Casinos make money on poker by taking a small percentage of each pot. For example, if there’s $85 in the pot and the rake is 5 percent, the dealer will take $4.
There is usually a maximum, or “cap”, which means the rake will never be higher than a certain amount regardless of the pot size.
For example, if the rake is 5 percent, but capped at $5, the dealer will not take $50 if there is a thousand in the pot — just $5.
On high limit games, some casinos prefer to charge hourly fees. In this case, there will be no rake but each player will have to pay a certain amount for each hour at the table.
How to calculate the rake in poker
It is the dealer’s job to keep count of the pot and instantly work out the correct rake.
Different card rooms have different procedures. Some will have a higher rake percentage, or a higher cap, or even a different way to calculate the rake.
For instance, in some rooms the dealers round up the size of the pot (e.g. $55 pot, raked as $60) and in other rooms they do the opposite (e.g. $92 pot, raked as $100).
Typically, poker dealers will simply get used to the procedure and will know how much to take from each pot automatically, without the need to do any maths.
Here is an example of a 5 percent rake capped at 5, assuming pots lower than 10 are not raked:
Do casinos rake every pot?
Rules and procedures vary among casinos, but typically not all pots will be raked.
The pot may not be raked if:
- There is less than a certain amount in the pot, e.g. $10 or less
- A player wins the hand with a raise pre-flop (no flop, no drop)
- The pot is split between two or more players
- There is a special promotion
Rake free promotions
Most casinos and poker rooms offer promotions to encourage the customers to play.
These could be jackpots or free tournament entries, but also promotions where players are not charged any rake. Let’s have a look at a few examples.
- Timed. Let’s say a poker room opens early in the afternoon, and there’s usually no game at that time. To encourage all players to show up earlier, the room may offer rake-free games during the first hour or so.
- Heads-up. Nobody likes to play poker heads-up (that is, two players instead of a full table), so some rooms do not charge any rake until there are at least three players.
- Winning hand. In some casinos, if you win the pot with a specific hand e.g. 3-2 of hearts, you will get a rake-free session.
- Regular player. Have you played for X nights in a row? You deserve a rake-free session!
- Food/drinks. Normally, drinks are free for all poker and casino players. However, in some casinos you may get a rake-free pot if you spend more than X on food or drinks.
Although the rake is by far the most common way casinos make money on poker, there is an exception and that is time charges.
This means that each player will have to pay a certain amount to sit at the table, either every hour or every 30 minutes. The pot will not be raked.
Typically, this only happens with higher limit games, e.g. $10-20.
How casinos make money with poker tournaments
The above applies to cash games, which are usually the most common form of poker (and the most profitable for the casino).
But what about poker tournaments?
In this case, there will be a fee, and this will be part of the buy-in.
For instance, the total buy-in will be $330, and the fee will be $30.
This means $30 will go to the casino (so the dealers get paid and hopefully the casino makes a profit) and the remaining $300 will go into the total prize pool.
The same is true for online tournaments as well, although obviously in this case there will be no dealers.
Do poker rooms ever lose money?
In all other casino games, such as roulette, there is a house edge which guarantees the casino will make money in the long run.
In the short run, however, a player may get lucky and win big, in which case the roulette table, or whatever game they’re playing, will lose money.
This cannot happen in poker simply because no poker table can ever lose.
If there is no rake, then the casino will not make a profit, and lose money as they still have to pay the dealers.
And some poker rooms, especially those who rely on tournaments and fail to attract enough cash players, may be forced to close after a while simply because the costs end up being higher than the profit.
That being said, poker rooms rarely lose money for the reason explained above — the players play against each other, rather than against the house.