A Look at How Poker Rooms Rake in Profits

Q: How Do Poker Rooms Make Money?

A: If you are new to the game of poker, you might have the following question:

How do poker rooms make money?

Rake is how poker rooms make their money for the service that they provide.Poker rooms make money via "rake", which is when they essentially charge a fee to play a hand of a "cash game" or to enter a tournament.

Let's start with tournaments.

Let's say that your favourite online poker room is hosting a $100,000 guaranteed tournament with a buy-in of $109.

Of this $109, $100 will go into the prize pool, while the poker room will keep the other $9 as their "fee".

So, this $9 per entry that is collected will end up being their profit for the event.

This is the same structure for "Sit and Go's" - if you pay $33 to enter a SNG, $30 will likely go into the prize pool, while the poker room will keep the additional $3 as their fee.


Cash games are a bit more variable in terms of how the poker room makes their money.

Most online poker rooms will simply charge a fixed percentage per hand, with a cap based on the number of players.

Let's say that you are playing $2/$4 No Limit Hold'em on Pokerstars.

Based on their current rake structure, the % rake for the hand would be 5.0%. If there are 4 or less players at the table, the rake would be capped at $1.50.

If there are five or more players at the table, the rake would be capped at $3.00.

So, this is the money that Pokerstars would make in exchange for hosting the cash game on their site.

The percentage of rake charged will generally increase with higher stakes, up to a maximum, usually of 5%.

The percentage of rake will vary depending on the type of game (Fixed Limit vs No Limit, for instance) and the stakes. Rake usually ranges from 2% up to 5%, depending on the type of game and the stakes.


Traditional "brick and mortar" casinos will supplement their income by charging high prices for drinks, food, etc.

Online casinos will sometimes supplement their income by hosting "live" events. partypoker, for instance, hosts numerous live tournaments throughout the year.

In addition, some online poker rooms will license out their technology to casinos (we have seen this in some US markets). Online poker software is terribly expensive to develop, so many casinos will simply license out the software and run their own branded sites using the licensed software.

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