How Do Poker Rooms Make Money?

If you are an experienced poker player, then you probably already know that, unlike casino games, poker rooms can’t make money if you lose a bet. In poker, you are playing against the players, and the money you win is their money. The poker room, be it physical or online, doesn’t make money from the players who lose the games, no matter how much they lose.

So, if that’s the case, how do they make their money? After all, they have to bring in profits, rights? They are not going to offer their services for free, that’s for sure. But if they can’t make their earnings from a house edge, how can they?

How Poker Rooms Usually Make A Profit

Well, the answer to this question has multiple answers. However, I’ve done the research for you, and in this piece, you’ll learn about all the ways poker rooms use to make their cash. Let’s take a look!

# The Rake

The rake is just a term used to signify the fee the online casino or physical poker room takes as payment for facilitating the poker game. It’s the most typical way of making a profit for offering the game. All players must pay up. Still, it’s usually a small fee, not something that can influence your overall bankroll.

The rake can come in two different forms: the ‘pot rake’ and ‘time collection’.

The pot rake is a percentage of the overall pot. This is the most popular method poker rooms use to make money, and its size depends on the pot’s size from each poker hand.

Naturally, the percentage here is usually very low, somewhere between 2.5% and 10%. The casinos earn a lot thanks to the sheer number of pot rakes, not the size of each.

Alternatively, poker rooms can also take a fixed amount before the hand begins. Both methods usually amount to the same thing, more or less.

The pot rake has existed for a long time in physical poker rooms, but you can find it today in many online casinos that offer poker games as well.

On the other hand, in many high limit poker games, the casino will usually use the time collection method instead of the pot rake.

The method is simple, and in most cases, the poker room will take an amount for every half an hour of playtime. This means that they will either take the money from the pot or all the players together.

As you might expect, many players don’t appreciate losing part of their pot to the casino, which is why many online casinos have opted for charging monthly membership fees or deposit fees instead, mostly to high-rollers.

If you want to know what the site you’re using does, you will need to read the fine print or ask customer support about the type of rake the poker room uses.

# No Rake or Commission

This might sound counterintuitive, but some online casinos that offer numerous games besides poker might opt for charging nothing. There is no rake and no commission fee. You can play poker for free, or, more precisely, just with the money you want to invest in the game itself.

These casinos tend to use poker as a gateway for getting the players to use the rest of the site. In other words, they give you the chance of playing poker for free and hope you’ll start spending money on other games they offer — the games that have a house edge from which the casino typically earns its money.

# Tournament Fees

If the casino offers poker tournaments, they will usually charge every player a small fee to enter it. It’s a great way to cover the rewards they’ll give to the players who rank the highest.

This has become a very common practice in online casinos, and it has always been present in physical poker rooms.

The high stakes real life tournaments have very high entrance fees, but poker sites only require a small fee, $10 or $20, for instance.

In most cases, you’ll see the tournament buy-in price displayed as, let’s say, $100+$20, with the smaller amount being the actual fee the house takes.

# Side Bets

A smaller and less common way some poker rooms use to make money is the side bet feature. Namely, they offer players the chance to place side bets, in addition to placing the regular ones that are part of every poker game.

The main point of these side bets is that you’re not betting against the players but against the house. The odds are typically in favor of the poker room, so winning one is not very easy. Naturally, if you don’t win, the money you’ve placed as a stake goes to the casino.

# Indirect Earnings and Other Income

As most casinos — especially the online ones — offer a wide range of services in addition to the poker rooms, they have other ways of making money. For instance, they profit from deposit or withdrawal fees.

However, most great casinos stick to more indirect ways of earning. They use the house edge in most games to get part of the money you wage, so no matter how much you win, at a macro-level, the casino always makes a sizable profit from all the players combined.

That’s precisely why online casinos have enticing bonuses and all sorts of rewards, and all they ask from you is to play the games they offer.

What’s more, many online casinos offer different poker variants, and in many of them, you’re playing against the house. Consequently, the casino wins all the money you lose.

Online vs. Land-Based Poker Rooms — Do They Make Money in Different Ways?

Both online and land-based poker rooms and casinos earn money from poker games and tournaments, but they often do it in slightly different ways. For instance, land-based casinos and poker rooms usually impose fixed fees or go for the timed fee collection model.

While the first option is self-explanatory, the latter requires some clarification; namely, players are asked to pay a fixed fee determined by how much time they spend playing poker. There’s also a rake model called “dead drops“, where ante bets (small or big blinds) are paid to the casino rather than going to the pot.

Online poker rooms, on the other hand, often go for more complex models, such as dealt rake. With the dealt rake model in play, all the players who receive cards from the dealer have to pay rake.

There’s also weighted contributed rake. This is considered one of the best models used in online poker rooms, as it requires players to pay rake only for the percentage of the pot they contribute to. To get a better idea of how this works, here’s an example:

• You’re the big blind for $10 at an online poker room that charges a 5% weighted contributed rake, but you fold pre-flop, leaving two other players to go heads up.
• The two players see the flop and raise it to $100 throughout the round.

In this situation, you’re only responsible for 10% of the pot, which means you should pay $0.50 based on the 5% rake in addition to paying the big blind.

The Bottom Line

There you go — all the ways online and physical poker rooms use to earn money.

As you can see, it’s clear that every casino will always have a way of making a profit, even if the players are betting against other players and not the house. However, most of these methods are ok if you ask me, and I’m sure you are fine with them as well, as the casino has to make money somehow.

The key for you is to avoid the casinos that want to take too much money from you and stay  loyal to the ones that reward you with bonuses and low fees.