Rakes of Online Poker Rooms from Actionflop Poker

RAKES OF ONLINE POKER ROOMS (REVISED 5/8/06)

One of the things I've always liked about playing low-limit hold'em online is the lower rake I pay compared to those taken at brick-and-mortar card rooms. We have a nice card room here in the upper Midwest that spreads thirty to forty tables on any given night. At the $2/$4 or $3/$6 tables the rake is 10% of the pot, up to a maximum of $3. This means that the rake for most hands is $3 (there are a lot of loose players). Add $1 to this for the jackpot drop and at least $1 for the dealer toke, and $5 of every pot doesn't count in your credit column toward your bottom line at the end of the year.

I've come to notice, however, that online rakes are creeping up, though they're still a bargain compared to the levels of B&M card rooms. I decided to pore over some statistics from Poker Tracker from the past couple of years in order to figure out just how much I was giving back to the house. Depending on the time of year, I might play as many as 12,000 hands a month or as few as 2,000, dividing my play among $25 PLHE, $2/$4 LHE, and $3/$6 LHE tables. Whatever kind of month it is, I end up paying a significant amount of rake. Over the past year, I've averaged about 3,000 hands of $2/$4 or $3/$6 per month. If you're like me, and you play a lot of low-limit Texas hold'em ($2/$4 and $3/$6, mainly), you might be surprised by what I've discovered.

I'll begin by talking about a site on my monthly "rotation." Poker Room has been one of my favorite places to play over the past two years, probably because I always seem to win there but for other reasons too. Regular players accumulate credits that afford them entries into freerolls with decent cash prizes. There are frequent and generous reload bonuses which are not too difficult to clear. But the profits from winning sessions have seemed to be getting smaller and smaller. I knew that Poker Room had changed its rake structure over the summer (the end of August 2005, more specifically). So, almost three months and several thousand hands after the fact, I decided to calculate the effect of the change.

Most of my data comes from $2/$4 games. In the chart below, I compare the two rake structures over multiple categories.

POKER ROOM RAKE COMPARISON - $2/$4 LIMIT HOLD'EM (FULL RING)
	# hands played	# hands raked	avg rake (flop) / avg rake (dealt)	average pot size	rake as % of pot

OLD RAKE	6,816	3,619	0.77 / 0.69	26.27	2.95
NEW RAKE	9,940	8,123	1.22 / 0.99	25.52	4.77

Some interesting figures jump out. First, Poker Room is now collecting a rake on 82% of all pots, versus 53% of all pots under the old rake system. This helps to explain why the average rake per flopped hand is $0.45 more under the new system ($1.22 vs. $0.77), and why the rake as a % of the total pot is over 61% greater than before (4.77% vs. 2.95%).

Like most online poker rooms, Poker Room abides by the "no flop, no drop" rule, meaning that it takes no rake if there isn't a flop. The Poker Tracker software calculates the "average rake" statistic by dividing the total rake by the total number of hands with a flop. This makes sense, since there is no rake if there is no flop. In order to make some of the calculations below, I've come up with a new statistic: average rake per dealt hand. I arrive at this statistic by dividing the total rake by the total number of dealt hands, flop or no flop. Having one fewer variable (% of hands raked), this formula makes it easier to calculate the amount one pays in rake over thousands of hands. Of course, you'd need several thousand hands for this statistic to be meaningful. Because my calculations depend on the relevance of this statistic, I'd be interested to know if there is a flaw in this reasoning.

To continue with a hypothetical situation. Let's say that you play 100 hands a day. If you are a very good player, you will win 10% of all hands you play. That means you will win about 70 hands a week, some raked, some not. Under the old system, you would pay $48.30 (70 hands won x $0.69 average rake per dealt hand) per week in rake. Under the new system, you would pay $69.30 (70 hands won x $0.99 average rake per dealt hand) in rake. That's $21.00 more a month, so over the course of the year, you would pay roughly $252.00 more in rake under the new Poker Room rake structure.

In my case, I won 8.78% of the 9,940 hands (872 hands won) of $2/$4 I played under the new rake structure. Not the best winning percentage, but enough to turn a small profit. So, I figure that I paid out about $262 more in rake than I would have under the old system: (872 hands won x $0.99 average rake per dealt hand) - (872 hands won x $0.69 average rake per dealt hand).

Now, let's compare Poker Room to other sites.

