How do poker sites make money?

How do these poker sites make money? They offer 100% or higher bonuses and also have freerolls. It seems like they would be losing money. When you deposit money its not like you are giving it to them its still your money and you can withdraw it

Just like any casino, they make money on the rake but unlike casinos they also make money on interest on deposits.

yea and the trnies that have like $10+$1 that dollar goes to the site

Nah man, They make alot of money, ppl hittin up that web site and downloading the program, and the rake that poker sites take from player who dont have a rakeback account, and the biggest money maker of all, their Back Jack is totally Rigged, well for the sites that do have bj. oh yea thats right the $1 goes to the house aftera $10 buy in, but check this out, some tourys are like 200 bucks and the 20 goes to the house, and theres like few hundred ppl in it so times 20 by a few hundered, allmost every hour a new tournament, so , thats part of where i think they make their money.

They make alot that is for sure.even in a small buy in or a small sitngo for exampe.Maby you enter a 10 man sit in that cost $2 +.20 The .20 goes to the site so they make $2 off eveyone that sits at that game.And there always Sit n gos being played.

A lot of their money comes from the interest on the money deposited. You are right that you can ask for your money back, but until they send you the check it is theirs. Just think about your savings account, you get money every period. Only they have millions of dollars in their accounts, and are getting a special interest rate. Cha Ching!

Rake.

Pimps and Hoes ldo

both ways have been cited: 1. rake, 2. earning interest on your money

the freerolls are usually very miniscule amounts compared to the rake they make constantly. and you should also realize that the bonuses they offer rarely if ever cost them money. in order to unlock your 100% bonus on a $200 deposit, you generally have to pay more than $200 in rake. so the "bonus" is just that you get some of your money back

FlowJoe said:

UUUhhhhh Are you serious??
Peace,
FLOW

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The amount that online sites make is nothing short of obscene. Forgot 'millions' and think 'billions'.

Players worldwide by the 10's of thousands. All paying MTT rakes, not to mention the ring game rakes. Cash to the house for every hand, 60 hands an hour, thousands of tables, 24/7/365.

Then add the interest on deposits. Ow, my head hurts just thinking about it ...

Just to give you guys some idea how much rake I have paid this year, and I only play 100 and 200nl, +$25k.

Stars has well over a trillion players, so like thats a trillion x $25k afaik!

On PokerStars for example, they take $.05 for aver $1 hand, up to $3 per hand. So in the big games they're pulling in $3 per hand which amounts to a lot when they play their 60 (or whatever) hands per hour.

5% is a significant number. It's more than credit card companies charge stores per transaction.
And even at low stakes that's significant. Look at it this way; a credit card company will charge a card holder a 15% annual interest rate. That is, if you owe $100 you'll be paying 15%, or $15, after a year (actually more because it's compounded). A lot of people call that 15% a ripoff. But when a site charges 5% rake, it's instantaneous, and it repeats every single hand. That adds up quickly. Every 20 rakes hands they're winning one averaging a pot profit. That's 3 or 4 average pots per hour per table. (PokerStars has over 20,000 tables running now, though I don't know how many are tournaments)

As for the 100% or 110% or whatever bonuses, those have to be unlocked. Basically, to unlock it you have to play enough that you're paying that much back in rake. So essentially a 100% deal means that you're playing rake free for awhile.

But even when you're playing "rake free" while until you match your initial deposit, sites make money off you. First, you attract more players who are not receiving deposit bonuses. Second, the poker site has your money and can do whatever it wants with it until you cash your check. That means they can deposit it and get interest, or invest it. We're talking about hundreds of millions of dollars in funds that they can draw interest on.

Let's say like Zachvac, you deposit $100 and turn that into over $10,000. Now you're playing $200NL and keep $10,000 in your account at all times to stay well rolled. Well, that $10,000 would get 3.5% or whatever if he stuck it in a bank. That's $350 he's missing out on each year he keeps it on PS. And you know who's keeping that $350 in interest. Plus, big depositors (multi-million dollar deposits) get special, higher interest rates.
Again, that interest is in addition to the thousands that they made off his pots.

HomeBrewer said:

A lot of their money comes from the interest on the money deposited. You are right that you can ask for your money back, but until they send you the check it is theirs. Just think about your savings account, you get money every period. Only they have millions of dollars in their accounts, and are getting a special interest rate. Cha Ching!

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This is an interesting point. Is the money held in trust, or is it available for any poker room to do with as they wish (i.e. gamble on pork belly futures)... there is no regulation and no way of knowing how sites use your money, but essentially once you deposit it is their money, and they can keep it all and go out of business any time and you have no recourse.

Leprechauns. The poker sites work with leprechauns.

oleg said:

How do these poker sites make money? They offer 100% or higher bonuses and also have freerolls. It seems like they would be losing money. When you deposit money its not like you are giving it to them its still your money and you can withdraw it

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First off i have never deposited any money on full tilt but I'am pretty sure i know how it works, if you deposit $50 they automatically take $5. and when you do the %100 bonuse u have 2 play for a certain amount of days I think that kinda BS. But i do know if u win money on the sites without depositing they dont take nothin from you.

Full tilt Point System

Lets take a look at Full Tilts Point system and the "Iron Man" Freerolls.

Point System - You get 1 FTP per $1 Rake from every pot that you are playing in at a table. So if there are 9 people at a table there are 9 points awarded for a $1 rake. With Full tables FT actually makes $0.11 per point. (tables that arent full say 5 ppl, there are 5FTP's awarded per $1 so that would be $0.20/pt, but we'll keep it with fuller tables)

Gold Freeroll - You need to accumulate 100FTP's for 25 days in the month in order to qualify for a $20,000 Freeroll. (Thats 2500 points in one calander month) 2500 X $0.11 = $275. Last month there were 503 players in the Gold Freeroll. 503 X $275 = $138,325. Full Tilt made $138,325 (at a minimum) off of 503 players and reward them with offering up $20,000 back in a freeroll. (Thats still a profit of $118K).

