How Does The House Make Money In Poker

Did you know that large casinos in Las Vegas reported total revenues over $22 billion in 2019, with their aggregate net income reaching close to $2 billion? Let's face the facts: casinos are in business and make a fortune by offering gambling games to their customers. Whether you are playing blackjack, roulette, slot machines, or baccarat, every single game has an in-built advantage for the house edge, boosting their bottom line quite a bit.

The house edge revolves around a few percentage points. What's more, these points differ from one casino game to the other and guarantees quite a considerable amount of money over a long period. The house is capable of making around $30 for every $1,000 wagered on slots or roulette. It's a business of small marginals, but don't be fooled by them: Over time, they make up huge profits for the casino owners.

Even so, when it comes to the game of poker, there is no house edge at poker rooms. Players compete against each other, and you might even get a sign-up bonus or a rakeback deal by playing. Although it might look like all their games are offered for the good of their hearts, there is much more than what meets the eye. After all, casinos must always make a profit.

Regardless, how do casinos make money on poker? Let's take a look into everything you need to know about how poker rooms operate their business to turn a profit:

Making Money From Poker Rooms

Casinos make a lot of money from a poker room and all the cash games they offer. Let's take a look at how this happens:

1. Rake

Rake is the charge or fee taken from casinos in poker to make profits from providing the game. Cash game rake is divided into two major categories; pot rake or time collection. Other fee types include dead drop, fixed fees, tournament fee, and fixed fees.

Here is a detailed insight into these categories:

Pot Rake

This is the most common method where casinos make a lot of money from players in poker rooms. It integrates a scaled commission fee from each cash game pot.

The amount of fee taken from each is generally between 2.5 and 10% of the pot up to a certain predetermined amount. Although there are other non-percentage rake methods that a casino can use to take the rake, pot rake is the most preferred method due to its ability to cover the costs effectively.

Time Collection

As its name suggests, time collection is a time-based collection. It is collected

every half an hour in two ways:

Time pot rake: A set amount that is collected from the first pot

Player time rake: The amount collected from each player

The main reason why the majority of punters prefer a pot rake is because of its ability always to remain relative. As a result, players don't feel like they are paying more for the time they are in the seat. Skilled professional poker players usually prefer time collection over pot rake, as they can play more hands against the amateurs to further increase their statistical edge.

2. Dead Drop

How do casinos make money on poker rake? This is yet another method for brick-and-mortar casinos to make money. The only difference with this type of poker rake is that the player at the bottom pays before the hand begins. What's more, the amount of dead drop rake a player is charged should be relative to the stakes on the table.

Another fantastic feature in dead drop rake is that it rotates after every hand, thereby creating a sense of parity between those enjoying the game. However, you should also note that, regardless of the money they make, they must pay roughly the same amount.

3. Fixed Fees

The main reason casinos introduced fixed fees is that pot rake is not the best option if you play a high stake poker. Technically, not all players are comfortable paying a large part of the pot every time they scoop a win. This option helps players escape from this dilemma by the casino collecting a fair rake after each hand.

Alternatively, Casinos collect a set sum after each round, instead of letting the dealer determine each pot's cost, which varies a lot. Without compromising the profits that casinos make, it makes the collection more acceptable for high-stakes players.

4. Tournament Fee

Taking a fixed fee is the standard way for an online poker room to make money by offering poker tournaments. Since online casinos are expected to publish the fee when accepting entries, it is simpler to understand for players as well.

The average tournament fee rate is equal to 10 percent of the buy-in. However, you should also note that some poker sites might decrease the percentage of the fee depending on the buy-in.

Tournament buy-ins, along with the platform's maintenance and security, cover all the costs of running a tournament. The money that casinos hold for profit are also included in the tournament fees, but some poker sites charge this fee on top of the commission they take from the prize pot.

How Casinos Play Their 'Game' with a Poker Player

How Shady Poker Rooms Play Their 'Game' with a Poker Player

So, the main question remains: How do casinos make money? Is making money on poker that easy? While licensed casinos make much more money on their other table games than poker, there are shady operators that might rip you in other ways.

Well, many casino enthusiasts have always been fascinated by how easy you can meander through both legal and illegal games and still emerge as a victor.

Now, suppose you are visiting abroad and are welcomed to a poker room run by a local casino without doing a little research on that country, its laws, and reputation. In that case, you'll be walking into a trap designed to snare unwary aliens.

Casinos that are illegal and uncontrolled can look surprisingly convincing. However, once inside, you might just as easily be in a garage on the outskirts of town as many victims are already "in their cups" before being given the opportunity to play by a local roper (a con artist tasked with attracting potential marks to a crooked game or scenario).

These facilities are often card rooms and maybe one or two cash game tables stuffed into a garage or apartment, but it has also been regarded that very casino-like interiors and exteriors rely primarily on outside the law, and although they look and feel like a miniature version of Las Vegas or Macau.

Here are some common ways to cheat in poker besides utilizing poker rake:

Marking Cards

Marking cards is also one of the most common strategies used by fraudulent players to cheat at a poker table. This technique is peculiar to poker played at land-based casinos since it is impossible to mark cards when playing online poker. Players attempt to mark the cards in many ways. Some of the marking techniques include tinting, cut-out, block-out, and shading.

These processes for labeling cards include adjusting the size or look of the cards that will be used for dealing a poker hand. Card marking has been a widespread cheating technique for a long time, but once casinos realized what was going on, they instituted steps that stopped players from playing with the same cards over and over again.

This technique is not only used in poker, as players still use this technique to cheat in other card games like Blackjack and others.

Bottom Deck Dealing

The so-called "bottom deck" deals are another type of poker cheating that you are likely to encounter in private games. The strategy is based on a collaboration of the dealer and one or more of the players.

