Casino rake

One of the biggest misunderstandings about the poker game among people who don’t play it is how casinos make money from it. While many people think poker is a sucker’s game, like most casino games are, the truth is that the house doesn’t care who wins or loses at the poker tables.

Casinos get paid either way through every player involved in the games paying a fee that we call poker rake.

Poker rake is paid in cash games and tournaments, although it is usually called an entry fee in MTTs.

In both cases, a small percentage of the money players are playing for is taken out of the overall pot and used to pay the dealers and other staff and allow the casino or poker room to profit.

Just knowing rake exists is not enough, though, as there are many different rake structures and rules related to it, which is why we want to cover everything there is to know about rake in poker.

We will start by teaching you what is rake in poker and how it affects you and proceed to teach you what rake methods are applied in live and online poker rooms and what it all actually means.

What Is Rake in Poker?

So what is rake in poker exactly? The answer is quite simple; poker rake is the fee taken by the house to pay for its expenses and turn a profit at the poker tables.

Depending on where you play poker, the rake can be quite reasonable or devastating to all the players at the table, which is why it’s very important to know exactly what’s happening.

Poker players are used to paying poker rake, but many don’t know what percentage is being paid, what the rake cap is, or how much they pay each time they play poker.

If you plan on being a professional poker player, or you already are one, you should definitely study rake quite a bit, as it is an essential component of the game.

Rake in Poker Tournaments

Poker tournaments charge players for participation by charging every player who enters the tournament a fixed fee at the start.

Depending on the tournament type, whether you are playing online or offline, buy-in, and other factors, this fee can be between 5% and 20% of your tournament buyin.

Some live tournaments may end up charging you an extra 3% or so for dealers, while others will expect winners to give a percentage of their prizes as tips for the staff.

Smaller poker tournaments often charge a higher percentage of the buyin fee as poker rake since the costs of throwing a tournament can be quite significant even if the buyin is low.

Higher buyin tournaments, on the other hand, can have a fairly low rake, with many of the biggest events charging anywhere between 3% and 5% of the overall buyin.

It is usually separated from the buy-in part, which goes directly into the prize pool. For example, a tournament might have $1000 + $100 buy-in and be listed like that or simply as an $1100 event. Either way, $1000 goes to the prize pool, and $100 is taken by organizers to cover their expenses.

Regardless, you are going to end up paying some rake in every tournament you enter, and this amount will affect your bottom line as the rake adds up over time and reduces your overall poker winnings.

Rake in Poker Cash Games

The term rake is typically associated with cash games, where players play with chips that have an actual monetary value.

In these games, the rake is usually charged from every pot. Every time a hand is dealt and players see a flop, a small percentage of the money on the table will be taken by the dealer as a rake.

In most poker rooms, the "no flop, no drop" rule is applied, which means the house will not charge any rake if players don't see a flop. If there are five raises before the flop, one player goes all-in, and everyone else folds, and no rake will be charged.

Yet, most poker hands go to the flop and beyond, so the house charges rake on the vast majority of hands.

In many live poker games, the rake will be set at anywhere between 2% (which is great) to 10% (not so great). However, there is also something called the rake cap.

The rake cap determines the maximum amount of money the house can take from a pot. If there was no rake cap, you could end up paying hundreds and even thousands of dollars of rake per hand in some games.

In Las Vegas cash games, the rake is often set at 5% but also has a $10 rake cap for lower stakes, which means the casino will not charge more than $10 per hand, no matter how big the pot gets.

There are games in some casinos that don't have a rake cap at all and that keep the rake at 5%, which gets very expensive, especially when the action gets heated.

On top of that, there is also a timed rake model where you pay a fixed fee for playing the game, usually every 30 minutes or hourly. This is more common in higher stake live games and rarely online, but it is actually quite beneficial for the players.

With a high standard rake charged by the hand, it makes sense to tighten your ranges to avoid paying a lot of rake while not winning so many pots since your range will be weaker. On the other hand, you can play as many hands as you want with rake paid for time played sicne that does not affect how much you pay.

Different Types of Rake in Cash Games

Back in the day, live casinos used to charge rake in cash games using a very simple formula. A certain percentage of the pot would be taken off the table, often without any limit, and nothing else would matter.

Poker has come a long way since those days, and online poker sites tend to regulate their rake policies much more strictly.

In online poker cash games, the origin of the rake matters quite a bit, as poker site award players in various ways based on the rake they have contributed.

