Online Poker Rake Explained: How Poker Rooms Make Money and What It Costs Players

Poker stands apart from every other casino game in one fundamental way: players compete against each other, not against the house. The poker room does not care who wins or loses any individual hand. Instead, it profits by taking a small fee from every pot or tournament—a charge known as rake. Understanding how rake works, how much it costs, and how it affects your long-term profitability is essential knowledge for any serious poker player. According to the American Gaming Association, poker revenue constitutes a significant portion of commercial casino earnings, and virtually all of that revenue comes from rake.

What Is Poker Rake?

Rake is the commission fee that a cardroom or online poker site collects as compensation for hosting the game. It is the primary—and in most cases the only—way poker rooms generate revenue from poker operations. Unlike blackjack, roulette, or slots where the casino profits from a built-in house edge, poker rooms have no stake in who wins. They simply provide the infrastructure (tables, dealers, software, security) and charge a fee for the service.

Rake exists in several forms depending on the game format and venue. Cash games typically use a percentage-based pot rake or timed collection. Tournaments charge an upfront fee. The method varies, but the principle remains constant: a portion of the money in play is diverted to the operator. The UK Gambling Commission requires licensed operators to clearly disclose their rake structures to players, though transparency standards vary by jurisdiction.

Cash Game Rake Structures

Cash games—also called ring games—are the most common format for rake collection. There are three primary rake models used in cash games, each with distinct characteristics that affect player costs differently.

Pot Rake (Percentage Method)

The most common rake method, used by virtually all online poker rooms and most live cardrooms, is the pot rake. The dealer (or software) takes a fixed percentage of the pot after each hand, up to a predetermined maximum cap. Typical structures include:

• Online micro-stakes ($0.01/$0.02 to $0.10/$0.25): 3.5–5% rake, capped at $0.50–$1.00
• Online low-stakes ($0.25/$0.50 to $0.50/$1.00): 4–5% rake, capped at $1.00–$2.00
• Online mid-stakes ($1/$2 to $2/$4): 4–5% rake, capped at $2.00–$3.00
• Online high-stakes ($5/$10 and above): 2.5–5% rake, capped at $3.00–$5.00
• Live cardrooms (all stakes): 5–10% rake, capped at $4.00–$7.00

The cap is critical because it limits the absolute amount taken from any single hand. In a $1/$2 online game with a 5% rake and $3 cap, a $200 pot would only have $3 raked (1.5%), not $10. This means the effective rake percentage decreases as pots grow larger, making the cap one of the most important factors when comparing poker room costs.

The "No Flop, No Drop" Rule

Most poker rooms follow the "no flop, no drop" (NFND) policy: if a hand ends before the flop is dealt—meaning everyone folds to a preflop raise—no rake is taken. This rule is standard at virtually all online poker rooms and at many live venues. NFND benefits tight-aggressive players who frequently win pots preflop. Some live cardrooms, however, take a rake from any pot that reaches a certain size regardless of the flop, so players should verify the house rules before sitting down.

Time Charge (Seat Rental)

Higher-stakes live games often use a time charge instead of pot rake. Players pay a fixed fee per half-hour or hour for their seat at the table. Typical time charges range from $6 to $15 per half hour depending on the stakes. Time charges are preferred by many experienced players because:

• The cost is fixed and predictable regardless of pot sizes
• Winning large pots does not incur additional rake
• The effective rake percentage decreases as you win more
• It removes any incentive for dealers to slow down the game

Time charges become more economical than pot rake at higher stakes. In a $5/$10 or $10/$20 game, a $12 per half-hour time charge is often cheaper than paying 5% of multiple large pots. Understanding this breakeven point is valuable for choosing the right game format.

Dead Drop

A less common method used in some live cardrooms is the dead drop, where the player on the button posts a fixed amount (typically $2–$5) that goes directly to the house before the hand is dealt. This amount is separate from the blinds and is not contested in the pot. Dead drops create a fixed, per-hand cost for the button position and are occasionally combined with a reduced pot rake.