During the shuffling process, the dealer, who needs to be reasonably competent with handling cards to pull this off, may set the deck in such a way that specific cards can be handled from the bottom of the deck.

Just imagine you're holding a top set on a flop that presents a flush draw. You bet high, and your opponent calls. The turn is blank, and to cover your hand and give them the wrong odds to pursue, you shoot another big bet again. To your surprise, your opponent raises here. You think for a second before going all-in.

Your opponent ponders their decision over for a while, but it's only a theater that's going on. Eventually, they announce the call, and the river fills the flush for your opponent. While this might have been pure luck, with bottom deck dealing, it's a sequence that was put in place on purpose. Your opponent knew the river card would be the one of the cards completing their flush draw.

Deck Rigging

Rigged deck or cold deck is one of the most common techniques in poker and in other card casino games, as this cheating technique is known in the world of poker. Since they are the only one who has access to the deck of cards, this cheating strategy involved dealers. This technique needs a lot of expertise because it is easy to discover cold or rigged decks and because of that, this cheating strategy is not used as often these days as it was in the past.

When it comes to this cheating process, it needs to be said that very strong hands will be allocated to both the winning and the losing players, resulting in huge pots with a lot of raising occurring on different streets. For cheaters, this situation means that they will have a better hand over other players at the end with 100% certainty.

This method of cheating is closely related to the method of card marking, as rigging the deck also means marking cards in a certain way to give advantage to certain players in the game. That's not the only way dealers can rig the decks, though, as they also shuffle cards in a way that seems legal, but they actually have much better odds of winning for some players.

This technique is easily observable at land-based casinos and is no longer used for that purpose. In underground poker games, however, players have very little chance of noticing rigged decks, and because of that, they need to be aware of all the dealer is doing.

Collusion with Dealer

Dealers are the weakest link in the poker gaming process for many poker players. They may also be under the control of the players in underground poker games or unofficial poker games or work together with other players to rig. Just as it was the case with colluding with buddies, colluding with dealers will bring a lot of profit to those players in the poker game.

Dealers might bring up some rules in certain instances that would favor certain players in the game while harming other players. Besides, given that the dealer deals with the cards, it is very likely that they can rig the deck to benefit certain players. Alternatively, they may remain silent during the game if a particular player cheats.

Switching Cards

One of the oldest cheating strategies that helps casinos make money is flipping cards. In fact, the term I have an ace up my sleeve is a result of this cheating strategy since players will sometimes turn their cards to deal with aces they would hide during the game in certain areas.

This cheating method has become so popular and so successful in many instances that it has left a massive mark on popular culture. The underlying principle of this technique of cheating is relatively straightforward. All a player has to do is carry their own cards to the poker game and turn them to strengthen their hands during the game.

However, this cheating technique takes a lot of expertise and patience, even though it sounds relatively straightforward. Switching cards has become very popular, and players have become accustomed to this strategy, signaling that a player is about to switch cards even with the hand's slight movement.

How Much Do Casinos Rake in Poker: No-Limit Hold'em, Pot-Limit Omaha & Others

So, how is a poker rake taken from a game? There are a couple of answers to this question.

Firstly, there's always a maximum amount of money that can be taken from any given pot. Yet, even with a small fixed percentage from each pot, the huge amount of hands played ensures that casinos bag in the cash at the end of the day.

Secondly, if you are playing live, when your poker hand is being played, the dealer would literally take the chips out of the bag. These chips will be put in a lockbox aside and then later placed in the take. Online, the app can only automatically take care of this by hand, always notifying players when it is done.

You'll see another form of rake, called a deep drop, in a few odd circumstances used at some casinos offering no-limit hold'em. This happens when, before cards are dealt, a player with the dealer button has to throw in the commission. With that, every player will be hit, and the house will continue to take a cut as the game continues.

Verdict: How Do Casinos Make Money on Poker?

Well, the answer is relatively straightforward. Casinos make money by taking a rake from every pot played at the poker tables. However, suppose you want to gather a lucrative amount of money within a short period of time. In that case, you should try out poker: It's the only casino game where you can outsmart your opponents and overcome the house edge by a big margin!

Make sure you put all the factors presented in this article into consideration when you play poker, whether at your local casino or online. By carefully choosing where to play, your chances of making money in poker improve dramatically. Online poker rooms can reward you hugely, but remember the casinos are also there to get their share of the cake!

Casinos Making Money from Poker FAQ

How do casinos spend the money from collected rake?

Casinos spend the collected rake on utilities, staff salaries, gaming licenses, and other operating expenses. Some casinos have VIP programs that reward players with cashback or loyalty bonuses for their rake.

What fees casinos charge from Texas Hold'em players?

Casinos can charge time collection such as $5/half an hour or a fixed amount like 5% per hand in Texas Hold'em cash games. In Hold'em tournaments, casinos take a fixed fee from each buy-in. For example, if the tournament entry fee is $1050, the house fee might be $50 while $1000 goes to the prize pool.

Do casinos have a house edge in poker?

Technically no. Instead of having a house edge like in roulette or other table games, casinos make money from poker by taking a percentage of each cash game pot played or each tournament buy-in spent by the players.

Which are more expensive for the players, cash games or tournaments?

It depends on the stakes. In a high stakes cash game, players might rake hundreds of dollars per session. On the other hand, if you play a major live tournament and bust in the first hour, you've paid a fee to participate for what was a very short session.

Author

Johannes Turunen

Johannes is the Editor in Chief at Beasts Of Poker and is an expert in both live & online poker. Johannes played online poker semi-professionally for 5 years while completing his Master's Degree in Technology.