How Does Casinos Make Money On Poker

Poker is a player-versus-player game, and the house does not wager against its players (unlike blackjack or roulette), so this fee is the principal mechanism to generate revenue. It is primarily levied by an establishment that supplies the necessary services for the game to take place. Casinos are a business and there to make money so all the money you see on the casino floor goes to the running of the casinos and the investors. A bit goes to pay off the machines and games to.

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Tiltpoul

With the ring or cash games, part of the drop or rake might actually go towards a jackpot pool. But you have to check about the percentage of the 'jackpot contribution' that is returned to the players when the jackpot is hit. At a few of the casinos where I play, they take HALF of the jackpot pool as an administration fee. You'd never know that if you didnt ask for the rules at the cage.


50 % of the jackpot fund is highway robbery. I think most Midwest casinos take out about 10% as an Admin. fee, but some states require that any funds collected in such a manner must be paid out to players regardless. The same idea applies to Caribbean Stud... the jackpot gets funneled into some promotion or game that must be paid to the player. The jackpot still can charge and Admin fee, but it's much higher on table games than it is in a poker room.
Actually, I think ANY Admin Fee on a player-funded jackpot pool is ridiculous... in most cases, that money sits there, untouched for a long period of time. The casino is collecting interest on that money, and in many cases, it's not paid to the pool (I think there are states where even interest must be applied to the pool). The purpose of a rake the casino's portion for running the game; any promotions they choose to run shouldn't come at the cost of the player.
Quote: pacomartin


For smaller casinos poker only collects enough money from the rake to pay for the cost of the poker room and the dealers. The casino is hoping that these players will stick around and play more profitable games. Sometimes friends accompany the poker player and play slots or pit games. So it is basically a loss leader.
Poker brings in 1.6% of the total gaming revenue for NV, sports brings in 1.4%, and race book brings in 0.7%. So in general you can probably refer to them collectively as means to attract people into the casinos. There are some exceptions, casinos that do make a bigger profit on poker.


I agree that a poker room 'legitimizes' a casino nowadays. It used to be a burden, now it's an asset. Smaller rooms barely make their money back, but the bigger rooms (typically run by MGM, Caesars or Hollywood) are going to be profitable. Poker is too big right now, and casinos can charge higher rakes without much backlash. The circuit tournaments, with a good turnout, are cash cows. This is why the bigger casinos run 4 of them year...
'One out of every four people are [morons]'- Kyle, South Park
zippyboy

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MoneyWell, not ALL poker rooms are profitable. Tuscany, Fitzgeralds and Silverton all closed their poker rooms in the last couple weeks.
'Poker sure is an easy game to beat if you have the roll to keep rebuying.'
pacomartin

Well, not ALL poker rooms are profitable. Tuscany, Fitzgeralds and Silverton all closed their poker rooms in the last couple weeks.


The larger casinos run poker rooms with some exceptions. Gold Coast has Bingo instead, Paris, Cosmopolitan, and NY-NY do not have poker because it doesn't seem to fit in with the theme. The 19 poker rooms in the larger Strip hotels made $100 million last fiscal year (2.06% of revenue). The 10 poker rooms in the smaller strip resorts made $5.7 million (0.97% of revenue).
I have seen managers write about poker in their quarterly and year end financial reports about smaller casinos. They flat out tell the shareholders that poker revenue just barely covers costs, but they believe it attracts other business into the resort. It may be as simple as a wife or girlfriend (or boyfriend so as not to be sexist) who plays slots while their partner plays poker.
Clearly tournaments have to be more profitable for the casino than grabbing a percentage of the pot as a rake. People are relatively immune to lotteries taking up to half the money. But they are very sensitive to sticking your fingers in the bowl.
One floor manager told me that in decades of running the floor, the first thing any green manager will tell him is that slots make the most profit per square foot. His answer is always, of course!, any idiot knows that. But slots alone don't bring people in the door.
DJTeddyBear

It may be as simple as a wife or girlfriend (or boyfriend so as not to be sexist) who plays slots while their partner plays poker.

