How Poker Rooms Calculate Rakeback

Many poker players can become confused when trying to calculate the amount of rakeback they have earned. Even when not trying to manually figure this out, they might not understand how their rakeback is calculated. There are currently three different methods that a particular poker room will use to calculate rakeback. The following is an explanation of all three of these methods, with examples, that should make a poker player’s understanding of rakeback much clearer.

Before explaining the three methods individually understanding what ‘monthly gross rake (MGR)’ is very important. In a nutshell, MGR is the gross profit a poker room earns from a poker player. Rakeback is based on this amount. If a poker room’s method of calculating MGR shows a player has earned them $1000 and the player receives 35% rakeback, then the player will receive $350. In a sense, then, this article is not really about how rakeback is calculated, but how MGR is calculated, since the poker player receives this rakeback based on their MGR.

The first method that a poker room might use to calculate MGR is the ‘dealt’ method. This is the most simple of the three to understand. If there is rake taken from the pot and a player was dealt in the hand, they will earn MGR, and hence rakeback, on that hand. This is calculated using the following forumula: ($amount raked from pot) / (amount of players dealt in) = MGR. The player will then receive X% (‘X’ being their rakeback percentage) in rakeback.

If, for example, there is a poker hand where 10 players are dealt in and the pot is raked $3, then for that hand the MGR will be $0.30. It is important to remember that as long as the player received cards, under this method, the player will earn MGR, and hence rakeback, on this hand.

Another method of MGR/rakeback calculation is the ‘average contributed’ method. Not only does a player have to be dealt in, but they also have to contribute to the pot in some way (even if they fold the small blind). This method, along with the final method, is much easier to explain with an example.

If 10 players are dealt in a hand, but only 6 contribute to the pot and the pot is raked $3.00, each player will earn $3.00/6 players ($.0.50). The formula the poker room uses for this method is ($amount raked) / (amount of players contributed to the pot) =MGR.

The final method is very similar to the ‘average contributed’ method above. This method, ‘weighted contributed’, differs in that MGR is figured in direct proportion to the amount of money a player puts in the pot. For example, 10 people are dealt in the hand and 8 of them contribute to the pot, but Player A folds on the flop, after he contributed $20 to the pot. If at the end of the hand there is $300 in the pot, then Player A has contributed 6.67% of the $300 pot. If $3 was raked from the pot, Player A’s MGR is (.067) * ($3.00) = $0.20. The formula is then (amount contributed to the pot / $ amount of pot ) * ($ amount raked) = MGR.

Each method has its benefits as well as its drawbacks, but these benefits and drawbacks are somewhat subjective and is not the purpose here. It also needs to be mentioned that a poker room always uses the same method to how they calculate rakeback. The only time it has changed in the past is when a poker room is bought by another company.

Once a player knows the formula used for each method, they will find that calculating their rakeback manually is quite simple. At the same time, this will most likely not even be necessary to do, but knowing how to do this can create a deeper understanding of how much the rake affects their bottom line and why rakeback is so important.

Shannon Gilchrist is the lead editor of Rake Tracker, a site dedicated to online poker rake tracking and rakeback.