Tournament Rake and Fee Structures

Tournament poker uses a fundamentally different rake model. Instead of taking money from individual pots, the operator charges an upfront fee as part of the buy-in. This fee is expressed in the "buy-in + fee" format. For example, a "$100+$10" tournament means $100 goes to the prize pool and $10 is the rake (10% of the buy-in).

Tournament Rake by Buy-In Level

Buy-In Range	Typical Rake %	Example
$1 – $5	10–20%	$1+$0.10 to $5+$0.50
$10 – $30	8–15%	$10+$1 to $30+$3
$50 – $200	5–10%	$100+$9 to $200+$15
$500+	2–5%	$500+$30 to $1000+$50

Low buy-in tournaments carry the highest effective rake percentage, which is one reason professional players tend to favor higher buy-in events. A $1+$0.20 micro-tournament takes 20% in rake, while a $500+$25 high-stakes event only takes 5%. This disparity means low-stakes tournament grinders must overcome a significantly larger rake burden to turn a profit.

Satellite and Re-Entry Rake Considerations

Satellite tournaments—where the prize is entry into a larger event rather than cash—often carry double rake. Players pay rake to enter the satellite, and then the target tournament also has its own rake built into the buy-in. Re-entry and rebuy tournaments can also increase total rake exposure because each re-entry requires paying the fee again. A player who re-enters a $50+$5 tournament three times pays $15 total in rake rather than $5.

How Rake Impacts Your Win Rate

Rake is the single biggest ongoing cost for a poker player, and understanding its impact on your expected value is crucial for evaluating your true profitability. In cash games, rake is often measured in big blinds per 100 hands (bb/100).

Calculating Your Rake Cost

Suppose you play $0.50/$1.00 No-Limit Hold'em online with a 5% rake capped at $2.50. The average pot at a typical 6-max table might be $15. With the 5% rake, the average rake per hand (including hands with no flop) works out to approximately $0.40–$0.70 per hand dealt. Over 100 hands, that translates to roughly $40–$70 in total rake from the table, or about $7–$12 per player at a 6-handed table. In big blind terms, that is approximately 7–12 bb/100.

Now consider that a strong winning player at these stakes might achieve a raw win rate (before rake) of 10–15 bb/100. After subtracting the rake cost, the net win rate drops to 3–8 bb/100. For break-even or marginal players, the rake difference between poker rooms can be the difference between a small profit and a loss. This is why rake comparison is so important, and why tools like a pot odds calculator should account for rake when estimating long-term profitability.

The Rake's Proportional Impact by Stakes

Rake has a disproportionate impact at lower stakes. At $0.01/$0.02 micro-stakes, where the cap might be $0.50, a single raked hand can represent 25 big blinds in a small pot. The effective rake rate at micro-stakes is often 8–15 bb/100 per player, which is higher than the win rate of most players at these levels. This mathematical reality means that the majority of micro-stakes players are net losers even if they play decent poker—the rake is simply too high relative to the stakes.

At higher stakes like $5/$10, where pots regularly hit the cap, the effective rake in bb/100 drops to 2–5 bb/100 per player. This lower proportional cost is one reason why mid- and high-stakes games are more "beatable" for skilled players. Research published by the UNLV International Gaming Institute has examined poker economics including the relationship between rake structures and player retention.

Rake Calculation Methods: Dealt vs. Contributed

When poker rooms track how much rake you have paid—important for rakeback and loyalty programs—they use one of two accounting methods:

Dealt Rake Method

Under the dealt method, the total rake from each hand is divided equally among all players who were dealt cards, regardless of whether they participated in the pot. If a $3 rake is taken from a 6-player table, each player is credited with $0.50 of rake. This method benefits tight players who fold frequently because they still receive rakeback credit even when not contributing to the pot.

Contributed Rake Method

Under the contributed method, rake credit is allocated proportionally to how much each player put into the pot. A player who contributed 40% of the pot receives 40% of the rake credit. Players who folded preflop receive zero credit. This method benefits loose, action-heavy players who see many flops and build large pots. Most major online poker rooms have shifted to the contributed method or a weighted contributed variant.

The choice between these methods significantly impacts which player types benefit most from rakeback programs. Tight grinders prefer dealt rake, while loose-aggressive players prefer contributed. Understanding your poker room's method helps you accurately calculate your true rakeback percentage.

Comparing Online vs. Live Poker Rake

The total cost of playing poker differs considerably between online and live settings, even when the stated rake percentages appear similar. Several factors create this divergence:

• Hand volume: Online tables deal 60–80 hands per hour (more with fast-fold formats like Zoom), while live tables deal 25–30 hands per hour. Higher hand volume means higher total rake paid per hour online.
• Cap differences: Online caps are generally lower ($1–$5) than live caps ($4–$7), partially offsetting the volume difference.
• Additional live fees: Many live cardrooms charge a "jackpot drop" of $1 per hand for bad beat jackpot funds, plus potential seat fees or promotional deductions.
• Multi-tabling: Online players who multi-table pay rake across all tables simultaneously, multiplying total cost. A player running four tables pays roughly four times the hourly rake of a single-table player.
• Tipping: Live poker players conventionally tip dealers $1–$2 per pot won, an additional cost that does not exist online. This can add $10–$25 per hour in effective costs.

When all costs are factored in, a live $1/$2 player might pay $15–$25 per hour in combined rake, tips, and jackpot drops. An online player at the same stakes on a single table pays $10–$18 per hour in rake alone, but without tips. The true cost comparison depends on the specific room, game speed, and local customs. The PokerNews industry publication regularly publishes rake comparisons across major poker platforms.

Rakeback: Getting Some of It Back

Rakeback programs return a portion of the rake you pay to the poker room. These programs are a central part of the poker economy and can meaningfully improve a player's bottom line. For a detailed breakdown of rebate mechanics, see our guide on cashback and rakeback programs.

Types of Rakeback Programs

• Flat rakeback: A fixed percentage (typically 20–40%) returned regardless of volume. Increasingly rare at major sites but still available at some smaller rooms.
• Tiered VIP programs: Rakeback percentage increases with monthly volume. Entry-level tiers may return 10–15%, while top tiers can reach 40–60%. These systems reward high-volume grinders.
• Points-based systems: Players earn loyalty points based on rake paid, redeemable for cash, tournament entries, or merchandise. The effective rakeback depends on the conversion rate and redemption choices.
• Monthly challenges and promotions: Some rooms offer additional rake rebates through leaderboard races, missions, or milestone bonuses layered on top of base rakeback.

How Rakeback Transforms Win Rates

Consider a player paying 8 bb/100 in rake with a 30% rakeback deal. That player effectively gets 2.4 bb/100 returned, reducing net rake cost to 5.6 bb/100. For a break-even player before rakeback, this turns a losing proposition into a marginally profitable one. For a winning player at 5 bb/100 net (before rakeback), adding 2.4 bb/100 in rakeback boosts the win rate to 7.4 bb/100—a 48% increase in earnings. This is why rakeback is considered essential for professional grinders, particularly at stakes where margins are thin.

Rake's Role in the Poker Ecosystem

Rake is not merely a cost—it is the economic engine that makes poker games possible. Without rake, there would be no dealers, no software development, no tournament organizations, and no player liquidity guarantees. Understanding rake's role in the broader ecosystem helps players make informed decisions about where and how to play.

How Poker Rooms Allocate Rake Revenue

A typical online poker room allocates its rake revenue roughly as follows: 30–40% returns to players through rakeback and promotions; 20–30% covers software development, server infrastructure, and payment processing; 15–25% goes to regulatory compliance, licensing fees, and responsible gambling programs; and 10–20% constitutes operating profit. This breakdown explains why effective rakeback rarely exceeds 50%—the operator needs the remainder to sustain operations. Regulatory bodies like the BeGambleAware service work with operators to ensure that a portion of gambling revenue supports player protection initiatives.