RAKES AT OTHER SITES - $2/$4 LIMIT HOLD'EM (FULL RING)
	# hands played	# hands raked	avg rake (flop) / avg rake (dealt)	average pot size	rake as % of pot

POKER STARS	6,030	2,921	0.70 / 0.62	24.31	2.89
PARTY POKER	6,929	3,505	0.86 / 0.78	26.37	3.26
CRYPTOLOGIC	6,083	4,504	0.99 / 0.76	22.91	4.32
PARADISE POKER	609	328	0.84 / 0.77	26.68	3.14
ULTIMATE BET	896	734	0.98 / 0.83	22.72	4.29
GAMING CLUB	144	81	0.77 / 0.73	26.53	2.91

The current Poker Stars rake is similar to the old Poker Room rake, especially the final statistic, rake as % of pot. In fact, it's even better than the old Poker Room structure, with the average rake being about 10% lower ($0.70 vs. $0.77).

The Party Poker statistics have been adjusted for the extra rake taken for Bad Beat Jackpot tables (2,244 of the 6,929 hands played were played at Bad Beat Jackpot tables, which rakes an extra $0.50 from every raked pot). Thus, $557 in "extra" rake was paid over those 6,929 hands. I'm a little embarrassed to admit that I played this many hands at jackpot tables, because I paid almost $50 in extra rake for the "chance" to win the jackpot. Because not all pots are raked, the extra Bad Beat Jackpot rake amounts to $0.25 extra per dealt hand (not $0.50 extra). If you regularly play the $2/$4 Bad Beat Jackpot tables, your average rake per dealt hand will go up to $1.03 -- still $0.19 less per dealt hand than Poker Room's new rake!

I haven't played enough hands at Paradise, Ultimate Bet, and Gaming Club for those numbers to be significant, but Crypto and Ultimate Bet are right behind Poker Room in the "rake as % of pot" category. The low average pot size at these two sites makes playing there even less attractive.

Let's crunch some numbers using that hypothetical "very good" (10% win rate) player.

Poker Room: 100 hands a day = 10 pots won a day = 10 x $0.99 avg rake per dealt hand = $9.90 rake paid per day = $3,614 rake paid per year

Poker Stars: 100 hands a day = 10 pots won a day = 10 x $0.62 avg rake per dealt hand = $6.20 rake paid per day = $2,263 rake paid per year

That's $1,351 difference in rake over one year! That's 338 BB! That's 0.93 BB per 100 hands!

I realize that in order for my calculations to directly apply to your game, the average rake for all hands should be representative of the average rake for hands that you will win. The truth is that this will not be the case because everyone's style of play is different. For example, the average rake taken from hands that I have won, regardless of the site, is smaller than the average rake for all hands. This has to do with my tighter style of play. However, the relative difference in the rake per flopped hand between the new Poker Room and Poker Stars is still significant even with smaller pots and rakes: $1.22 vs $0.70 overall (74% increase in rake) and $0.93 vs. $0.62 in my case (50% increase in rake). So, whether you tend to be more involved in small or large pots, count on paying a significantly higher rake at Poker Room than at Poker Stars, even if the increase is not as high as 74%.

Some readers have asked for a similar analysis of $3/$6 tables.

Along with the change in rake structure at the end of August 2005, Poker Room made a significant change to its $3/$6 LHE game, raising the small blind from $1 to $1.50. This change sent me elsewhere to play $3/$6 for awhile. To satisfy my own curiosity (and also to clear an expiring stack of bonuses more efficiently), I caved in and decided to play a few thousand hands of $3/$6 under the new (now, established) system. [Editor's note: A few thousand turned into much more after I discovered that clearing bonuses on the Poker Room network was much more efficient at $3/$6 vs. $2/$4.]

POKER ROOM RAKE COMPARISON - $3/$6 LIMIT HOLD'EM (FULL RING)
	# hands played	# hands raked	avg rake (flop) / avg rake (dealt)	average pot size	rake as % of pot

OLD RAKE	7,886	5,025	1.27 / 1.10	38.95	3.27
NEW RAKE	12,443	10,351	1.94 / 1.61	41.47	4.68

So, $3/$6 players at Poker Room are paying 53% more in rake per flopped hand than before, a little bit better than the 58% more that $2/$4 players are paying. You have to hand it to Poker Room -- they're consistent with their increases.

Here's the comparison with other major sites.

