What are rake and rakeback in poker? And why they are so important to players

As a poker player, you’ve probably heard the terms “rake” and “rakeback” before. But what exactly do they mean and why should you care? Keep reading to learn everything you need to know about rake, rakeback, and how to use them to boost your winnings.

What is Rake in Poker?

Rake refers to the small percentage fee that poker rooms and casinos charge players for hosting the poker games. This rake is taken directly from each cash game pot or tournament entry fee as a way for the poker site or live venue to make money.

The rake is typically only a few percentage points of the total pot value (usually between 3-10%), but it can add up quickly over thousands and thousands of hands. Virtually every real money poker room, whether online or live, uses some form of rake structure to make hosting the games profitable.

As a player, the rake essentially represents a cost to you each time you play. It’s money being taken directly off the table and deducted from the prize pools. The higher the rake, the worse it is for the players since less money is paid back out as winnings.

What is Rakeback in Poker?

Rakeback refers to poker rooms giving some of the rake fees back to players as part of a rewards or loyalty program. Rakeback is calculated based on the fees taken from the pots you play. For example, a room might offer 25% rakeback deals, meaning 25% of the rake generated from a players’ account is returned to them as cash at the end of each month.

The reason online poker sites offer rakeback deals is to compete for players. By agreeing to give back a portion of the rake as rakeback, poker rooms hope to attract more users and increase the liquidity and size of their player pools and games.

As a player, rakeback represents a way for you to pay less rake over your total playing time. A 25% rakeback deal essentially discounts some of the rake costs by that amount. It puts more money back into your own pocket rather than having it deducted by the poker rooms.

Why Are Rake and Rakeback Important for Poker Players?

There are two main reasons why poker rakeback and rake matter for your bottom line as a poker player:

1. Lower rake means higher win rates: Rake eats directly into the total prize money available. Lower rake, or getting money back via rakeback, means more money paid back out to players as a whole. This allows winning players to earn higher profits over the long run.
2. Rakeback boosts your overall earnings: Rakeback represents “free money” paid back based on the amount you play. Using a rakeback deal returns cash directly into your account every month. This cushions downswings and increases long term profits without you needing to play any extra hands.

Let’s take a quick example to demonstrate the power of rakeback:

Peter grinds low stakes NLHE cash games without a rakeback deal. He pays $10,000 in total rake fees over the course of a year while earning a 5 bb/100 win rate, giving him $5,000 in overall profit.

Sarah also grinds the same stakes and volume as Peter. But she uses a 25% rakeback deal. She pays $10,000 in rake as well, but gets $2,500 back via her rakeback. Her overall profit is then the $5,000 she earned at the tables plus her $2,500 rakeback payment.

Even though Peter and Sarah played the same amount and had identical win rates, Sarah made 50% higher profit thanks to her rakeback deal. This example shows why rake and rakeback are so crucial for poker players to understand.

5 Pro Tips to Reduce Rake Costs as a Poker Player

Now that you know why rake and rakeback matter, here are 5 tips you can implement right away to reduce rake costs and maximize value:

1. Seek Out Low Rake Rooms: Compare rake structures across various online poker rooms and play on the sites offering the lowest rake percentages possible at your stakes. Even tiny rake differences add up massively over thousands of hands.
2. Use Rakeback Deals: Don’t leave money on the table by playing without rakeback. Do some research and get set up with rakeback to all your poker accounts. This returns cash to your account directly each month, boosting your profits.
3. Table Select Based on Rake: Be aware that rake often varies across cash game tables and formats even within the same site. For example, 6max games often rake lower amounts compared to full ring games at the same stakes. Choose the table type with the lowest rake.
4. Avoid Excessive Promotions: Many sites offer things like jackpot rake races, bad beat bonuses, and overlay tournaments. But these all typically involve adding huge rake amounts compared to normal games that negate much of the promo value. Tread carefully.
5. Consider Live Poker: Brick and mortar poker rooms can occasionally offer lower rake than their online counterparts, especially in bigger game formats like 5/10NL and above where hourly rake is standard at many casinos. Do some homework to check if live play makes financial sense over playing online.

If you master rake and rakeback strategies, it will pay big dividends for your poker profits over the long run. You work hard to beat the games, so make sure you receive maximum value by reducing rake costs and taking advantage of rakeback programs.

A Bit More on Why Rake and Rakeback Matter So Much…

While the above covers the basics of how rake and rakeback impact your bottom line, it’s worth diving a bit deeper on why these things are so crucial as a poker player.

Beyond just nominal differences in percentages, there are compounding effects over thousands and thousands of hands played that truly add up. Maximizing rake efficiency makes an absolutely massive difference between eking out tiny profits versus earning very handsome rewards for your time and skill.

Here are two more key reasons why every poker player should treat minimizing rake as a top priority:

1. Rake Eats Your Profits Over Huge Samples: Let’s think longer term than just a single session, month, or year even. Over a ten or twenty year poker career, a winning player might play 5, 10 million hands or even more. Even tiny differences in rake add up quickly over such a huge lifetime sample. Just a 0.5% higher rake paid over millions of hands leaks away tens or hundreds of thousands in profits or more. Treat rake minimization as a career-long marathon, not a short term sprint.
2. Rake Compounds Your Losses During Downswings: Rake not only eats into your profits during upswings, but it compounds losses during inevitable downswings by deducting money straight off each pot lost. This means less money won back when you do finally start winning again. Lower rake and rakeback help cushion bankroll during cold runs so you lose less and don’t need to work as hard to recover.

Earning consistent profits in today’s competitive poker games is very challenging. Why make it even harder on yourself by playing in high rake games or not taking advantage of rakeback?

This is money being directly siphoned away from you that could instead be boosting your winnings with little extra effort on your part simply by being rake-smart.

So be diligent and treat poker like a business by minimizing expenses and putting processes in place to maximize your ROI. It takes work to beat the games these days, so make sure you get paid properly for your efforts.

Final Thoughts

Rake and rakeback often don’t receive quite as much attention compared to flashy game strategy talk. But understanding these concepts is absolutely fundamental to earn the highest winnings from your poker play.

Rake represents a direct cost to playing poker while rakeback offers a way to get some of that money back every month. Seeking out lower rake games and using rakeback programs boosts your overall earn rates and long term profits without needing to play any extra hands.

Beating tough games is hard enough without leaving EV on the table by not optimizing your rake efficiency. Every little bit counts, so drill down into your poker expenses by mining through rake structures and rakeback deals. This allows you to maximize your ROI and get paid the most for your time and poker skill.