What is Rakeback, and How Does it Work

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If you've spent any time playing poker online, you'll probably have come across the term rakeback. But what does it actually mean, and more to the point, how does it all work out in practice?

At its core, rakeback is simply a refund. It's a way that poker rooms pass some of the fees you've paid while playing back to you. Easy enough to understand, but the details do matter.

Getting to Grips with Rake

Before we get into rakeback, you need to understand what rake is.

Poker rooms don't actually make their money by playing against you, unlike other casino games. In poker, players are pitted against each other - and to make a profit, the operator takes a small take from each pot. That fee is the rake. In online poker that's usually around 5% of the pot, but there is usually a maximum cap.

In tournaments, the rake is built right into the entry fee. So if you see something like 10+1, that little extra 1 is the operator's cut.

Rake is what keeps poker rooms going, it's how they cover costs and keep games running.

What Exactly is Rakeback ?

Rakeback is a little reward system that gives players back a percentage of the rake they've already paid. For example if you've paid 100 in rake and your rakeback rate is 20% then you get 20 handed back over to you.

When you are playing real money games on 'qualified' tables, the system works out what you've actually contributed and applies the percentage.

Rakeback is usually credited on a set schedule - either weekly or monthly. On some sites it's automatic, while others need you to opt-in or meet certain conditions before payments get released. Sometimes it's plonked straight into your cash balance, and other times it's put in a rewards wallet. Details are usually listed on the offer page.

How does your rake get calculated

There are two main ways that operators work out individual rake contributions - the dealt method, and the contributed method.

The dealt method is pretty straightforward, rake is just divided up evenly between all the players who were dealt into the hand. So if ten players are at the table and between them they rack up 1 in rake each player would get 0.10.

The contributed method is a bit more complicated. This time, you actually have to throw some money into the pot for your rake to be counted. It's all worked out in proportion to how much you actually put in, so if you put 50 into a 150 pot and the rake comes in at 3, you would get 1 of that rake.

These models can produce different rakebacks even if two players are sitting at the same table. That's why it's worth knowing which model your poker room uses.

Different Rakeback Structures

Not all rakeback deals are the same - one of the most common is percentage-based rakeback. You get a certain percentage of the total rake you’ve paid over a set period. Some sites will even adjust this percentage depending on how much you play, or the type of games you choose.

Some sites use fixed deals instead. You get a certain amount for reaching certain targets - like playing a specific number of hands, or earning a certain number of points.

Some even use hourly rates, giving you a set amount for every qualifying hour you play.

Each structure usually comes with its own set of rules, including caps, time limits, or restrictions on what tables you can play on.

Does Rakeback Apply to all casino games?

Rakeback is essentially a poker thing. Most other casino games like slots or roulette don’t actually charge rake. They're based around the house edge instead. Because of that, rakeback mostly doesn't apply to them.

Some casino offers do look like cashback and might give rewards based on total wagers or net losses, but that's a whole different ball game.

Common terms and conditions

Rakeback systems usually come with all sorts of rules and restrictions. Minimum activity requirements, eligibility restrictions, games that contribute at reduced rates and caps on how much you can earn within a certain period are all pretty standard.

Fair-use and anti-abuse rules are also in place. So things like collusion or artificially racking up rake aren’t going to get you any rewards and may even get your account in trouble. Offers can change or get withdrawn at any time, so it's always a good idea to review the terms before getting your hopes up.

Is Rakeback Taxable in the UK?

If you are in the UK, gambling winnings (including rakeback) are generally not taxable. HMRC don't need you to declare your winnings from legal gambling activities. It's all on the operator to sort out gambling duty.

Tax rules can change though, so it's always best to check the official line rather than relying on what you think you know.