How Rakeback Affects Your ROI - Money per Hour

Most players who play poker online today are either losing players or breaking even at best. This is a result of many things such as poor play, lack of experience, or they just simply cannot find a way to improve. Little do most of them know they can easily increase their earnings and ROI by signing up for poker rakeback and earning money back on hands or games they play.

Although rakeback is not a solution to long-term leaks in your game, it can definitely act as a cushion to help players that are new to the game or those who are dealing with a bad run of cards or variance. But before we go any further on how rakeback will affect your overall earnings, it is best to have a simple understanding of how your earnings are calculated in both tournaments and cash games.

Top 3 US Poker Rakeback Rooms:

• Doyles Room Rakeback
• Full Tilt Rakeback
• Ultimate Bet Rakeback

Calculating ROI

The Return on Investment, or ROI, is simply the prize money that you have earned in relation to how much money you invested to earn the prize money. For example in a $10+$.50 6 handed sit n go, there would be a $60 prize pool that would be paid out to the top two places. In most cases, 1st place would earn something $40 and 2nd would earn $20. Your ROI is the money you have earned minus your buy in which will tell you how much profit you made. The equation you would use looks like this:

• (($ Won - $ Invested) / $ Invested) x 100 = ROI %

The money invested includes both the buy in and the fee that the online room charges. If there were any re-buys or add-ons, those would be included as well. In short, if it came out of your pocket to try to win the prize, it needs to be added to the amount invested. So if you bought into this 6 handed sit n go and won first place, this is how your equation would look:

• (($40 - $10.50) / $10.50) x 100 = 281% ROI

As you can see, you have earned a 281% return on your investment which is fantastic. However, that is not long term and will drop significantly over a long period. Without getting into too much theory on ROI, for this number to be accurate you will want to have a lot bigger sample size of games to test. But for the purpose of our article here, all you need to be familiar with is the basic formula. If you are looking to calculate cash game ROI, you will need to take a little bit different approach in doing so.

Cash Game ROI - Money per Hour

When trying to figure out how much money you have made while playing in a ring game, you would not use the same formula for figuring ROI. The reason for this is simply that there are too many uncontrolled variables when playing in a ring game. A few of the reasons include:

• Inconsistent session lengths

• Amounts of money brought to the table vary

• Stakes Vary

It is not that the equation for ROI would just not work; it is the fact that it would be incredibly inaccurate. The best way to figure out how much money you made per hour while sitting at a cash table would be to take the amount of money you brought with you and subtract that from what you have at the end of each hour.

For example, if you brought $125 to a $1/$2 ring game and at the end of the first hour you had $163 then you would take $163 - $125 and know that you made $38 for that hour. If at the end of the second hour you still had $163 then you would take ($163 - $125) / 2 hours to see that you made an average of $19 per hour. By using this method, you can easily figure out how much money you made per hour, day, month, and even over a year.

The best part in knowing how to figure out your ROI and money per hour is how knowing how a simple concept like rakeback will help increase both those figures. Provided below are examples on how earning 30% rakeback can increase your income by several hundred dollars and raise your ROI by several percent.

How Rakeback Affects Your ROI

Before we get too far into this discussion, it should be first noted that not every online poker room offers rakeback on the fees that you pay into sit n go's or tourneys. The reason for that is unknown but may be that there is not nearly the profit to be made from tournaments and sit n go's in relation to ring games.

It just may not be worth their time. One notable room that does offer this to their player is Aced Poker. They will pay rakeback on ring games and sit n gos and do not subtract your bonuses from your rakeback.

Now, you will not notice an immediate increase in your ROI or profits from playing in tourneys or sit n go's. This is something that you would look over the long-term; say a week at the very minimum. To show you the significant difference that rakeback has on your account and ROI we have provided you with this example.

For this example, let's assume that you are playing at single table 10 handed sit n gos with a buy in of $10+$1. The payouts for a game like this would be something like $50 for first place, $30 for second place, and $20 for third place. Using the equation we showed you above, let's figure out the ROI for finishing in 3rd place.

