Have Casinos Raise Their Percentage on Poker Tournaments?

Since profit is king, have casinos upped their percentage on poker tournaments, both small and large?

[Editor's Note: This answer is penned by poker-veteran Blair Rodman, co-author of our book Kill Phil.]

The price of everything goes up. Why should poker be any different?

When I started playing poker in Las Vegas in the early ‘80s, cash-game rakes and tournament entry fees were significantly lower than today. I played for years in “the Moss game” at the Horseshoe in the early ‘90s, in which the 10-20 limit hold ’em game had a $2 max rake, mostly because Johnny Moss insisted on it. (He used to tell me he didn’t understand how players could make a living with that kind of rake!) The day after Johnny died it went to $3. Oh, the horror! Today, at poker rooms that actually offer limit hold 'em (as no-limit has taken over most games), the rake would be at least $5.

Poker tournaments were born at Binion's Horseshoe in the early ‘70s. When I played them in the ‘80s, the rake on World Series of Poker events were along the lines of $1000+25, with the $1000 from each player making up the prize pool and the $25 (2.5%) being the entry fee that went to the house to help pay expenses. Players tipped dealers as they saw fit. Those were the days!

In the 2023 WSOP, events are structured a bit differently. In a $1000 event, the player ponies up just $1000, but 7.7% is taken out for the house and 3.3% is a mandatory tip for dealers and staff, so just $890 from each entrant goes into the prize pool. Tournaments at other venues today extract a similar percentage on the bigger buy-in events.

Smaller events have always had higher entry-fee percentages. $200+20 or $300+30 (10% entry fees) were standard in the old days. Today, fees have gone up, but not radically. $300+45 (15%) is common. Really small events, like $20 or $50, withhold a higher percentage.

The higher house fees are necessary for a few reasons. For one, as you mentioned, the mantra of companies and corporations is ever-increasing profits and poker is part of it.

But employee and other costs associated with putting on tournaments have inflated along with the rest of the economy. Putting on a major tournament like the WSOP is very expensive. Covering those costs while providing a sufficient profit to make putting on a tournament worthwhile necessitates rising fees.

When I was starting out as a pro, the goal was to work up to higher stakes, where the rake was similar to smaller games, so it wasn’t as significant of a factor. When California legalized hold ’em and stud in 1987, poker there exploded. Since California poker rooms at that time didn’t have a casinos to drive their bottom line, the poker operation was their source of profit. Not only did they charge higher rakes than Las Vegas, but they came up with the idea of setting the rake based on the stakes of the game, making it hard for players to outrun the rake by playing bigger games. Many rooms now charge players a “seat-rental fee” at a certain rate per half-hour. The rate rises with the rise in stakes.

Poker has always been a tough way to make a living, but I don’t know how younger players today can overcome the rakes and still prosper.

No part of this answer may be reproduced or utilized in any form or by any means, electronic or mechanical, without the written permission of the publisher.

Have a question that hasn't been answered? Email us with your suggestion.

Missed a Question of the Day?

Have a Question?

Tomorrow's Question

Where did casino shills work in the '70s and '80s and how much did they earn?

Comments

Kevin Lewis May-14-2023

Untenable

The young turks in particular tell themselves that they can overcome today's rakes, and tournament fees, well, meh, so what, there's so much "dead money" wocka wocka wocka belch grunt snort. The sad truth is that low- and medium-stakes poker is unbeatable now in Vegas (just like everything else down to and including fishing matchplay coupons out of dumpsters). The good news is that rakes are somewhat lower in other locations (not California, where they're actually far worse).
I really do wonder why anyone thinks they have a prayer of winning at the WSOP, with that 11% rake! Is anyone so stupid as to think that they can overcome a game with an 11% house edge?
And ya sure, their costs have gone up, I mean, they have to replace the butt cushions on the chairs every five years sob sob, but they ain't paying the dealers and chip schleps any more than can keep a hamster alive. And of course there's the $4 bags of chips and $11 sandwiches (baloney and dirt on cardboard).

Jackie May-14-2023

Wll aware of the changes

In '69 I was attending college full time and playing low ball in California card rooms while doing my home work.
I made enough playing poker to pay for all of my college (all 3 degrees) and earn extra income outside my job.

Today there is no way I could do that again with all the rakes and time charges.
I still do better than most but it has become not worth the effort.
Too much work for so little profit.

But there is still hope for less greedy charges as greed kills all sources of income.
Sure Mr. Rodman, prices go up as lack of profit kills games as much as too much profit.
But are tournaments really necessary?
Did it ever occur to anyone that WSOP spelled the death of profitable poker?
It certainly brought more players to the tables, penny ante home players thinking they could beat the professionals came out of the wood work and poker had a short revival, but greed gave birth to no limit holdem.

Soon poker will go through its final death throws and disappear back into home games.

Llew May-14-2023

Jackie

I agree!  I am strictly an amateur, but serious, player. I started playing 2-4 holdem at the Taj in the 90s and I was hooked!  I attended Barge and Atlarge, where I got the best poker education you could imagine. I also read a lot to improve my game. Worked up to 10-20 limit. Also did well in local, daily tournaments and one or two bigger ones. It was great!  

I didn’t have a lot of “fun money” when I started. No way would I have played no limit cash games or $300 buy-in local tournaments. I think it’s a shame that the greed of casinos and some players has made it hard for noobs like I was to start small and work their way up.

dblund May-14-2023

Perspective

I've no argument with those who are looking to make a living or pay for their college from poker winnings - I'm sure it has become much more difficult with the current structures.  

As a recreational player I still find the lower level daily tournaments to be a great way to spend my gambling budget, and a pretty economical one.  I can invest less than $200 and regularly get 4-6 hours of play, often with interesting people of a like mind, there to enjoy a good game with an opportunity to make some money at the end.  

If I spend a week in town and can cash 2 or 3 times I'm often able to go home with a little extra in my pocket, and almost always a story of some character I met that added to the experience.  For someone playing for entertainment, this still holds up as a great value.

With the closures, I'm happy to see we still have some very nice comfortable rooms to choose from, and mostly with really good staff.  I'll pay for this experience over automated tables or closures.

Question of the Day - 14 May 2023

Comments