Just how much money is there in rakeback?

Every rakeback site on the internet, ours included, keeps going on about how easy it is to make money with rakeback, and how substantial an advantage it’ll mean for you at the poker table.

Even though it’s kind of simple if you think about it, nobody really backs up these claims with cold-hard numbers. Well, we’ll try to do that for you, so here goes:

We’ll have an experiment at a 3 handed $1/2 NL Texas Holdem table (we’ll keep it sort handed, so the calculations are easier to make). Players will be designated A,B and C respectively. We’ll emulate play with and without rakeback, over the course of 5 hands, and we’ll see what conclusions we can draw. The rake will be the industry standard 5% on a pot (max. of $3), and the rakeback is 30%.

In the first instance, we’ll follow a winning player, (one who remains with money at the end of the 10 hands) in the second instance, we’ll keep an eye on a losing player, while last, we’ll take a look at a break-even guy.

Let the game begin.
We have A,B,C sitting at a table with A on the button, B-SB, C-BB. Everyone has a bankroll of $10, blinds are $1/2.

Hand 1: Blinds are posted, A folds preflop, B calls 1, C checks. Flop hits the table. B bets 2, C folds. The rake is $0.3, C remains with 6-0.3= 5.7 dollars. His net win will be 5.7 – 4 ( the amount he himself posted) = 1.7

With the contributed rake method, the $0.3 is divided among the 3 players like so:

A didn’t participate in the pot at all, so his contribution to the final pot is 0%. His rake contribution is also $0.

B posted $2 into the $6 final pot. That’s a 33.33% contribution. Thus his rake contribution is 33.33% of the 0.3 total rake, which puts him to $ 0.099. That’s how much rake he paid during hand 1, even though he didn’t win.

C posted $4. That represents 66.66% of the pot. His share of the generated rake is $0.199.

Let’s set this in a table so it makes more sense:

Player	Initial sum ($)	Final sum ($)	Net gain ($)	Total rake taken ($)	Rake generated ($)	Rakeback due (30%) ($)
A	10	10	0	0.3	0	0
B	10	8	-2		0.099	0.0297
C	10	11.7	1.7		0.199	0.0597

The same table would look like this (if the rake calculation method were dealt):

Player	Initial sum ($)	Final sum ($)	Net gain ($)	Total rake taken ($)	Rake generated ($)	Rakeback due (30%) ($)
A	10	10	0	0.3	0.1	0.03
B	10	8	-2		0.1	0.03
C	10	11.7	1.7		0.1	0.03

Hand 2: Blinds are posted (B on the button, C in SB with 1, A in the BB with 2.)

B calls the BB, (2) C however goes all-in preflop (10.7). A folds, B folds, C takes the 15.7 dollar pot.Since there is a no flop-no drop policy at the room they’re playing at, no rake is taken from this pot.

In conclusion:

Player	Initial sum ($)	Final sum ($)	Net gain ($)	Total rake taken ($)	Rake generated ($)	Rakeback due (30%) ($)
A	10	8	-2	0	0	0
B	8	6	-2		0	0
C	11.7	15.7	4		0	0

The table will look exactly the same whether the rake calculation method is contributed or dealt, since there was no rake taken in the hand.

Hand 3: C is on the button, A is the SB with 1, B is the BB with 2. C calls 2, A calls 1. B checks. The flop hits. C checks, A bets 2, B raises 2 to 4 going all-in. C folds. Cards are shown, B wins. The pot is 12. The rake will be 5% = 0.6. B takes 11.4.

• A lost 4 out of his 8, contributed 4 to the pot of 12. His rake is 33.33% of the pot which mans he’s responsible for 33.33% of the rake. The rake being 0.6, his contribution will be: 0.199.

• B won 11.4 but out of that his net win is: 5.4. He contributed with 6 to the 12 pot, which makes his contribution 50%. His share of the generated rake is also 50% which is: 0.3

• C lost 2, remained with 13.7. He contributed 2 to the pot, which represents 16.66%. That means, his contributed rake is: 0.099

Player	Initial sum ($)	Final sum ($)	Net gain ($)	Total rake taken ($)	Rake generated ($)	Rakeback due (30%) ($)
A	8	4	-4	0.6	0.199	0.0597
B	6	11.4	5.4		0.3	0.09
C	15.7	13.7	-2		0.099	0.0297

The same table with dealt rake:

Player	Initial sum ($)	Final sum ($)	Net gain ($)	Total rake taken ($)	Rake generated ($)	Rakeback due (30%) ($)
A	8	4	-4	0.6	0.2	0.06
B	6	11.4	5.4		0.2	0.06
C	15.7	13.7	-2		0.2	0.06

Hand 4: A is on the button again, B is the SB (1) and C is the BB (2). A folds right away.B calls 1, C checks. The flop comes. B bets 2, C calls. The turn. B calls, C bets 2 B folds. C wins 10 out of which his net win is only 4 ( he posted 6 himself) The rake is 5% which is 0.5 in this case. C takes home a net win of 3.5, ending up with 17.2

• A stays in the game with 4. No rake generated, no rakeback expected.