• (($20 - $11) / $11) x 100 = 81.8% ROI

As you can see, you have earned a ROI of 81.8% which is great. Now, if you apply 30% rakeback to the $1 fee that you pay and only pay $.70 for a fee, let's see how your ROI will look then.

• (($20 - $10.70) / $10.70) x 100 = 86.9% ROI

For only $.30 in savings, this is a huge increase in ROI. Yes, it is only $.30 but over 100 games that would save you $30; or almost 3 more buy ins. For our last example, we will use a larger sample of games. You will still buy in for $10+$1 but you will have played 100 games winning 1st place 7 times, 2nd place 13 times, and 3rd place 17 times. Let's see what your ROI is then.

(7 x $50) + (13 x $30) + (17 x $20) = $1080 won over 100 games

100 games x $11 = $1,100 invested

(($1080 - $1100) / $1100 x 100 = -1.8% ROI

You actually lost money here. Now by applying 30% rakeback to the same situation, let's see how well you would do.

(($1080 - $1070) / $1070 x 100 = .93% ROI

-1.8% + .93% = +.87 ROI % Increase

Remember when saving $.30 per sit n go did not seem to make a difference? Well, over the course of 100 games, you saved $30 in fees and instead of being a losing player, you actually turned into a winning player. It should be simple to see how rakeback can turn your stats around. If you think that is great, wait until you see what it does for ring game players.

How Rakeback Affects Your Money per Hour

Rake affects a player's bottom line a little bit different in a ring game then in a tournament. Instead of buying into one tournament and paying the fee or "rake" once, a player has the opportunity to pay into the rake every time that they are involved in a hand. With over 50-100 hands played per hour, it is easy to see how a player can contribute $5 to $20 in rake per hour not to mention the money they could spend in a day.

Rakeback makes a bigger difference in ring games than tournaments because of the fact that you pay rake more often. For example, if you are in 50 hands in an hour with an average of $.10 paid in rake, you are essentially paying the online room $5.00 an hour.

With rakeback, you will get an average of 27-33% of that back meaning that you can make $1.35 to $1.65 of the rake back. That is not a whole lot of money in an hour, but if you multi table 10 tables at once, that is $13.50 to $16.50 extra per hour. If you keep that up for a standard 8-hour workday, you can easily make $110 to $132 per day all in rakeback.

For example, let's say you play at Aced Poker where they take .05 out in rake for every $1 that is in the pot. They pay 30% in rakeback and use the contributed method to calculate it. If you play 30 hands in an hour with an average of 3 players in the pot and an average of $1.25 taken out in rake, you will then be credited with $.42 rake.

From this $.42 you will then figure out how much rakeback you earned at 30%. $.42 x .30 = $.12 in rakeback earned per hand. This would come out to $3.60 per hour. If you kept this up at only an hour per day for a month, you would make $108. You can see the impact of the money that could be made, especially if you multi table.

Of course, the amounts will vary depending on the site you play at. This is because each room calculates rake differently as some determine the amount of rake taken based on stakes, number of players in a hand, and whether or not a player was involved in a hand or how much they may have contributed to the pot.

The most important thing that you need to keep in mind is that you are paying into the rake no matter what so there is no reason why you should not be earning some of it back. Depending on the stakes you play and for how long, it is possible to earn a living off the rakeback alone without any regard to how much you may have made at the tables.

How Rakeback Affects You

In closing, it really should be easy to see how as a poker player you can benefit from rakeback. Losing players can break even, break-even players can become winners, and winning players are earning even more. While it may not seem like much in the short term, in the long term you can make hundreds if not thousands of dollars from rakeback.

Most times players do not consider how much rake they pay when thinking of how much they make. Wit rakeback, it does not need to be so much of a concern, as you will earn 1/3 to 1/2 of it back. As a poker player, whether you are a part time player or full-blown pro, you will always benefit from having rakeback. There is absolutely no way you could not.