English: Poker Room at the MGMG Grand. Lion Reservoir in the background (Photo credit: Wikipedia)
If you play cash games at poker rooms, there are two or three items that will reduce the amount of the pots that you can win.
Rake – the amount that the house or poker room keeps from each pot. For this example, we will take $1 from every $10 pot up to a maximum of $5 when pots reach $50 or more.
Tips – the amount that a player gives the dealer when the player wins a pot. For this example, we will assume that the player gives one dollar for each pot won.
Bad Beat – the amount that the house or poker room keeps from each pot for the bad beat jackpot. For this example, we will use $1 per pot. Generally a bad beat is when one players has four of a kind like 2222 and the other player has 3333 for a better four of a kind. Rules at each poker house will vary.
Let’s assume that there are nine players at the table and that each player brings $100 to the table to play for a total pool of $900.00 in play.
Let’s assume that each player receives 20 hands per hour.
Let’s assume that they all play for 5 hours or 100 hands total and no one rebuys when they lose.
Of the 100 pots won, on average 50 of them will have a rake of $2 taken for a total of $100.
25 pots won will have a rake taken of $4 for a total of $100.
25 pots won will have a rake taken of $5 for a total of $125
An average tip of $1.50 will be taken from the 100 pots for a total of $150
A dollar taken out of each pot for the bad beat jackpot for a total of $100
Starting players amount $900
Less total rake amount -325
Less total tip amount -150
Less total bad beat amount -100
Ending players amount $325
Average amount remaining per player: $36.11
The effect of rake and tips is not immediately noticeable to the average player due to the fact that some players leave and new ones take their place, bringing new money to the table. Of course there are always those players that buy more chips and remain at the table.
Unless you are a winning player, it is virtually impossible to accumulate winnings when more than 40% of each players chips ends up going to the poker room and the poker room dealers.
I am a poker player and a poker dealer. I really appreciate my customers and the tips that they give us fellow dealers. I enjoy both the game and the challenge in spite of the fact that I do not play poker well enough to make a living doing it.
You could say that I love the social aspects of poker. As a player, I can relate to other players. As a dealer, I see the business side and relate to that as well. Some consider poker as part of the entertainment industry and I am striving hard each day to provide a service to my customers, the players.
And I hope that everyone understands that this is not a condemnation of the industry that I love but just an explanation of how it works. This post was the result of my thinking about the business side of poker that I wanted to share with you.