The stakes are high, and the adrenalin is even higher when you get a taste of what casinos have to offer. Regardless of whether you prefer live dealer casino games, casino table games, or something modern such as online slots, the thrill is a constant. Poker is one of the most popular casino games to have stood the test of time, and the digitalization of casinos has made it even more accessible and popular.
Given its staying power and appeal to patrons from different generations, you might wonder how casinos make money on poker, especially because players don’t play “against” the casino. Instead, they play against each other. Each player makes their bets throughout the game, and the winner takes home the pot.
So, if you’re not playing against the house, how does a casino make money on poker? The answer is simple: Casinos generate revenue and offset the game’s operational costs by taking a rake in poker games.
When playing poker at the casino, it’s important to know what certain common poker terms like “rake” mean. So, what is a rake in poker? This blog delves into what a poker rake is, how it works, and how a casino rake generates revenue for the house.
How Do Casinos Make Money on Poker?
Even though it’s a player-versus-player game, casinos do indeed make money on poker. They do so by taking a portion of the winnings to offset the costs of facilitating the game. This is known as “the rake,” which some people have usefully compared to a tax. However you like to think about it, the rake is part and parcel of playing the much-loved game at a casino.
In brick-and-mortar casinos, the poker rake can cover the costs of equipment, staff, and other overheads. In online casinos like BetMGM, the rake can cover hosting costs, software, and any other online operational costs.
How Casinos Calculate the Rake
To paint a clearer picture for you, in poker cash games, casinos make money by taking a small percentage of the pot. While the percentage size may differ from one establishment to another, it is capped depending on the stakes (blinds) that you are playing. For example, in $1/2 no-limit hold’em, the capped amount could be anywhere between $3 and $10 a hand. This often depends on the size of the pot. In most cases, however, the house rake is a fixed percentage.
Cash games that follow the fixed percentage rake model can have a rake going anywhere from 2–10% of the pot, though these are both rare extremes. Poker games commonly have a rake of between 3–5% of the total pot. If you’re playing a high-stakes poker game, you may worry about how high this rake could grow, which is why casinos implement the caps. So, if you’re playing a game with a 5% rake and a $10 cap, the casino can’t take more than $10 from the pot per hand, regardless of the pot size.
While a fixed rake is the most widely-used rake structure, some casinos do employ an hourly rate rake model where players will need to pay an hourly fee to sit at the table. With this option, no money is taken from the pot because players will be paying a fixed fee already.
When it comes to the rake structure for poker tournaments, casinos make money through the buy-in that players pay to participate. In this case, the rake is broken down into two parts: the first, larger, part goes into the prize pool, which is usually around 90% of the buy-in; the second, smaller, part goes to the tournament operators and usually amounts to 10% of the buy-in. So, in a $100 buy-in tournament, $90 would go to the prize pool and $10 to the operator.
Differences Based on the Stakes
Seasoned players often prefer higher-limit poker games over lower-limit poker games. The latter typically have a rake of 5% or more and a high cap, so in low-stakes games, a significant chunk of the pot is claimed by the casino, which can impact the players’ potential winnings.
On the other hand, higher-limit tables are a bit more player-friendly in terms of rake. They usually have a rake of around 3% with a lower cap. The reason why higher limit games are better based on stakes is that, regardless of the blinds, the cost of infrastructure and equipment remain the same, so it doesn’t cost anything extra for the casino to cover these costs. Higher-limit games, with their potentially larger bets, allow the casino to manage its costs while still offering players a more agreeable rake structure. It’s a practical approach that ensures everyone, from the casino to the players, gets a fair shake in the poker game.
Other Ways in Which Casinos Make Money
Considering that a casino’s offerings are so varied and diverse, it only makes sense that a casino will diversify how it makes money. Apart from poker games, casinos also make money from the following:
Table Games and Slots
Although poker is a drawcard for people, some patrons prefer table games and slots, which are also key sources of income for the casino. To join a slot tournament, casinos typically charge a fee.
Unlike in poker, a key consideration in other casino games — such as blackjack and slots — is the house edge. It’s extremely important for beginners to understand the house edge and how it works because they are essentially playing against the casino and not other players. The house edge is there to guarantee the casino an income from these games. So, only by fully understanding it can players effectively plan their strategies, play responsibly, and manage their bankroll effectively.
Food and Drinks
This applies to brick-and-mortar casinos. Everybody knows that no casino experience is ever complete without food and drinks to power you through what may well be a very long day or night at the table or slots.
Accommodation
Patrons spend hours, sometimes days, at a casino, which can be tiring. In such cases, the convenience of having accommodation within walkable distance is an unmatched luxury. This is especially true for players who might have traveled far to enjoy the live action or learn a few tips and tricks from observing the greats at play in a tournament.
Explore a Variety of Poker Games at BetMGM
It’s no secret that casinos are in the business of making money. With poker being a timeless and memorable casino game, casinos will always profit from it. In addition to many other online casino games, you can access an impressive selection of poker variants at BetMGM’s online casino to keep things exciting. Discover these and more when you register.