For this reason, it is important you understand how poker sites determine who paid how much rake in each hand and how poker rake is calculated at different poker sites.

These are the several popular methods for calculating rake contributions:

Dealt Rake

Dealt rake is by far the simplest poker rake structure, but it is also not a very fair one. This model tends to reward tight players more and those who play many hands less.

If a poker site enforces dealt rake, which few do these days, every player who is dealt hole cards will be assigned an equal amount of the rake in that hand.

This means that you can fold your cards, watch other players play a huge pot, and be assigned a portion of the rake paid in that hand.

This, in turn, will give you a certain amount of value through any bonuses or promotions you qualify for, even though you have not really played the hand.

This rake method was mostly abandoned some years ago as it was being exploited by many players who would play a very tight style at higher stakes and try to get as much rakeback as possible without contributing to the rake much.

Contributed Rake

Online poker rooms moved away from the dealt rake towards contributed rake to try and battle all the rakeback hunters who were plaguing their games.

This poker rake model only attributes rake to players who actively participated in the hand, which means they put at least some money into the pot.

However, this method is not completely fair either. The player who called the big blind and the one who called off an all-in are assigned the same percentage of the overall rake paid.

Contributed rake does not favor players who fold almost all their hands, but it can favor some loose players over others, depending on how willing they are to proceed to later streets.

Weighted Contributed Rake

Probably the purest form of poker rake ever invented, the weighted contributed model assigns rake by the amount of money each player puts into the pot.

If you contributed 50% of the pot, you would be attributed 50% of the rake paid in that hand. If you contributed 5%, you would be attributed 5% of the rake.

Online poker sites that use the weighted contributed rake model don't favor any type of play, as you get what you pay for and nothing more than that.

Hybrid Rake

The most recent of all poker rake models, the hybrid rake model, was invented to stop a big problem the poker industry was experiencing.

By and large, recreational players with limited poker skills make most deposits to online poker sites, but all of the money usually ends up in the pockets of skilled pros who make very few deposits.

This isn’t good for poker sites, which need the money to circulate. However, pro players also need the money to keep going around and recreational players to feel like they have a fighting chance.

Hybrid rake uses the usual weighted contributed model as its basis but also calculates the player's skill level into the formula.

The more erratic and unskilled a player plays, the more rake will be assigned to them and the more rakeback they will be entitled to.

This does not give unskilled players any advantage at the tables, but it does kick back more of the rake money to them, as opposed to the pros.

The pros benefit from the fish coming back to play more, possibly making more deposits, while the poker sites benefit from more liquidity and action.

At the end of the day, the hybrid poker rake model is a compromise of sorts that was needed to keep the games running on many online poker sites.

Rake Cap and Effects of Rake on Your Win Rate

While poker sites and live poker rooms take a percentage of the overall pot as a rake, there are still some limits to how much can be taken from every pot. This limit is called the rake cap.

In many live cash games, for example, the rake is capped at $5 or $10 per hand, depending on the level that’s being played. Similar rules exist in online games as well.

Both rake percentage and rake cap tend to favor the players at higher stakes tables, while low stakes players often pay a high percentage of rake with a high rake cap.

This means that moving up the stakes as quickly as possible is an absolute imperative, as low-stakes poker tends to be a money pit.

Many amazing professional poker players believe that micro stakes games online are nearly unbeatable, regardless of your skill level, simply because the rake is so high.

Of course, online poker sites also kick back some percentage of rake back to the players, but the higher you play, the more benefits you will get regarding rake.

As a poker player, you should be looking for the lowest possible rake percentage, the lowest possible rake cap, and the highest possible rakeback and bonuses to maximize your poker profits.

Progressive Jackpots in Poker

On top of taking the regular poker rake, some online and live poker rooms also charge a small percentage of every pot that goes towards a progressive jackpot. This jackpot is often paid to players who lose with a very big hand, such as four of a kind, in the form of a “bad beat jackpot” or to those who acquire a royal flush.

In either case, the number of players who actually win such jackpots is extremely small, while every single player at the site contributes to creating the jackpot prize pool.

As a general rule of thumb, you should avoid paying any unnecessary rake. Poker tables that charge extra rake for progressive jackpots are not the best place to be if you want to win money playing poker.

Instead, you should always look for tables with the lowest possible rake and no extra gimmicks, as this will allow you to win the most money from actual play and utilize your poker skills.

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