This article assumes you've already read our previous article on what rakeback is and that you'd now like to learn how it's calculated. If you haven't, and you are not yet familiar with the term 'rakeback', then please read that article before continuing with this one.
Having said that, no matter which poker rooms you join, no matter the details of their specific rakeback offer, the rakeback itself is calculated essentially the same way (I say 'esentially' because there can be slight variation from site to site, though generally they're all the same).
Most online poker rooms use a figure called Monthly Gross Revenue (aka Monthly Gross Rake) generally written as MGR - to determine the amount each player has paid in rake, and consequently how much rakeback each is entitled to.
Basically, the way most sites calculate the MGR is by dividing from each hand played, the total rake taken by the total number of players dealt into that hand. Add all those numbers up for one month's play, and you have your MGR.
Here's an example: let's say there were 10 players dealt into a hand, including you. Let's say further that the rake taken out of that hand was $0.50. The number added to your personal MGR would be 5 cents. (If, however, you sat out of that hand, you would not get credit for any of the rake the house earned in that hand to receive later as rakeback.) If you played 1000 hands in a given month that went exactly the same way, then your MGR for that month would be 5 centts x 1000 hands or $50.
A variation on this MGR calculation, incidentally, is to divide the total rake taken in a hand only by the number of players who actually contributed to that rake. This means that if you were dealt cards, but decided to fold before paying any blinds, you will not be entitled to any of the rake taken out of that hand. This is one reason why it is extremely important to know how the site you're considering joining factors their MGR, especially if you're joining a site specifically because of their rakeback offer.
Moving on then, once your MGR is calculated then a percentage of that number, the percentage each site lists in their rakeback offer, is paid into your account as rakeback.
So, to give another example, If your MGR is figured to be $50 and the site's rakeback percentage is 30%, then the amount you would receive in rakeback is: $50 X 0.30(30%) = $15.
Now often certain other factors will also come into play in calculating rakeback. For one, tournament fees are often included when figuring out a player's MGR (check the specific Terms & Conditions for each site to find out). Bonuses, on the other hand, are almost always subtracted from any rakes that you paid.
If you know the rakeback percentage a particular poker room offers, all you need is to get the MGR and you can figure out the exact dollar amount you'll be owed in rakeback. This is why so many "rakeback portal" sites post rakeback calculators on their sites. Because you can use it to calculate the rakeback at any poker room online, as long as you know their particular percentage. (More on comparing and contrasting the rakeback offers of different online poker rooms in our companion article devoted to the subject.)
The basic rakeback program as described above is also known as a 'flat rakeback'. By contrast, a variation on the flat rakeback program is called a "progressive rakeback". In the case of these types of programs, the percentage of the MGR each player gets in rakeback is different, based on how much rake each player paid into the pot. For people simply trying to make a profit using rakeback programs (the topic of yet another companion article on this site), a progressive rakeback scheme is detrimental. For honest-to-goodnes poker players, however, a progressive rakeback could be an attractive hedge against losses, and a nice bonus to wins to boot.
Now that you've learned how rakeback is calculated, you're ready to begin comparing and contrasting the rakeback programs of various online poker rooms to find the best rakeback offers out there for you. Read our companion article on the subject for an even bigger leg up in the game.
And as always, good luck!!!
More great Rakeback Resources from Treasure Hunter Poker:
