In poker, there is something known as “the rake” which is the house cut of each hand.
For most places, there is a percentage and a maximum cap for each hand.
In some places like California Card Rooms, the law is such that a percentage is not allowed, so there, they use what is called “the drop” and it is a preset amount that is taken from each hand.
And still, in other places, there is a timed “rake” or fee that is charged at a set rate on a set schedule. Most typically 30 minutes, 50 minutes, and one hour.
No matter how the rake is accomplished, this is the way poker rooms and casinos make money on poker.
I have seen many small games and card rooms quickly go from making good money to barely getting by or worse, out of business. This happens because they set the rake too high and pull in too much money.
WHAT?!
Yes, the house making too much money will break a game and a lot of the time, people will not even know why. It’s not like most gambling patrons will say - wow, you are pulling $6 a pot, I am not playing here. If you ask players why they leave, most will not say it is because the rake is too high.
Of course, there are exceptions, sometimes the rake is just silly and those games usually do not get going at all.
The most common issue is that someone is getting greedy. “let’s just raise our rake by $1 a hand” they say; “no one will notice or care”. And, they are right,
Then slowly but surely games break early, players do not stay as long, and eventually stop coming altogether.
This is because the rake is dependent on money moving around the table and an active table. If you tip this balance, then the house ends up with the money “too soon” and the players do not have any money left to play with.
If you are running low on chips because you have had a bad night and are trying to decide if you want to buy in again, most players will look around the table to see what chips are left for them to “win”. If the total chips on the table have been depleted because of the rake before players have had enough time for a few of the players to re-buy, then the game just dies.
Running a poker game is a long game, not a get-rich-quick scheme. And if you are going to also play, you should never consider the “rake” as something that will “bail out your loss”. This is a business, all aspects need to be able to stand on their own while as Drucker said, creating a customer.
In the book YOU’VE GOT TO LOSE TO WIN - Slade is very concerned when he realizes that Arnold has been over-raking a game. This is why. It is one of the main reasons games will die.
Hence the saying —- you can sheer a sheep many times, but you can only gut them once.
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