Whether you’re winning or losing at the tables the poker room always makes a profit
In the poker game of life, women are the rake.’ This pearl of wisdom is courtesy of Ed Norton’s character Worm in the cult poker movie Rounders. The fact that Matt Damon’s Mike McDermott answers with a ‘What the f??? are you talkin’ about’ is neither here nor there – it remains a smashing quote, and one that makes far more sense once you understand how rake works.
Put simply, the rake is a ‘service fee’ imposed by a poker site or casino if you want to play the glorious game in their ‘house’. Every pot has a specific percentage surreptitiously removed before the bulk of the chips are pushed back across the baize to the winning player. On the internet this act is almost undetectable (hover your cursor over the correct pixel and you might just uncover the truth). In a cardroom a magical trapdoor is activated by the dealer’s side, dropping the ‘stolen’ chips into a dirty black box under the table with a near-imperceptible ‘Yoink!’
Had you visited Las Vegas in the early noughties, finding a poker room would have been far harder than it is today. In the last decade we’ve seen the super casinos remove poker rooms and then – in light of Chris Moneymaker and the poker boom – reinstate them pronto to respond to player demand.
The reason for this original apathy towards the game is simple – casinos don’t make as much money from a poker room as they do from a bank of slot machines. Elsewhere in a casino, should the players in spots one and two of a blackjack table win, it’s not a problem, because the casino uses the money from the losers in spots three through six to 1) pay the unlikely winners, and 2) still make a grotesque profit day in, day out.
But with the game of poker, the casino (or online poker room) just has X amount of humans who want to play against each other. The house has no edge – it just has to stand, drooling over players’ shoulders while vast sums of money move tantalisingly around the tables. And thus the idea of rake was born, ensuring that even when you win – to a lesser degree – you still lose. Is Worm’s quote starting to make sense now?
The cut
In its simplest form, the rake takes around five percent of the total value of the pot in a cash game and slips it into the poker room’s pocket. There will be a set maximum rake per pot, so if you’re playing a six-max game on PokerStars you can expect five cents for every $1 in the pot to disappear into the virtual vaults of the site, but only up to a maximum of $3 per pot. Obviously the fees taken for tournaments are generally more transparent (appearing in the lobby as $100 + $10) and represent anything from 10-20% of the buy-in amount.
For limit players the rake is more directly linked with the amount in the pot. This is where ‘shopping around’ can make a big difference. If, for instance, you frequently play limit Hold’em at $0.25/$0.50 then UltimateBet offers better value than PartyPoker. Why? Well, because UB takes $0.05 for every $1 in the pot, but only up to a maximum of $0.60.
PartyPoker will also take $0.05 for every $1 in the pot, but up to a maximum of $1. This means that at a lively table that likes to create juicy pots, an additional $0.40 of value is being extracted on Party compared to an identical situation on UltimateBet. Over time these amounts add up, and it’s a great illustration of how important not only game selection is, but also the site you play at taking into consideration your preferred game limits.
Rakeback
Armed with the information above it doesn’t take a maths genius to realise that 30,000 punters simultaneously playing at one poker room are cumulatively providing a massive amount of revenue in rake for the company concerned. Obviously, the sites would rather have 30,000 players sitting at $250/$500 tables than $0.10/$0.20 tables, but it all adds up, meaning that player acquisition is the number one goal for all the marketing people working within the industry.
With so much in the way of choice for the consumer, Full Tilt only wants you playing on Full Tilt, Betfair only wants you playing on Betfair, and so on. At a very superficial level these companies try to appeal to punters on a number of levels. Endorsements from popular poker stars and media celebrities is one lure, another is juicy freerolls and ‘exclusive’ tournaments for regular players.
However, as the punters have become more savvy – not to mention more aware of how important their business is to the companies – one reward system stands head and shoulders above the rest: rakeback. Because other switched-on people realise just how much poker sites need paying customers, an entire sub- industry of affiliates and brokers has come into existence. These people are dedicated to the task of getting you – the poker enthusiast – to sign up to the big sites in return for decent rakeback deals. So just how does rakeback work?
Put simply, rakeback is a percentage of the rake you’ve generated that comes back to you. Depending upon the rakeback deal you’ve secured for yourself, you can very simply calculate what that return might be using the information we’ve already established. In order to do that, multiply the rake (5%) by the average size pot you get involved in, then multiply that by the number of raked hands played, and divide by the number of players at that table.
This figure should be your approximate rake. You can then apply the percentage you are receiving in rakeback to work out what you should see coming back into your account.
For example, say you play 1,000 hands with six players in a $0.25/$0.50 game. This creates rake of approximately $83 for the site and, because you have a rakeback deal with that site for 30%, you get $25 back into your account at the end of the month. Not bad, eh? But if you were playing at a $2/$4 NLHE table, you’d now be raking $333 for the site, which means your 30% deal harvests $100 in rakeback.
If you previously thought rakeback was just for high-rollers (and, indeed, those players that play at the nosebleed levels are constantly being pursued by poker sites’ VIP player managers and marketing vultures) then perhaps now is the time to look at just how much money your hobby makes for these extremely wealthy companies, and ask for something in return.
Great deals
Companies such as rakebrain. com, raketherake.com, rakeback.com and rakeme back.com are just a few of the brokers out there offering deals with the biggest sites on the web – and that’s just the tip of the iceberg. Put ‘rakeback’ into Google and prepare to be amazed at how many operators there are.
Remembering that one of the key functions of rakeback is to keep you playing in one poker room, the rakeback deals can actually be organic creatures, growing and improving the more you play. If you set up a rakeback deal (via one of the many brokers) with Betfair, why would you want to play on any other site?
Surely you’d just be diluting the rakeback you’re accumulating…? With this thought in mind, what can make these situations even more profitable is that the more you play on, say, Betfair, the more player points you accrue, which elevates you to a greater ‘VIP’ status where you get more than your initial 30% rakeback. It’s an extreme example, but if you ever found yourself raking $15,000+ for the site, you’d start receiving 37% in rakeback.
These numbers might seem pie in the sky to the casual player, but for those enthusiasts that have gone pro or semi-pro these numbers can make an enormous difference to their profitability. You might have a crazy day – up a thousand dollars one minute, down a thousand dollars the next, and ultimately ending up even – but while you’ve been playing, the rake has been ticking away in the background, making you and the poker site money regardless of whether your session was good or bad. And that’s a +EV move whichever way you look at it.
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