How Do Online Poker Sites Make Money?

Online poker sites work differently from most other online gambling. Rather than going up against the bookie to try to win money, you’re competing with other players, in a game that involves a reasonable degree of skill.

Most casino games advertise a certain RTP - i.e. the return to player, the amount players can on average expect to receive in winnings from the total amount stakes. The remainder is the bookie’s margin, so it’s easy to see how they make money from the game.

But that doesn’t work for games like poker, where the player’s skill has a real effect on the outcome of a game - and where you lose money to other players, rather than to the house.

So how do poker providers actually make any money from offering poker? Well, chiefly from ‘the rake’, which is the commission or fee taken by the house offering the game. This will be a certain percentage of the pot for each poker hand, generally between around 2.5% and 10%.

However, this isn’t the only mechanism online poker sites use to make money. In this article, we’ll explore all these methods of money-making, as well as the differences between online and real life poker sites in their profit-making.

We’ll also consider whether there are any good ways to make money from poker yourself - or if other strategies might work better from a profit perspective.

The History Of Online Poker

Poker itself has a long history, although its actual beginnings are something of a mystery. It’s believed that the game developed in the late 1700s in the USA, in the region of the Mississippi River, and spread throughout that region by 1800.

The game continued to develop over the 19th century, as did variations to the standard game, such as wild cards (around 1875), lowball and split-pot poker (around 1900) and community card poker games (around 1925).

Poker continued to gain popularity over the 20th century, with modern poker tournaments beginning in 1970 helping to catalyze its rise.

It’s therefore no surprise that, as soon as the technology became available, online poker came into being, with the first online poker games arriving in 1998 with Planet Poker.

The emergence of online poker caused an enormous surge in its popularity, both for playing and spectating, and attendance of both in person and online tournaments has increased sharply in the past couple of decades.

Although poker’s legal status varies from country to country, it’s often more accepted than other forms of casino gambling, due to the element of skill involved. It’s also possible to access poker sites hosted in other countries, making poker one of the most accessible forms of casino games out there.

How Do Real Life Casinos Make Money From Poker?

In real brick-and-mortar casinos, there are a couple of ways the house makes money from poker games.

‘The rake’ is one of the most common ways to profit from poker, where the house takes a portion of the cash pot available to win.

However, some casinos will charge an entry fee to players - for example, poker tournaments will often have entry fees - or will charge players an hourly fee to cover the time that they’re playing.

How Do Online Casinos And Poker Sites Make Money From Poker?

Naturally, online casinos and poker sites have to arrange things a little differently to make their money - though their profit-making runs along the same principles, for the most part.

Rake

The rake works just as it does for poker at real life casinos, where the house takes a percentage of the pot as commission. The rake is normally smaller at online casinos than in real life ones, though, as the cost of running an online poker table is much lower.

There tends to be a sliding scale for the rake to determine the percentage taken, and it’s usually capped at a maximum fee. The rake will normally be indicated in the information about the game, as shown below.

Entry fees

In tournaments, it’s common for an entry fee to be used in place of the rake. Generally speaking, 5% - 10% of the tournament buy-in (which goes into the prize pool) is added to the entry cost, and this is usually specified in the tournament information.

For example, you might see an entry fee of £20+£2, indicating that the tournament buy-in is £20, with a £2 entry fee. Below you can see a range of available tournaments on PartyPoker, including their buy-ins and current prize pots.

Side games

Other types of casino games can be much more profitable, so it’s common for online poker providers to offer side games like blackjack or roulette, where the house edge means the odds are always in their favour.

Some poker providers even go so far as to allow players to place side bets on poker hands against the house, where again the house has a solid expectation of profit.

For poker providers that are affiliated with, or even part of, online casinos, side games can be integrated into the poker platform itself to tempt players to wager their money on games that guarantee a profit for the house.

Investment of customer deposits

Finally, along with pretty much any other institution that holds customer funds, online poker sites will invest the money that customers deposit.

There are limits in most countries as to what exactly they can do with these funds to limit risk, but even so there can be significant profit to be made from investing those funds elsewhere.

How Do Online Casinos Combat Cheating/Fraud In Poker?

In some ways, it’s easier for online casinos to combat attempts at cheating on the part of their players. Their software can automatically look for patterns of behaviour that indicate breaches of the rules, making it harder to get away with cheating than it might be in person.

On the other hand, not being physically present opens up possibilities for players looking to gain an unfair advantage over their opponents.

It’s possible for several players in a game to collude with each other - though this is of course also possible with live poker as well.

What’s specific to online poker is the opportunity for a single player to be logged in under multiple accounts, which could seriously skew the odds in their favour.

Most poker sites advise that they are able to scan for this sort of activity - and indeed, in 2007 the winner of the main event of the World Championship of Online Poker was disqualified for breaching the rules.

Online poker is also susceptible to problems with insider cheating, just as with live poker. An employee of the provider might play themselves, using their access to the systems to gain an unfair advantage, or they might offer access to software or systems to other players.

