What You Need to Know About Rake
As a moderately successful player, I find it astonishing the number of poker players that just don’t understand the rake in the poker room. The rake in most poker jurisdictions is the casino’s method for trying to make a profit.
It’s understandable, there has to be money from somewhere to pay for the lights, the staff, and hopefully have enough left over for the shareholders. Plus, a portion usually goes to that jurisdiction’s government in the form of taxes. In some jurisdictions, a portion of the rake must be allocated to a specific charity. Most notably: Alberta — I think B.C. and other Canadian provinces also mandate the charity. In tournament play, a portion may also be allocated as a stipend for the house staff. All of this can add up to pricey amount for the privilege to play poker. Strike the word “privilege”. The casinos should feel privileged that we as customers step through their doors. We’re customers, they should feel privileged that we chose them, but that’s a different story for a different day. The rake should also be considered a part of customer service.
The numbers I use apply to the province of Alberta. They can vary substantially in other jurisdictions. Don’t be afraid to ask any pit boss or manager what their rake is. If they can’t answer, I guess they just don’t want your business.
Poker lives in two different worlds. There’s the cash game world and there’s the tournament world. The rake is different in these worlds and I will attempt to explain them.
Cash Game Rake
The rake is pretty straight forward. It’s one of two things: a percentage of the pot to a maximum amount, or a “time rake”. A time rake involves charging players a certain amount for each hour or half hour they play. I won’t deal much with the time rake because I have never played in that situation — it’s usually used in higher stake games. I drive a nine-year-old Rio; do I look like a millionaire?
In Alberta, the rake is a straight 5% of the pot to a maximum of $5 in any cash game, regardless of the blinds. This is done in 50-cent increments. Also the “no Flop, no rake” rule applies in some casinos. There is no rake if everyone folds preflop, which is a huge plus for the players. Obviously, you’re going to reach the maximum of $5 more often in a $2/$5 or higher-stake game than you are in a $1/$2 game.
A casino employee recently told me that the cash game rake averages about $90 an hour. That’s under the favourable Alberta rules — favourable being relative to other jurisdictions. The cash game rake in Vegas varies. It used to be 10% to a maximum of $4. Last time I was there some casinos were charging 10%, maximum $5 per pot, with a preflop rake. All three of those add substantially to the overall rake. In Vegas, I try to avoid casinos that charge a preflop rake. If enough players do, maybe we can get the casinos competing for our business.
Most people understand and accept the cash game rake. But did you also know in Alberta that when there are six or less players dealt in for the hand the maximum rake is $3 regardless of pot size? I’ve caught many a dealer accidentally raking $5 in a six-handed game. Multiply that by 20-25 hands an hour and $40 or so is off your table and out of all the players' pockets. Be aware of this and point it out if they rake more than $3 in a six-handed game. It’s your money. I’m not sure what the rule is on this in other jurisdictions, but again, don’t be afraid to ask.
A lot of casinos offer a form of rake back in the cash game. In Vegas, this is usually in the form of comps at the rate of $1 to $5 an hour. If you’ve been playing more than a couple of hours, ask, and you just might get a free meal. In Calgary, there’s a casino that gives you a $10 food voucher after two hours of play. It’s your money, take advantage of the freebies; they are a way of putting money in your pocket. Isn’t that the goal?
This rake is a whole different world. And by that I mean it is crazy how it works, and how some casinos try to justify a high rake. The total rake can vary from as little as next-to-nothing to as high as 40% of your buy-in.
All jurisdictions have some or all of the following formula applied to the tournament rake:
- The Buy-In: the amount going to the gross pool.
- The Plus Portion: this amount is kept by the casino and usually shared with the government. In Alberta, the casino gets 75% of this portion while the Alberta government rakes the other 25%.
The above two apply in all jurisdictions. Once you take out the plus portion you are left with the gross pool. If nothing else is taken out, the gross pool” becomes the player pool and this pool is divided among the winning players. Most jurisdictions also take out some or all of the following side rakes:
Add-On Dealer Tip: this is usually in the form “x number of chips for y dollars.” I include this in the rake as it is a portion of your buy-in that does not go in to the gross pool.
- Stipend: a lot of casinos take out 1% to 3% of the gross pool for a stipend to the house staff. I’m not a big fan of mandatory tipping in any industry, but I don’t have a problem with this unless you do it without telling me. If you’re raking it, post it, otherwise it’s just a hidden tax. Poker players don’t like taxes, hiding it makes it evil.
- Charity: Alberta Gaming mandates a portion of all gross pools be set aside for charity.
The charity formula is rather simple. In Alberta, it’s 10% for tournaments in the $1 to $150 range, and 2.5% for tournaments that are $151 or more. I can understand the need for small-stake tournaments, I love to play them myself. But why we have tournaments with a $125 buy-in is beyond me. I’d much rather play a $150-$200 tournament where the charity potion is 2.5% than a $125 tournament where it is 10%. Keep the small ones between $40 and $100. The next jump should be to $160 or so. That extra 7.5% adds a lot to the prize pool. Think of it this way: you could play four $100 tournaments where the charity rake is 10% or two $200 tournaments where the charity rake is 2.5%. In the first case you are giving up $40 on your $400, in the latter case the total you give up is only $10 on your $400. That effectively puts $30 in your pocket every two tournaments.
For a specific Alberta example, a recent $330 event in Calgary works out to the following formula:
- Buy-in: $300+30
- Plus portion is the +30
- Gross pool: $300
- Minus the charity portion of 2.5% (-$7.50 on gross pool of $300)
- Minus the stipend portion of 2.5% (-$7.50 on gross pool of $300)
This leaves a total to the player’s prize pool of $285. So how does that work out as a percentage? Well $285/$330 = .864. Thats means the total rake for this tournament was a whopping 13.4%. It’s high, but actually it’s close to being okay and in-line with most of Alberta.
I’d prefer to see the total rake percentage drop as the buy-in increases. In this particular example, I’d like to see it closer to 10%. Also, be aware that a $330 tournament can also have a higher plus portion than $30. When a casino doesn’t post the plus portion, ask them. I’ve seen $350 tournaments where the $50 is the plus portion — ridiculously high. When the buy in is $150 or greater, the plus portion should never be more than 10% of the buy-in. Walk out the door if it is.
Note: I don’t mention $1 to the bad beat jackpot as this portion goes back to players, and thus isn’t part of the rake.
Lower buy-in tournaments are extraordinarily bad for rake. For example:
- Buy-in: $100; plus portion of $10; dealer add-on tip of $5; 10% charity.
The total rake in this example is $25 out of your $115; that comes out to 22.3%. That means that for every dollar you put in, a whopping 77.7 cents went back to the players. Pretty steep. Did you know craps pays out an average of more than 98 cents for most bets?
Side note: In Vegas, the smaller buy-in tournaments range from 10% to 40%. There’s no charity portion in Vegas and I personally avoid casinos that charge more than 15% in the smaller events or more than 10% above the $200 range. I once asked the pit boss what the rake was on a $100 tournament. It was $25. I told him I can’t play at that rate. We had a brief discussion on why and I walked out the door. In Vegas, there’s always another tournament around the corner.
What do I expect from the casino as a player in regard to the rake?
- A clearly posted plus portion. For example, $330 buy-in should be posted as $300+$30. I shouldn’t have to guess what the plus portion is. If the plus portion isn’t posted, ask what it is. Again, over the $150 range it should never be more than 10% of the buy-in.
- It’s okay to have a dealer tip or a stipend, but please don’t have both. And this tip or stipend should be clearly stated. It’s a player tax and we don’t like taxes, especially more so if they are hidden.
- The charity portion should also be clearly stated somewhere — the structure sheet is a good place. I want to know how much is going to go to the prize pool. Hiding that information just doesn’t work for me.
- Casinos can’t get and shouldn’t get rid of the smaller tournaments, but they should bite the bullet here. Regardless of the buy-in, no rake should ever be a total of more than 20%. Casinos should treat these as loss-leaders. The regular low-end tournament players tend to spend a lot of money on the cash game, food, booze, slot machines, and other table games. They got players in the door; let the customers keep some money for their other vices — money that they will spend in the casino.
- I’d love to see more tournaments in the $160 to $400 range. At least we would have the extra 7.5% added to the player pool. The total rake in this range should fall in the 6-10% range. As the buy-in goes up, the rake % should go down. This would allow a small profit or at least a close to break-even scenario. The cash game profits from the busted tournament players more than make up the difference. I’d rather play five $200 tournaments in the next one or two months than spend it on a single $1,000 event. I’m sure the majority of players fall close into this range of thinking. Plus, the casino has me spending my other money five separate times rather than just once.
- Higher-stake ($500 to $2,000 buy-ins) should have a total rake of 5-8%. If players are spending $1,000 on a tournament, a large portion of them are also spending more at the cash game, blackjack, or the craps table. You could probably run these for free and still show an overall profit. Anything above the $2,000 range should be 6% or less. I was recently told that the casino break-even point for the casino was around $20 per entry for the average tournament. That fits well with a formula that lowers the rake percentage as the buy-in goes up.
I’m just one poker player out of many. But players are getting more educated every day about the cost of playing their game. If you have questions about the rake, ask a pit boss, look it up online, ask me if you have to. You know, I don’t talk much, but in this case I will. (Okay, I almost typed that with a straight face.).
I hope I have a few more players at least thinking about it, talking about it, and understanding it a little better. I also hope I can encourage casinos to rethink their poker tournaments. They should realize that rake is part of customer service. No one expects perfection, but good quality customer service will get me and other players through your doors — the rake is just one aspect of that service.
Bill Thomson is a moderately successful amateur player who passionately plays live poker mostly in the Calgary area, with the occasional venture to Las Vegas. He runs his own successful printing business. He also plays amateur hockey year-round. It's the only exercise he gets, not counting the walk from the car to the poker room a few times a week.