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     RakeBack Articles

How Bonuses Effect Rakeback
A common area of confusion for on-line poker players who receive rakeback, or are thinking about signing up for rakeback, is the effect that bonuses have on the amount of rakeback that the player will earn. Though different poker rooms have different policies, for the most part they all include bonuses in the same manner when calculating the revenue a player has created. There is a smaller rakeback payment because of a bonus that the poker room gives the poker player, but this payment, combined with the bonus, is always more than just the bonus or just the rakeback. The following will explain why a player wants to utilize rakeback and bonuses in order to increase their win-rate, and in effect, their bankroll.

Understanding how rakeback is calculated is not necessary in order to know the effect of bonuses on rakeback, but it would greatly increase the player's understanding of rakeback and, even, poker in general. An explanation of MGR (Monthly Gross Rake) and rakeback can be found in the article "How On-line Poker Rooms Calculate Rakeback." For our purposes here, if the reader understands that MGR is pretty much the 'revenue' the poker rooms consider a player to have contributed in rake and knows that the refund they receive, aka 'rakeback', is a certain percentage of their MGR, then the rest of this article will make sense (If not, reading the article mentioned above beforehand would be a good idea). The average percentage of rakeback offered is 35% and, for our purposes here, will be the percentage used.

The formula: ($MGR - $Bonus)*(RB%) = $RBPAY (where "$Bonus" is the bonus in dollars received from the poker room by the player, "RB%" is the percent of rakeback earned by the player, and "$RBPAY" is the dollar amount the player will receive) is a simple method that can be used to calculate rakeback for a given month.

If a player receives a $100 bonus from poker room A, has a MGR of $1300 at the poker room, and receives 35% rakeback, we can plug these numbers in the above formula, ($1300 - $100)*(.35), and see that the amount the player will earn in rakeback is $420. After the bonus is deducted from the MGR, the player's net MGR is $1200 ($1300-$100) and then her net MGR is multiplied by 35% ($1200 * .35) to receive the total rakeback payment she will earn. If she didn't take advantage of the bonus, her total rakeback payment would be $455 (the formula can still be used: ($1300-0)* (.35) = $455). Granted, her rakeback payment is $35 more than if she had received the bonus and rakeback, but she has actually earned $65 less (her total net earned from bonuses and rakeback, when a bonus is received, is $520) than if she had taken the bonus and rakeback. A player should never turn down a bonus because of rakeback and never turn down rakeback because of a bonus. The bonus and rakeback should always be taken advantage of.

If a player, as another and final example, earned $600 bonuses and $2000 in MGR, what would her rakeback payment be?: ($2000 - $600) * (.35) = ($1400) * (.35%) = $490 ; Her total rakeback and bonus would be $1090, which is more than double what it would be without rakeback (she would just earn the $600 bonus) and $390 more than if she didn't't take advantage of the bonus ($700 with only rakeback and no bonus). Clearly rakeback and a bonus is the best situation and offers the most positive expected value for the on-line poker player.

As a final note, not all sites deduct bonuses from MGR, but subtracting the bonus from MGR is the industry norm. Hopefully, in the near future, there will be a switch from this, but the present state of bonuses and rakeback is more than satisfactory to help increase the poker player's bankroll and win-rate.

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