3

It would appear as though it is a zero-sum game, i.e. whatever one player loses, another player wins, as opposed to for example, sports betting where the house always takes a spread no matter what.

So how do online poker sites make money?

7

They take a percentage of each pot, called the "rake."

  • A basic example would be a great addition. Thanks. – Toby Booth Jul 27 '14 at 1:17
  • What's the approximate typical percentage that they take? – CaptainCodeman Jul 27 '14 at 11:09
  • @CaptainCodeman each site will tell you how much their rake is. You'll generally find something like X% with a Y$ cap, and the cap may depend on the game's betting structure. – mah Jul 27 '14 at 13:31
2

As well as rake, the amount of money deposited on such sites is massive and so a significant chunk of money is made by the sites investing the collective bankroll. There are however strict rules to stop companies using more riskier investment strategies.

As an aside, if you're comparing one site with another it isn't enough purely to compare the rake level. Some of the rake can be reclaimed in loyalty schemes etc. How these operate varies greatly from site to site.

1

As others have mentioned the main way these sites make money is from rake, where a percentage of the pot or entry fee is taken.

It might also be worthy to note that there are some rake-free poker sites such as BetRaiser.

These sites generate their income mainly from the transfer/deposit fees when you move money in and out of the site. Some sites also use their online poker purely as a side line to win over traffic into their online casinos.

1

On average they take 5% of every pot, or 5-10% from every tournament entry fee. That is called rake. Rake is also present in real Casinos.

  • Looks like part of your post got lost...? – Robbie Dee Jul 28 '14 at 11:34
0

Another side way they make money is by owning the Credit Card processing company that takes your deposit. Often a deposit of say 1000 might show up as 1008 or something on your statement. Some books refund that but since 90% of players lose their entire stack it doesn't matter.

  • I'm not aware of any instance where this is true, do you have any examples to back it up? And what do you mean by your last sentence, "Some books refund that but since 90% of players lose their entire stack it doesn't matter"? – Herb Wolfe Jun 1 '17 at 5:59
  • Most people who play online poker bust so the refunded fee that they get from the CC processor isn't lost. Actually its true in most instances, domestic CC payments are always charged to some company like LATECH China or whatever, you can see this on your statement. The Casinos own those companies. – ShestheFastest Jun 1 '17 at 17:17
0

Some online sites will use favourable retail exchange rates/average exchange rates as a secondary source of income i.e. they can get favourable exchange rates with financial institutions, and the customer may be subjected to a less favourable rate upon deposit and withdrawal. They make the difference between these two rates.

This has anecdotally happened to me on pokerstars.

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