When you play most games in a casino, the casino makes money from the house edge. But how do casinos make money on poker? The question isn’t difficult to answer, but it is complicated.
The answer depends on what type of poker game you’re playing. Here’s the good news:
By the end of this post, you’re going to know what the different types of poker games are. You’ll also know how the casino makes money from each type of poker game.
As a bonus, you’re going to learn about one type of poker game that doesn’t have a house edge.
Why It’s Important to Understand How Casinos Make Money on Poker
It’s important to understand how casinos make money from poker. That’s because it directly influences how much you win or lose when you play poker. When you play one type, you have no chance to win in the long run because of the house edge.
But when you play the other type, you can use win more than you lose and profit over time.
Knowing how casinos make money on poker is as important as understanding who goes first in poker.
Categories of Casino Poker Games
Casino poker games basically fall into one of two categories. I introduced these two categories in the last section. The first poker category includes games that are designed with rules that have a house edge. The second type of poker includes games that don’t have a built in house edge.
Here’s a list of poker games that are included in the first category:
- Let It Ride
- Three Card Poker
- Four Card Poker
- Mississippi Stud
All of these games, and others that belong in this category, are found in casinos, usually close to the blackjack games and other table games. Another thing that these types of poker games have in common is the casino banks all of these games. In other words, you’re playing against the casino when you play poker games in this category.
Here’s a list of poker games that are included in the second category:
- Texas holdem
- Seven card stud
The main difference between poker games of this type and the games in the first category is that you play these games against other poker players. The casino makes money from these games by charging rake or fees.
You’re going to learn about all of the different ways that casinos make money from poker in the next four sections.
The House Edge
Casino table games that are based on poker are designed like other casino table games like blackjack and baccarat. These games have rules that the dealers and players have to follow, and the rules give the casino an edge. The edge is also called the house edge, and every casino game has a house edge, which is a percentage.
The house edge percentage is the amount the casino makes from all of the wagers made on a game. For example, if a casino takes bets worth $23,000 on a game in a day, the casino makes a profit from the bets. If the house edge on the game is 5%, the casino makes a profit of $1,150 on this game for the day.
The way you play each game can influence the house edge when you play some poker table games, but you can’t change the house edge enough to make money. So the casino always has a house edge on the table games in the first category of poker games.
It’s called strategy when you play poker games in a way that influences the house edge. You should always use strategy when you can because the lower the house edge is, the lower the amount of money you lose.
When you play games in the second category, which are all played against other poker players, the casino makes a profit by charging a rake, seat charge, or fee. You’re going to learn about seat charges and fees in the next two sections.
In most cash or ring poker games, the casino makes money by charging and collecting a rake on each hand. The casino sets the amount of rake collected, and the rake is usually a set percentage on each hand with a cap.
Here’s an example:
The casino collects 5% of the pot for rake in each hand, with a cap of $5. So if the total pot for the hand is $50, the casino takes $2.50. But if the pot totals $235, the casino takes $5.
Some casinos don’t collect rake on hands that don’t go to a flop, but others collect a rake on every hand.
You don’t see this in many casino poker rooms, but some places charge a seat fee instead of collecting rake. The place you’re most likely to see a seat charge instead of rake is if you play high-limit cash game poker.
Casino poker rooms that use a seat charge usually charge a flat rate every hour you play. For example, you might pay $20 every hour you play.
It might seem like a lot to pay $20 an hour in seat fees, but if you’re playing for $1,000’s a hand, the rake can add up quickly. If you play low-limit poker, the rake isn’t bad. But at the higher limits, the rake can be significant.
Tournament Entry Fees
Many casino poker rooms offer tournaments. The casino makes money in a different way in tournaments than in cash or ring games.
When you enter a poker tournament, the casino charges for your entry into the tournament, plus the casino charges a fee that they keep for profit. For example, entering a single table poker tournament might cost $10 to enter, plus a $1 fee. If you enter a $100 tournament, the fee might be $10.
10% is a standard entry fee for most lower cost poker tournaments. But when you play poker tournaments that have higher entry fees, the extra fee is often less than 10%.
Some poker rooms show the entry fee plus the extra fee separately, and some poker rooms include both fees in a single price. So if you see a poker entry fee that doesn’t show an extra fee, the odds are that around 90% of the fee is going into the prize pool, and the casino is keeping the other 10% or so.
Beating the House Edge
If you’re playing one of the poker games in the first category that has a house edge, it’s almost impossible to beat. In other words, you usually can’t beat the house edge.
Even when you use the best strategy available and know everything about the game, the house edge is usually set in a way that guarantees that the casino always makes a profit. The house edge is why I don’t recommend playing most poker games available in casinos.
If you want to play poker games in this category, do some research to know which poker games have the lowest house edge and find the best strategy to use for each poker game you want to play. You’re still going to lose money, but at least you won’t lose as much money as most gamblers.
Beating the Rake or Seat Charge
When you play one of the poker games in the second category, where you compete against other poker players, you can use strategy to win enough money to beat the rake or seat charge. When you learn how to use strategy well enough to beat the rake, you can make money or profit by playing these types of poker games.
Texas holdem is currently the favorite poker game of most poker players, but you can still find seven card stud and Omaha games. With the right strategies, you can beat the rake playing any of these games.
If you want to be able to find plenty of games, study Texas holdem strategy. But if you want to get the maximum use f strategy to win, I recommend studying Omaha strategy. Seven card stud is the hardest game to find, but most people playing it don’t use good strategy, so it can also offer a good opportunity to make a profit.
If you want to play poker games in a casino, I recommend learning as much as possible about strategy and only playing the games that belong in the second category of casino poker games.
Conclusion – How Do Casinos Make Money on Poker?
Casinos make money from most poker table games available in the casino from rules that give them a house edge. But the casinos make money from poker games in poker rooms by charging rake or fees.
In the long run, you’re almost always better off playing the types of poker games offered in poker rooms. It’s easier to overcome rake and fees than a house edge. And you can make a profit in poker rooms easier than you can in casinos.
But now that you know how casinos make money from poker, you can decide which poker games give you the most opportunities to win.