total pot, but it’s commonly around 3-5%.
The pot rake is so popular because of its ability to cover the casino’s costs easily. It is taken out of the pot after every hand and before the winnings are handed over to the winning player.
There’s also a limit on the amount the casino can take from the pot rake, as the maximum rake can end up being very costly for players who end up playing with very deep stacks.
Timed Collection Rake
To play at some poker tables, you’ll be required to pay an hourly fee, which is also known as a timed collection rake. The timed collection rake allows the casino to collect fees based on the amount set from the first pot and on the time each player has spent at the table.
This rake type is also preferred by professional gamblers as it allows them to play more hands against fish in poker and earn more money.
Dead Drop Rake
Although it is not as popular in casinos as the other two types of rake because it doesn’t bring as much profit, the dead drop is another way a casino can make money on poker.
The difference between the dead drop rake and other types of rake is that the player with the weakest hand or the lowest winnings pays the fee before the hand begins. The amount the player is required to pay is relative to the stakes on the table.
The best part about the dead drop rake is that it rotates every hand, making every player at the table pay at least once. This creates a sense of equality between the players, as everyone has to chip in for the rake.
What is Rakeback?
Now that you’re familiar with the concept of rake, you might be curious about the meaning of a similar-sounding term—rakeback.
Rakeback is a percentage of the rake that’s refunded to the players, which is most common at online casinos. Poker websites will usually run a promotion offering a rakeback percentage to get more people playing and to reward their loyal players.
The percentage that’s refunded depends mainly on the poker room, which is why you might sometimes notice a rakeback rate as high as 60% or as low as 10%. But, more commonly, the average rakeback ranges from 20 to 40%.
5 Other Ways Casinos Make Money on Poker
Even though rake is the major source of income from poker for most casinos, it is not the only way casinos can make money from this classic game. Let’s explore other popular ways casinos make money off of poker.
Apart from rake, tournament fees are another one of the most common ways casinos make money from poker. They are paid in advance as part of the buy-in, since players don’t compete for chips in tournaments but rather to outlast each other and reach the final stage of the tournament.
Most of the time, the average tournament fee is around 10% of the buy-in, but it mostly depends on the casino you’re playing at. So, for example, if the buy-in is $200, the tournament fee would be $20.
The buy-in usually goes to the prize pool, whereas the fee helps the organizers cover the expenses of the event. That’s why you’ll notice that the tournament rake is low for online tournaments, as the casinos don’t have to look for sponsors or pay for the venue, staff, tables, etc.
Casinos also make money on poker by hosting online poker games. Overall, they bring more profit as casinos don’t need to rent floor space or pay dealers as in live poker games.
All a casino needs to host an online poker table is good software and a stable server. Rake then becomes a major source of income for online poker rooms.
One more thing that a casino can cash in on during online play is gifts and tips. In most online poker games, you can purchase a virtual drink or a similar gimmick. Although these are usually cheap, they bring a lot of long-term profit gains.
Games such as baccarat, blackjack, roulette, and slot machines are another major source of income for casinos. Once people get bored of playing poker, they will usually turn to a game that’s as simple as slots in order to take a break and relax.
But, as these games have a bigger house edge than poker, they also bring more profit to the casino. People love playing these casual games as they don’t require much thought, and it’s an easy way to spend your time while taking a break from poker.
Drinks and Food
Pretty much every land-based casino nowadays offers some food and drinks for players, which brings them big profits. They are usually overpriced, and poker players love ordering them as the sessions usually tend to be prolonged.
As the average session can be anywhere between 2 and 8 hours, imagine how hungry and thirsty a poker player can get. Food is typically not allowed at the table, but the players can eat between games as much as they want.
Some casinos also give players drinks for free, but the catch is that the players need to start betting first. This makes more people wager their money, as no one can resist a free martini or a pina colada.
Lastly, no one in the world likes treating others with drinks more than poker players. There’s just something about winning a big pot and buying everyone a round or two.
Accommodation at the Casino
Most large and popular casinos have accommodation available on-site for players. The rooms are usually in the same building as the poker tables, making them convenient for people who want to gamble for a while.