• B loses 4 to C, ends up with 7.4, and a 40% contribution to the final pot. That makes his rake: 0.2

• C wins again, gets away with 17.2 at the end of the hand, and a 60 % contribution to the pot. His generated rake is 0.3

In conclusion:

Player	Initial sum ($)	Final sum ($)	Net gain ($)	Total rake taken ($)	Rake generated ($)	Rakeback due (30%) ($)
A	4	4	0	0.5	0	0
B	11.4	7.4	-4		0.2	0.06
C	13.7	17.2	3.5		0.3	0.09

With dealt rake:

Player	Initial sum ($)	Final sum ($)	Net gain ($)	Total rake taken ($)	Rake generated ($)	Rakeback due (30%) ($)
A	4	4	0	0.5	0.166	0.0498
B	11.4	7.4	-4		0.166	0.0498
C	13.7	17.2	3.5		0.166	0.0498

Hand 5: B is on the button, C is the SB (1) and A is the BB (2). B calls 2, C folds right away, A checks.The flop comes. B bets 2 and A calls him. B wins on the showdown. The pot is 9, the rake is 0.45. B takes home 8.55, out of which 4.55 is his net win.

• A ends up busting out, losing 4 in the process. Pot contribution = 4, which is 44.44% of the pot. Thus his rake contribution for the 5th hand comes to: 0.199

• B tallies a 4.55 net win, while having contributed 4 to the pot. That to is 44.44% and a 0.199 final rake contribution.

• C stays out of harm’s way, loses 1 on the SB. 11.11% is his share in the pot, thus his rake contribution is: 0.0499

Conclusion:

Player	Initial sum ($)	Final sum ($)	Net gain ($)	Total rake taken ($)	Rake generated ($)	Rakeback due (30%) ($)
A	4	0	-4	0.45	0.199	0.0597
B	7.4	11.95	4.55		0.199	0.0597
C	17.2	16.2	-1		0.0499	0.0149

Same thing looks like this with dealt rake:

Player	Initial sum ($)	Final sum ($)	Net gain ($)	Total rake taken ($)	Rake generated ($)	Rakeback due (30%) ($)
A	4	0	-4	0.45	0.15	0.045
B	7.4	11.95	4.55		0.15	0.045
C	17.2	16.2	-1		0.15	0.045

Let’s try to put all the relevant data into a single table:

	A		B		C
Net win	w/o RB	w RB	w/o RB	w RB	w/o RB	w RB
Hand1	0	0	-2	-1.9703	1.7	1.7597
Hand2	-2	-2	-2	-2	4	4
Hand3	-4	-3.9403	5.4	5.49	-2	-1.9703
Hand4	0	0	-4	-3.94	3.5	3.59
Hand5	-4	-3.9403	4.55	4.6097	-1	-0.9851
TOTALS	-10	-9.8806	1.95	2.1894	6.2	6.3943

Obviously, it is clear from the above table, that rakeback always pushes a winning player’s (C’s) winnings further up. He would’ve won 6.2 without rakeback, and he won 6.3943 with rakeback. Our break-even player (almost break-even, that is) B, has also seen an increase in his meager winnings from 1.95 to 2.1894. It may not seem like much, but keep in mind, these results were only for 5 hands, and even an average player puts in several hundred of these a day.

All of this is quite natural. The really interesting part is when it comes to our losing player. Since you generate rake while losing too, our player A lost only 9.8806 instead of the 10 bucks he would’ve lost otherwise. The conclusion is: not only will rakeback help you win, it’s also an efficient damage-control tool.

Let us now see the same chart using dealt rake method instead of the contributed one used above and analyze the differences:

	A		B		C
Net win	w/o RB	w RB	w/o RB	w RB	w/o RB	w RB
Hand1	0	0.03	-2	-1.97	1.7	1.73
Hand2	-2	-2	-2	-2	4	4
Hand3	-4	-3.94	5.4	5.46	-2	-1.94
Hand4	0	0.0498	-4	-3.9502	3.5	3.5498
Hand5	-4	-3.955	4.55	4.595	-1	-0.955
TOTALS	-10	-9.8152	1.95	2.1348	6.2	6.3848

By comparing this chart with the one above, we’ll see that the rakeback winnings of player C have dwindled a bit, while his losses have gone up. In the same time, Player A experiences the exact opposite. The reason is not whether they are winners or losers, but rather whether they’re active or not. Player C has put a lot of money into pots throughout the 5 hands, while A has sat out 2. (folded without putting anything into the pot).

The numbers come to confirm what everyone knew already. Dealt rake calculation gives tight and passive players an advantage, while contributed rake method benefits those who are aggressive and loose.