It doesn't necessarily need to be a second person.
There is hardly any casino trip that I devote exclusively to poker. You'll ALWAYS find me at a craps table for at least one short session. Maybe longer or more than one...
And if I did particularly well at poker, I might be inclined to play a little looser at craps.
I invented a few casino games. Info: http://www.DaveMillerGaming.com/ ————————————————————————————————————— Superstitions are silly, childish, irrational rituals, born out of fear of the unknown. But how much does it cost to knock on wood? 😁
blakepaul
On my own knowledge and opinion, I guess they make money on that one. There would be a certain percentage that they get in every game that was played. I really hoped that things would work out well and fine in the long run for this one.
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Tiltpoul

The larger casinos run poker rooms with some exceptions. Gold Coast has Bingo instead, Paris, Cosmopolitan, and NY-NY do not have poker because it doesn't seem to fit in with the theme.


Paris and NY-NY do not offer poker largely because of space restrictions and the fact that neighboring properties DO offer poker. My understanding was Paris closed theirs to funnel all the action over to Bally's and now Planet Hollywood. It's cheaper to run one larger poker room, than two separate rooms. NY-NY doesn't have a great space for poker, given it's open air layout and awkward paths. My guess is they, too, wanted to funnel action to other rooms, though MGM properties tend to all have poker rooms, so I'm not sure that's as valid of an argument.How
Why Cosmopolitan doesn't offer one is a huge question to me. I disagree that it doesn't fit in the theme. Poker is a chic game, and of all the places on the strip, I would think they could have the coolest one around. There's a lot of great places they could put it too, and possibly even offer some sort of higher level so you get a nice view of the strip.
'One out of every four people are [morons]'- Kyle, South Park
FleaStiff

slots make the most profit per square foot. His answer is always, of course!, any idiot knows that. But slots alone don't bring people in the door.


Precisely. Its a casino and many customers define the look and feel differently. Some slot players don't go near table games but they still consider them to be part of the ambiance. Even Table Game players tend to enjoy the sights and sounds of slot machines paying off. Consider the interests of spouses, rail birds, etc. and it can be that a poker room makes its money by attracting customers. Just as a Casino's Bingo Room makes money on the even hours wherein Bingo players utilize the slot machines, so too some casinos may make money on their poker rooms under times and circumstances not discernible to bean counters.
Poker rooms have reputations for tight-fisted locals, Tourists, ... whatever. I don't think its the question of how much a poker room actually brings in, but how much a casino loses if they close the poker room. Think of those famous shrimp cocktails. Its not cost of all that shrimp, its the cost of ending the special promotion.
PopCan
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In terms of reseeds for the bad beat jackpots, if you're ever in a poker room when one hits you can tell what method they use. If the jackpot reseeds to a fixed amount such as $10,000 then they'll take a portion of each jackpot drop to slowly repay the reseed.
If it reseeds to a large, uneven amount, say $23,498, then they're using a reseed pool. In that case a portion of every jackpot drop goes to the jackpot, say 70%, while the remainder goes towards the future reseed. This is because of the diminishing returns on a climbing jackpot. A jackpot at $20,000 attracts more players than a $10,000 jackpot but a $110,000 jackpot isn't much more enticing than a $100,000 jackpot. Having a reseed pool allows the jackpot to immediately return to a high amount after being hit, keeping the players interested.
buzzpaff

It doesn't necessarily need to be a second person.
There is hardly any casino trip that I devote exclusively to poker. You'll ALWAYS find me at a craps table for at least one short session. Maybe longer or more than one...
And if I did particularly well at poker, I might be inclined to play a little looser at craps.


I definitely second this opinion. I often see guys I know only from the poker room playing high limit blackjack or slots. I usually try to hit the poker rooms when a tournament is ending. Just love all those moves and bluffing the tournament players try at low limit hold'em. LOL
bigfoot66

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