Rake and Game Ecosystem Health

Excessive rake can damage a poker ecosystem over time. When rake is too high, winning players extract money from losing players, and the rake extracts money from both. Eventually, losing players go broke and leave, recreational player pools shrink, and games become tougher. This "rake death spiral" has affected several online poker rooms throughout the industry's history. Conversely, competitive rake structures attract more players, maintain softer games, and create a healthier long-term ecosystem. As a player, choosing rooms with reasonable rake structures benefits not just your bottom line but the sustainability of the games you play.

Strategies for Minimizing Rake Impact

While you cannot avoid rake entirely, there are practical strategies to minimize its impact on your bankroll:

1. Choose rooms with lower caps: A $2 cap versus $3 cap at the same stakes can save hundreds of dollars per month for regular players. Compare rake structures before committing to a platform.
2. Maximize rakeback: Ensure you are enrolled in the best available rakeback or loyalty program. Consolidate your play to one or two sites to reach higher VIP tiers rather than spreading volume across many rooms.
3. Play appropriate stakes: At stakes where the rake cap is a large percentage of the average pot, consider moving up to where the cap represents a smaller proportion. The effective rake rate at $1/$2 is meaningfully lower than at $0.10/$0.25.
4. Prefer full-ring to short-handed: In games where rake is charged per hand, full-ring tables (9 players) mean each individual pays less rake per hand than at 6-max tables with the same cap, because more players share each raked pot.
5. Win pots preflop when possible: Under the NFND rule, winning preflop costs zero rake. A tight-aggressive style that wins many small pots before the flop minimizes your total rake contribution.
6. Choose higher buy-in tournaments: If your bankroll supports it, higher buy-in tournaments have lower rake percentages. A $100+$9 tournament (9% rake) is more efficient than five $20+$2 tournaments (10% rake each).

Rake in Different Poker Variants

While Texas Hold'em dominates the poker landscape, other variants have their own rake considerations:

• Pot-Limit Omaha (PLO): PLO generates larger average pots than Hold'em at the same stakes, meaning the rake cap is hit more frequently. The effective rake per hand is often higher in PLO, but the effective rate (as a percentage of money in play) can be lower because pots regularly exceed the cap.
• Sit & Go tournaments: Standard Sit & Gos typically charge 7–10% rake. Hyper-turbo formats may have slightly lower rake to compensate for the compressed structure. Heads-up Sit & Gos can have 5–7% rake.
• Fast-fold poker (Zoom, Rush, Snap): These games use the same rake structure as standard cash games but deal 2–3 times more hands per hour, significantly increasing hourly rake cost. The trade-off is more hands of experience and potentially higher hourly win rates for skilled players.
• Mixed games: Games like HORSE or 8-game mix typically use the same rake structure as the table's stakes, regardless of which variant is currently being dealt.

Common Poker Rake Myths

Several misconceptions about rake persist among poker players. Just as there are widespread casino myths and gambling fallacies, poker rake has its own set of misunderstandings:

• "Rake doesn't affect winning players." False. Rake reduces every player's expected return. A player who would win 10 bb/100 in a rake-free environment might only win 3 bb/100 after rake. Rake does not differentiate between winning and losing players.
• "Online poker is rigged to generate more rake." This conspiracy theory has been thoroughly debunked. Online poker rooms profit from volume, not from manipulating outcomes. Dealing more raked hands to more players is far more profitable than any rigging scheme, which would risk their license and reputation. Regulated sites undergo RNG auditing by independent testing labs.
• "Low-stakes games have less rake." In absolute terms, yes. In proportional terms, the opposite is true. Low-stakes games have the highest effective rake as a percentage of the money in play, making them the hardest games to beat relative to stakes.
• "Rakeback makes you a winning player." Rakeback improves your bottom line but cannot transform a significant loser into a winner. If you are losing 15 bb/100 before rakeback, a 30% rakeback program returning 3 bb/100 still leaves you at -12 bb/100.

Frequently Asked Questions