The accommodation casinos offer nowadays brings huge profits to the organizations as a majority of the players are more likely to opt to stay at the casino rather than at a hotel. So, imagine the profit a casino earns when they organize a tournament and thousands of players visit the resort.
And, to make things even better for the casinos, it’s usually the high-rollers who are the first to reserve a room or two.
Tips from Players
Lastly, tips are one more way casinos make money from poker. Even though they don’t go directly to the casino, but instead to the staff, tips still help casinos make a profit.
Dealers and other staff usually earn minimum wages, as their pay generally consists of tips. Casinos save money on paying the staff by instead letting the players tip them.
But, it’s not so dire for the dealers as it might seem, as the tips they get are usually quite generous. Players tend to tip a lot, especially when they’re on a roll and the cards are in their favor.
Illegal Ways Private Rooms Make Money on Poker
Now that we’ve covered the ways licensed casinos make money on poker, let’s check out some ways shady operators use to scam their players.
One of the most common strategies cheaters opt for is marking cards. This technique is only viable for live play, as it’s clearly impossible to mark cards when you’re playing online poker. It’s super popular as it’s simple and doesn’t require much thought, yet it can be very effective.
Four of the most common marking techniques include:
These techniques are used to minimally change the look or the size of the cards, so once the dealer hands them out, the players know exactly what they’ve been dealt without even looking at the cards’ faces.
Card marking is so popular that it’s not only used in poker but also in other card games, such as blackjack.
Bottom Deck Dealing
Bottom deck dealing is one of the more common ways of cheating in private games, and it requires the dealer to collaborate with one or a few players.
The dealer needs to be highly competent to pull this off, as they have to shuffle the cards and set the deck in such a way that they can deal specific cards from the bottom of the deck. This allows them to help their partner in crime at the poker table at any given time.
For example, you might have a strong combination at the beginning of the hand to raise the bet a bit. Then, you get a straight or another strong hand, which the dealer intentionally sets you up with. You proceed to raise until the river comes and your opponent comes out with a royal flush.
Keep in mind that you can easily figure out if someone is bottom deck dealing if the dealer and one of the players are making eye contact with each other all the time.
Have you heard of the term “I have an ace up my sleeve”? This term comes from a cheating strategy called card flipping. This is one of the oldest tricks in the book, and it’s insanely popular because it’s so simple and straightforward.
All a player has to do to pull off this trick is to use their own cards they brought from home and switch them up with the ones at the table. The trick is simple, yet it requires some practice. The cheater needs to be fast and pull the card out when nobody’s watching.
But, because it became so popular, players got used to this sleight of hand and are now accustomed to noticing it. That’s why cheaters have been resorting to other methods, such as bribing the dealer.
Bribing the Dealer
As we’ve mentioned previously, dealers often don’t have high salaries, and the majority of their pay consists of tips from players. That’s why they might be more likely to succumb to cooperating with cheaters to try and earn some extra cash.
Dealers can rig the deck and deal specific cards to improve the chances of a certain player winning, or they can come up with some rules that would favor their partner. They can also try bottom deck dealing and easily turn the game upside down.
However, you would rarely encounter this at a legitimate, licensed casino, as dealers undergo rigorous training and keep up with operating standards.
Knowing all about rake and other methods casinos use to make cash from poker can change the way you look at and understand poker games. Hopefully, this article has helped you get familiar with all the important terms and concepts when it comes to casinos making money on poker.
To sum it up, here are the main points we covered:
- Casinos make money on poker in the form of rake, which is a percentage of money taken by the casino from game pots or tournament fees that allows them to cover operating expenses for hosting poker games.
- There are three most common types of rake, including pot rake, timed collection rake, and dead drop rake.
- Rakeback is a percentage of the rake that’s given back to players after every hand. It’s more common in online casinos.
- Casinos also make money from poker through tournament fees, online games, casual games, drinks and food, accommodation, and tips from players.
- Some of the strategies illegal casinos use to make money are:
- Card marking
- Bottom deck dealing
- Card flipping
- Bribing dealers