Online poker providers go to some lengths to prevent such issues, however, and improving security software makes it ever more difficult to cheat the system as time goes on.

Is Online Poker Fixed?

It’s incredibly common to suspect that online poker’s fixed - especially given the potential problems mentioned above.

You see a lot of discussion in online poker forums about potential fraud on the part of poker providers, especially when it comes to how random the software’s random number generators might be.

This is compounded by the fact that online poker providers can be based all over the world, and the law varies from country to country as to how careful a gambling operator must be when offering poker games (or any other type of gambling services) to its customers.

However, even if a particular series of hands seems too unlikely to be true, the game isn’t likely to be fixed, especially if you’re playing with a UK-based provider, which has to meet the Gambling Commission’s regulation surrounding the industry.

In all spheres, humans are inclined to see patterns and to ascribe significance to events that are entirely random, and online gambling is no different. Overall, a run of bad luck is far more likely than a cheating provider, especially if that provider has a UK gambling licence.

It is of course possible that your fellow players might be attempting to cheat the system - but as technology has improved over the years, this has become much harder to get away with.

Is It Easier To Make Money From Poker Online Than In Real Life?

That’s a good question! There are advantages to both live and online poker, and it can depend to a great extent on your situation and level of experience.

The chief advantage of online poker is accessibility. There’s no real limit to the number of people who can take part in online poker, and the entry fees are often far smaller, with some rooms or tournaments being entirely free.

Online poker can also be a really helpful way for beginners to learn how to play - many poker sites specifically offer training and educational tools to help players improve their game.

It’s also possible for online players to play at more than one table at once. This opens up ways to increase your earnings that simply aren’t possible for players in real life, who obviously cannot be in two (or more) places at once.

On the other hand, one of the most important aspects of live poker is the reading of other players. Without playing in person, players have no chance to assess the body language and physical behaviour of their opponents, which is crucial to the success of many of the best poker players in the world.

But that isn’t to say that online poker players can’t assess their opponents’ behaviour at all.

It’s possible to use online players’ betting patterns, reaction times, speed of play and other tells that aren’t physical in nature to gain an advantage over one’s competitors.

Other Ways To Make Money From Betting Online

There are those who manage to make a good living from playing poker full time - Victoria Coren Mitchell being one of the most famous examples in the UK (though she is more famous for her TV work now) - and it’s easy to see why there are millions around the world who’d like to do the same.

The problem is that a successful poker career requires a lot of skill and experience, and few people are likely to make enough money when they’re first starting out to allow them to keep going. As well as this, the risks of failure are rather higher than with most jobs, as you have to put your own money on the line.

Fortunately, there are other, safer alternatives to professional poker, which allow you to make money from betting online with less risk, or, in some cases, no risk at all.

Matched Betting

Matched Betting is the strategy of betting both for and against the same outcome. So for example, you might bet both that Manchester United win a match, and also that they don’t win a match.

When you combine this technique with the many promotions bookies offer to lure in customers, you can end up making a guaranteed profit (so long as you follow the instructions correctly).

For example, you might see an offer where you have to place a £10 bet (known as a qualifying bet) to receive a £10 free bet. If you match both bets, you can roughly break even on the first bet, and then use your free bet to make a guaranteed profit.

Using this technique, it’s possible to make several hundred pounds a month - not a full time living, for most people, but a very welcome top up!

If you’re interested in learning more, our beginner’s guide to Matched Betting will take you through the basics - or you can sign up for our free trial to get started making profit right away.

Casino offers

We wouldn’t recommend this technique to anyone brand new to gambling or to Matched Betting, but once you’ve got some experience under your belt it’s well worth considering taking advantage of the casino offers bookies regularly send out to customers.

Casino offers aren’t usually risk free in the way that Matched Betting can be when done correctly.

Instead, you take advantage of statistics to take advantage of offers that have positive expected value - i.e., where the statistical likelihood is that you will make more than you lose on an offer.

On average, Outplayed diamond members can make several hundred a month just from casino offers.

It’s important to remember that you won’t always make a profit from every offer you complete - you’re likely to see upswings and downswings in your profit.

You should also be aware that there isn’t any guarantee of making money at all - though if you do a reasonable volume of offers the chance of ending up making a loss is fairly small.

That said, casino offers are the key to making significant consistent profits for many of our members, so they’re definitely worth exploring for experienced matched bettors or recreational bettors looking to boost their profits.

Summary

Online poker sites have a different profit model to other types of online casino or bookmaker, as players are competing against each other instead of against the house. Instead of the house edge, poker sites primarily make their money from the rake (a percentage of the prize pool) and from entry fees.

Poker is relatively unusual among online gambling games, in that skill is crucial to a player’s success. For this reason, there are players who are able to make a full time living from poker - but for new or less experienced players, there is significant risk involved in attempting to make money from poker, especially online.

If you aren’t experienced in poker but are looking to make money from betting online, Matched Betting is your best bet! Whether you’re a total newbie, or looking to expand into casino offers, Outplayed membership can give you the boost you need to start making profits today.