Poker Word of the Week: Rakeback
Rakeback is a refund from the poker room to the poker player who generated the rake in the first place. In other words, it’s a way for you to save a few dollars on poker rake costs.
What is the rake? Poker rooms have to generate their profit differently from online casinos with regular casinos games because poker players are wagering money against other players rather than against the house. Thus, online poker rooms create their profit from charging rake from all its players. Its kinda like the administration fee to the poker room for organizing the games and is typically 5% of the pot.
Almost every poker room online today employs affiliates to help market their poker room through advertisements on websites and in magazines for example. One method the poker rooms use to pay these affiliates for their services is with Monthly Gross Revenue (MGR for short). MGR is basically a percentage of the rake generated by players who sign up using the affiliates’ tracking code. As a result of competition amongst the affiliates, however, they decided to return a considerable percentage of the money they were receiving from the poker rooms back to the players … thus giving birth to the rakeback industry as we know it today.
You will find that some poker rooms are opposed to offering rakeback to players and PokerStars is one example.