What is rakeback?
Have you had a chance to take a break over the holidays? And now you are well rested and ready to take on the New Year… I hope that 2009 is a good year for you, that you are able to stick to your New Year’s resolutions and that all your wishes come true!
We get asked, “What is Rakeback?” quite a lot, so I thought it was time for an explanation:
In order to understand what rakeback is, first you need to nail down the notion of rake. Every online poker room makes its money off the rake players pay on every real money hand they play. The rake is a small percentage that comes off a pot, before it is awarded to the winner.
It is very important to note that the rake comes off the pot BEFORE it is awarded. Many beginners consider that the rake is only paid by the winner. This assertion is erroneous and overly optimistic too. The rake is in fact paid by all those who put money into the pot, and here’s why:
The pot is considered a stand-alone entity at the poker table until it is awarded to the winner. Before that, it belongs to all those who have equity in it. Because the rake comes off it before it is awarded, it is safe to say that the rake is in fact paid by all contributing players, in a directly proportional manner with the amount of money they put into the pot.
In order to stimulate player traffic and sign-up rates, some poker rooms run special promotions called rakeback deals. A rakeback deal will give a certain percentage of the rake, generated by the player, back to the player. This way increasing the profitability of the game. The usual rakeback percentage is around 30% (Full Tilt offers 27%) but it can be much higher too.
How does a rakeback deal stack up against a good sign-up bonus? While the bonus expires, rakeback never does, it just keeps on making you money for as long as you play.
If you run a closer analysis you’ll realize that rakeback works in fact exactly like a sign-up bonus, with the exception that it never expires. Some people will rightfully argue that as long as you play micro and low stakes, bonus redemption will provide you with a bigger revenue stream than rakeback. Most poker rooms which offer rakeback, do not deduct bonuses from rake rebate, which means there’s not much point in arguing whether the bonus is better or the rakeback, since you can get them both without any restrictions.
Signing up for a poker rakeback deal is as easy as 1-2-3. All you have to do is sign up through the rakeback providing site and create an account at the poker room of your choice. Once you’re done with it, you will have to confirm your user name to your rakeback provider and you can forget all about the whole deal. This is the beauty of rakeback: it keeps on making money without you having to pay any sort of attention to it.
