Casino poker rooms have three ways of generating money for the house: raking the pots, charging time, and tournament entry fees.
Raking the pots is the most common way for the house to generate its cut. What this means is they take a few dollars out of the pot of every hand that's played. Most houses that rake charge either 5% or 10% of the pot (look for the 5% places), and they usually cap the most they'll take out of the pot from $3 to $5 (look for the places that have a lower cap amount).
This is how the rake works: If a place charges a 10% rake with a $4 cap, that means that when there's $10 in the pot, they take out $1. At $20, they take out a second dollar. At $30 they take out a third, and at $40 another $1 is taken out. After that, there won't be more money taken out of that hand, because the maximum of $4 has been reached, so regardless of whether the pot is $50 or $500, the original $4 is all that's removed.
If you take a $4 rake per hand at a rate of 35 hands per hour, which is an average number of hands for a live poker room, you get $140 an hour for the house. Pay the dealers minimum wage, since they get tips, and pay the supervisor $15 to $20 an hour, and the house is making $100+ per hour for itself.
Some places have the players "pay time" rather than rake the pots. What this means is that the players must pay a fee to play, which is usually paid every 30 minutes. This is often for higher-denomination games, such as $30-$60 and up to unlimited stakes. When you see the high-stakes games, where multiple thousands of dollars are won or lost on each hand, they're usually paying time.
Paying time is generally $5 per half-hour up to $12 per half-hour, meaning each player pays $10 to $24 per hour to play. If a table is 10-handed, that means anywhere from $100 to $240 an hour for the house. You see the practice of paying time in California more than Las Vegas, but you'll find both policies used in either place. However, unless you're playing medium to high stakes, you'll probably play raked games only.
The third way poker rooms make money is by charging tournament entry fees. A common example is what's known as a "Sit 'n' Go" tournament, which is usually one table only with 10 players. It will be described as a "$100 + $10" tournament. What that means is that you pay $110 to play in the tournament, of which $100 goes to the prize pool for the winner(s) and $10 goes to the house. So if 10 people are in the SnG, the buy-in money totals $1,100 and the house pays out the $1,000 to the top finishers and keep the extra $100 for itself.
In the 2005 World Series of Poker Main Event, hosted by Harrah's, an astounding 5,619 players contributed $10,000 each to compete, for a total buy-in amount of a staggering $56,190,000. Harrah's kept 6% and paid out $52,818,610, so the casino's take on just this one tournament event was $3,371,400. While we understand a tournament of this magnitude is expensive to run, it would seem there was probably a lot left over once the expenses and tips were taken care of. (At huge events like this, the house generally distributes a part of its take to floor staff and dealers as a "tip," although who gets what and how much the dealers expect winning players to tip in addition to this is a matter of some controversy, which was addressed by Kill Phil author Blair Rodman in the QoD of 11/04/2005.)
Harrah's found one more way of making money from its poker in the form of sponsorships from drug companies (Levitra was advertised on the final table) and beer companies. Most televised sports see much of the sponsorship money going to the prizes for the contestants. In the WSOP, however, that's not the case, although we weren't singling out Harrah's for this practice, since other casinos that host televised poker tournaments do the same thing.
Whichever way you look at it these days, poker's good business.
