Poker players in a casino have the odds of winning high-stakes games and even making away with thousands of dollars. This begs the question – how do casinos make money off poker? It seems like the money flowing out of casinos is larger than the income. Is that so? Here is a description of how casinos profit off poker games.
Does poker have a house edge?
Most casino games are guaranteed to generate profit for the casino by an in-built advantage called the house edge. Even online casino games have a house edge which guarantees profitability in the long run. The games with this advantage towards casinos include baccarat, roulette, and slots.
This is because players are playing against the casino. With poker, things are different because players are competing against each other. Therefore, it seems like the casino is not making any profit from poker games hosted on their property or website.
What is a rake fee?
The main profit stream for both the online gambling market and physical casinos when it comes to poker is the rake fee. All casinos implement a rake fee which is a percentage of the wagers on the table.
A rake fee ranges from 3% to 5%, depending on the stakes of each game. Higher stakes games tend to have a lower rake fee and vice versa. The online casino industry 2022 combined the profits from rake fees with revenue generated on ad campaigns being hosted on digital casino websites.
Rake fee differences
A rake fee differs by percentage and also by either being capped or not. For example, a rake for a certain game could be 5% with a cap of $10. That means that the rake of that game will be 5% unless it exceeds $10.
In that case, the casino will take just the $10 as the rake fee. This is useful in high-stakes games since players can pay more rake fees if they wager higher bets.
Another type of rake fee is designed for tournaments. Since the coins are not worth any money in a tournament, getting rake fee payments is impossible. To make poker tournaments profitable for casinos, a tournament rake fee was introduced to gamblers.
This is a fee that is payable upfront before joining a tournament. It is a fixed price to get through the door and get a seat at the table. Tournament rakes are usually high, depending on the prize gamblers are competing for.