Rake Back: Money in Your Pocket
When you gamble, whether it’s online or in a casino, you are paying a fee to a service provider. In this case, a gambling company enables the gambling environment, joins players together, sets up tournaments, etc. In exchange for their service, they take a portion of each winnings as a service fee. In poker, this fee is called the rake. Although the cost of playing online poker varies, the rake fee is usually based on a percentage of the pot, with a maximum. For example, you could play a table with a 4% rake with a cap of $3. That means that if you won a $50 pot, 4% of this would go to the house ($2 in this case). Under the same conditions, a $100, or a $1000 pot would cost the winner $3 because of the rake cap.
So what does this mean for you? Well, think of the rake as if it were a banking fee. When you start out playing poker, you may not gamble much or often. Poker rooms still want your business and they’ll often offer you a great one time sign up bonus, but they won’t give you any discount on their service fee (i.e. the rake). This is no different then when you get your first car loan after you graduated from college with no credit history. Banks want your business, but they’ll charge you high interest rate for your first car loan. As you grow older and as you invest your money and build equity (buying a house, a car and maybe a nice motorcycle) and as you use a credit card or a credit line on a regular basis, then all of a sudden the attitude of the bank changes. Banks want your business because they know you and they know your habits. They want you to buy all kinds of financial products from them such as mutual funds, mortgage, insurance, etc. And banks know that once you built that equity, you can visit a competitor and lay out all your assets on the table, then use them as a bargaining chip for various advantages. The more you have, the less it will cost you in service fees in the long run.
The same phenomenon happens with poker. When you play high stakes poker regularly and you generate above average income to a casino, they’ll want to retain your business. And other casinos will want your business as well so the competition can get fierce. Unfortunately, not everyone is a high roller, so not everyone can get this negotiating power. Or can they?
The idea of getting back a portion of the rake you paid, called rake back, derives from the same concepts I described earlier. The difference is that instead of one individual bargaining for himself, a group of individuals get together and collectively bargain benefits for the entire group. Think of it this way: If you gamble $1000 in a casino and of that you only generate a 5% revenue each month, $50 in this case, you won’t have much bargaining power with that fifty bucks. However, if 10,000 people who also spend the exact same amount as you do in a month collectively get together and decide to “shop around” as a group, then you have a lot more to bargain with because you just turned $50 into $500,000. This is essentially what happens with online poker and rake back programs.
The way a rake back program works is that a group of individuals have an agreement in place with one or more online poker rooms. The idea is that members of this group will play exclusively in the casinos they have agreements with, thus creating a win win situation for everyone. To get rake back online, all you need to do is join a group that offers rake back to its members. And there is not necessarily an official membership per say. Often, you simply need to sign up to specific Poker rooms via their links. When you play, you will be charged the regular rake. However, every month your account will be credited a portion of that rake back. The amount depends on the agreement and everyone has different offers. Depending on how much you gamble in a month, you can be looking at getting back around 20% to 60% of your rake. Over a year, that’s a lot of money back in your pocket!
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