RAKES AT OTHER SITES - $3/$6 LIMIT HOLD'EM (FULL RING)
	# hands played	# hands raked	avg rake (flop) / avg rake (dealt)	average pot size	rake as % of pot

POKER STARS	6,288	3,606	1.12 / 0.93	35.43	3.16
PARTY POKER	4,682	2,544	1.26 / 1.03	37.15	3.52
PARADISE POKER	3,723	2,454	1.34 / 1.21	39.82	3.37
CRYPTOLOGIC	292	238	1.53 / 1.25	36.43	4.21

Again, the Party Poker statistics have been adjusted for the extra $0.50 rake taken for Bad Beat Jackpot hands (an extra $180.50 in rake over 646 hands, it turns out). Because not every hand is raked, the average rake per dealt hand is $0.28 more (not $0.50 more) per Bad Beat Jackpot hand at $3/$6. So the average rake per dealt hand on the $3/$6 Bad Beat Jackpot tables is $1.31 -- still $0.30 less per dealt hand than Poker Room's rake! You may not win that $100,000 jackpot, but you'd still be paying less to play at Party Poker.

Over the long haul, you will pay a lot more in rake playing $3/$6 LHE at Poker Room than at Poker Stars and even Party Poker. Poker Room's average rake per dealt hand is $0.68 higher ($1.61 - $0.93) than Poker Stars' average, and it is $0.58 higher ($1.61 - $1.03) than Party Poker's.

Here's the math for that hypothetical "very good" (10% win rate) player.

Poker Room: 100 hands a day = 10 pots won a day = 10 x $1.61 avg rake per dealt hand = $16.10 rake paid per day = $5,877 rake paid per year

Poker Stars: 100 hands a day = 10 pots won a day = 10 x $0.93 avg rake per dealt hand = $9.30 rake paid per day = $3,395 rake paid per year

That's $2,482 difference in rake over one year! That's 414 BB! That's over 1.1 BB per 100 hands! That's the difference between a break-even player and a consistent winner.

A note regarding rake change and the reload bonus:

A reload bonus always helps to offset the rake, but it may not help as much as you think. Poker Room's October 2005 reload bonus requires you to earn 10x the bonus amount (in dollars) in player points. (Prior to October 2005, players were required to earn only 7x the bonus amount.)

You receive 0.07 player points for every $0.10 in rake. Because the average rake per dealt hand of $2/$4 LHE on Poker Room is $0.99, you will receive an average of 0.693 player points (0.07 x 9.9) for every dealt hand. This means that you will need to play about 2,886 hands of $2/$4 to earn the 2,000 player points that will release the maximum $200 bonus.

"That $200 helps to make up the difference in rake between Poker Room and Poker Stars," you think. Let's do the math, again assuming that you are that very good player who wins 10% of all hands played. Once you play those 2,886 hands at Poker Room, you will have paid about $286 in rake: 289 hands won x $0.99 average rake per dealt hand. Had you played those 2,886 hands at Poker Stars, you would have paid back $179 in rake: 289 hands won x $0.62 average rake per dealt hand. The difference is $107, so you net a real profit of $93 on that bonus. Not bad, but not $200, either.

At $3/$6, the numbers make Poker Room's bonus even less lucrative. At $3/$6, you receive 1.13 player points per dealt hand, meaning that you need to play 1,770 hands to earn the same 2,000 player points. After crunching the numbers, I determined that the difference in rake paid after playing 1,770 hands at Poker Room and at Poker Stars is about $120, so you net a real profit of $80 on that bonus.

At both $2/$4 and $3/$6 (full ring), earning a 10x bonus (e.g. $200 for 2,000 player points) at Poker Room is equivalent to 70% rakeback, which is not a bad deal at all. But playing at Poker Room without a bonus (or with a bonus greater than 10x) is definitely a bad deal given the other options you have.

Conclusions? Ask yourself if the following statements describe you.

1. You play a lot of low-limit hold'em ($2/$4 and $3/$6), at least 100 hands a week.
2. You are a very good player, winning around 10% of the hands you play.
3. You are not a regular bonus whore.

If so, Poker Room is probably not the room for you. Poker Stars is the best option (the claim that players at Poker Stars seem to be tougher than those at Poker Room has not been my impression). The non-Bad Beat Jackpot tables at Party Poker are a good choice also. And I have found that the reputation of players at Party Poker being weaker than those at Poker Stars to be generally accurate. I'll withhold judgment on Paradise Poker, Crypto, Ultimate Bet, and Gaming Club until I can get more data.

So, even at its worst, the rake at the low-limit tables of online poker rooms is significantly lower than that at the local card room. Poker Room's rake is nearing 5% of the total pot, which is still less than half of the typical B&M card room rate. Plus, there's no dealer toke or jackpot drop. Even so, there's a meaningful difference among the rakes at the major sites, one that can translate into hundreds (or even thousands) of dollars "lost" by you every year.

Anyone wanting to submit data (taken from Poker Tracker) on any of the sites mentioned is welcome to send them to me at . I also invite comments on my analysis, particularly if you see any flaws in my math or logic.

Any questions or comments about this website can be addressed to .