These were all "Minumums". You can also achieve "Gold" status by getting 200pts for 20 days in a month. (Thats 4,000 pts X $0.11 = $440)

Trust me... These sites make a LOT of money.

Makwa said:

This is an interesting point. Is the money held in trust, or is it available for any poker room to do with as they wish (i.e. gamble on pork belly futures)... there is no regulation and no way of knowing how sites use your money, but essentially once you deposit it is their money, and they can keep it all and go out of business any time and you have no recourse.

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In the Pokerstars FAQ they state:
"Q. Is my PokerStars account balance used for your operational expenses or is it kept in a separate account?
A. PokerStars is proud that, under special banking arrangements, an amount covering the total of all players' account balances is held in segregated accounts, not used for any operational expenses. These segregated accounts are managed by one of Europe's leading financial services groups. These arrangements ensure that PokerStars can at all times fulfill its obligations towards its players, and provides further reassurance that players' funds are always secure with PokerStars."


This is one of the areas where international regulation would help. Poker sites should be held to the highest of financial standards, similar to BnM casinos. In most U.S. jurisdictions, gaming commissions require that casinos keep enough cash on hand to pay for all of the highest payouts that 'could' hit simultaneously. The exceptions are the big mega-slot games where states or gaming manufacturers make the actual huge payouts after verification of the jackpot hit.

Lack of regulation, imo, is where playing at the smaller sites puts your cash at risk. Stars, FT, UB, etc pose huge competition situations that require smaller sites to make huge promotional risks where they use the player deposits for funding. Now THERE'S a crap-shoot...

Jillychemung said:

Just like any casino, they make money on the rake but unlike casinos they also make money on interest on deposits.

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I would like to see their monthly interest they get... There is some guys that have tons of money on PS. You would think they would poll that money off and make some interest on their own saving account............

420kings420 said:

First off i have never deposited any money on full tilt but I'am pretty sure i know how it works, if you deposit $50 they automatically take $5. and when you do the %100 bonuse u have 2 play for a certain amount of days I think that kinda BS. But i do know if u win money on the sites without depositing they dont take nothin from you.

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Wrong, Wrong and Wrong. Possibly the most uninformed post EVER.

(1) No, they take nothing out when you deposit.

(2) No you don't have to play for a certain number of days, you have to clear the bonus money through earning frequent player points. There's usually a limit on the time you have to clear the bonus, but clearing the bonus has NOTHING to do with how many days you play.

(3) If you win money or lose money it makes no difference, everyone is paying the same in rake.

the...

Rake on cash tables and the Tax on buy-in MTT's I know it looks small but alot of people play. I wish to make my own poker site one day. I wonder how much id have to invest.......Any clue?

If you want a good insider look on just how much money the poker sites make, take a look at the Party Poker financial records on PartyGaming.com for Pre-UIGEA.

Well poker sites make money off me by closing my account along with the money in there. no check no withdraw. just youre account has been closed...along with rake, and 10+1 nonsense..

nevadanick said:

In the Pokerstars FAQ they state:
"Q. Is my PokerStars account balance used for your operational expenses or is it kept in a separate account?
A. PokerStars is proud that, under special banking arrangements, an amount covering the total of all players' account balances is held in segregated accounts, not used for any operational expenses. These segregated accounts are managed by one of Europe's leading financial services groups. These arrangements ensure that PokerStars can at all times fulfill its obligations towards its players, and provides further reassurance that players' funds are always secure with PokerStars."


This is one of the areas where international regulation would help. Poker sites should be held to the highest of financial standards, similar to BnM casinos. In most U.S. jurisdictions, gaming commissions require that casinos keep enough cash on hand to pay for all of the highest payouts that 'could' hit simultaneously. The exceptions are the big mega-slot games where states or gaming manufacturers make the actual huge payouts after verification of the jackpot hit.

Lack of regulation, imo, is where playing at the smaller sites puts your cash at risk. Stars, FT, Ultimatebet, etc pose huge competition situations that require smaller sites to make huge promotional risks where they use the player deposits for funding. Now THERE'S a crap-shoot...

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By the way, do you know what "managed by one of Europe's leading financial services groups." means, it means that the money is not necesserely cash, but could be either financial assets or obligations or debt titles, managed by the "europe leading financial service group" they chose. Wich basicaly means that your money, is not necesserely "guaranteed".

In case poker stars goes Chapter 11, as a client, they have a debt towards you, but they are not "forced" to cover that debt, they just split whats left of the money with every one to whom they owe money. So keeping the total money of what players have means nothing if they have a financial leverage, wich I am not sure but I am prety sure they have.

This is no different than any company btw, and imo is innevitable.

I wish I could tell you more, im prety certain though pokerstars is not close to being bankrupt, not yet any way, but I have tried to find their balance sheet, so I could tell you exactly how "bullish" is that statement.

Maybe they have that cash in equity, wich then would be fine, or a bit safer.

And I think its bold to ask if they use that cash in operational expense, as soon as you put your money in the system, it becomes a part of operational expense.



:deal:

Money

yeah bud they make money on the Rake for each hand the higher the pot the more they get which in my opinion is why you see alot of AA,KK,QQ show downs. Also they make money from the buy in cost if you notice the cost for sit and goes and tournies alwayse is like 3.30 or 5.50 well that thirty and 50 cents goes to the site. Hoope that clears things up for you

Many many ways, Rakes, buy ins with 20% payouts, s&gs etc...