In order for you to understand what rakeback is, first you must understand rake. Rake is the amount of money that the poker room takes from the pot in cash games and the fees that pay for playing in tournaments. In cash games the rake is usually a small percentage of the pot, and is only taken when the hand requires a flop to be dealt. Rake is essentially how the poker rooms make their money and to be honest, they make a lot. Many players pay thousands of dollars a month in rake. For example, a typical cash game player who plays four $0.25/$0.50 no limit hold’em tables at a time, for a couple hours a day would pay over $1080 a month in rake!
Poker rooms can calculate your rake contribution using either the dealt or the contribution method. In the dealt method the total rake is split evenly between all the players dealt in the hand no matter how much each player contributed to the pot. Whereas, with the contribution method, the rake is split up proportionate to the amount of money you contributed to the pot. For example, if you contributed $40 to a $100 pot and the rake was $3, then the amount of rake that is counted as yours would be $1.20.
Rakeback is rake that is refunded to the player. Most online poker rooms offer to give back a percentage of the rake they take from the player if they sign up through a rakeback provider. The typical rakeback offer is around 30%, but can be higher or lower depending on what room you are playing at. A few examples would be Cake Poker rakeback offering 36% and PKR rakeback who offer 30%. Continuing with our example, if the typical player who raked $1080 a month played at Cake Poker and received 33% rakeback, he would receive about $356 of the rake he paid during the month back as a refund. That is a huge chunk of cash! Especially for a low limit player who only plays a couple hours a day.
There is absolutely no downside to rakeback. The only reason some players don’t receive it is simply because they don’t know about it or they already have an account at the poker site they want to play at. In order to receive rakeback you have to sign up as a new player to the site through a rakeback provider. If you already have an account at the site, then you are not eligible to receive rakeback at that site. One way to combat this is to open up a rakeback account at a new site or sometimes if you email the poker room about your dilemma they will be able to help.
I would strongly advise signing up for rakeback. When you receive your first refund at the end of the month you will be extremely glad you did!