Online poker: how the business works

Poker is different from every other casino product: players compete against each other, not against the house. The operator's revenue is rake, a small fee taken from cash-game pots and tournament buy-ins, so its interest is in busy, healthy games rather than in players losing.

Rake and liquidity

A poker room is a marketplace. Players go where there are games at their stakes at any time of day, so the biggest pool of players attracts even more players. This network effect is called liquidity, and it explains why online poker concentrates in a few large networks and why ring-fenced national markets struggle.

Cash games pay rake per pot, usually a percentage with a cap.
Tournaments pay an entry fee on top of the prize pool contribution.
Rakeback and rewards return part of the rake to players and are a major cost line.

Shared liquidity

Some regulators allow licensed operators to pool players across borders. In southern Europe, France and Spain began sharing player pools in 2018 and other regulators have joined since; in the United States, several states pool players under a multi-state agreement. Where pooling is not allowed, small markets often cannot sustain deep games.

Integrity

Because players compete with each other, poker operators must fight collusion, multi-accounting and software assistance such as real-time assistance tools and bots. Game security teams and detection tools are a larger cost in poker than in any other vertical.