Texas Hold'em: House Edge and Hourly Cost

Texas Hold’em is two different games sharing one name. In poker Hold’em, players bet against each other and the house takes a rake from each pot. In Casino Hold’em and Ultimate Texas Hold’em, players bet against the house and the house edge is fixed by the rules. The distinction decides what the game costs. This page derives both costs from the payout tables and the number of outcomes, then converts them to money per hour at a stated stake and round rate.

Poker Hold’em: the rake is the cost

In poker Hold’em, the house does not play a hand. It takes a commission, called the rake, from each pot. The rake is usually a percentage of the pot up to a cap. A common structure is 5% up to 10, with no rake if the pot is small. The rake is the only house edge in the game. Because players compete against each other, the expected value of a hand depends on the opponents, not on a fixed number. The rake is the one cost that is fixed by the house.

The rake is not a percentage of each bet. It is a percentage of the pot. If a player wins a pot of 100, a 5% rake up to 10 takes 5. The winner receives 95. If the pot is 300, the rake is capped at 10, so the winner receives 290. The effective rake percentage falls as pots grow.

To convert the rake to an hourly cost, the number of hands per hour and the average pot size are needed. In a live 1/2 game, a dealer may deal 25 to 30 hands per hour. If the average pot is 40 and the rake is 5% up to 5, the rake per hand is 2. At 30 hands per hour, the table pays 60 per hour in rake. With nine players, that is about 6.67 per player per hour. A player who wins 10% of pots pays the rake only on those pots, but the rake is taken from the pot before the winner receives it, so every player who contests a pot contributes to the rake in proportion to their share of the pot.

A player who folds every hand pays no rake. A player who wins many pots pays more rake. The rake is not a fixed cost per hand; it is a cost per pot won. The hourly figure of 6.67 per player assumes an even distribution of pot wins, which is not how the game works. A tight player may pay less; a loose player may pay more. The rake is still the house’s only revenue from the game.

Casino Hold’em: a fixed edge on the ante

Casino Hold’em, also called Hold’em Poker, is played against the house. The player makes an ante bet. The dealer deals two cards to the player and two community cards face up, then three more community cards after the player decides to fold or call. If the player calls, they make an additional bet equal to twice the ante. The dealer then reveals their two cards and the best five-card hand wins.

The house edge in Casino Hold’em is about 2.2% of the ante bet, under standard rules: a single 52-card deck, dealer qualifies with a pair of fours or better, ante bonus pays 10 to 1 for a straight flush, 20 to 1 for four of a kind, and 30 to 1 for a royal flush. The edge changes if the dealer qualification rule changes or if the ante bonus paytable changes.

The 2.2% figure is derived from the probability distribution of all possible outcomes. The player’s expected loss per ante bet is 2.2% of the ante. The call bet has a different edge. The total expected loss per hand is the sum of the expected loss on the ante and the expected loss on the call, weighted by the probability of calling. The 2.2% is the edge on the ante only, which is the figure most often quoted.

Ultimate Texas Hold’em: a different game

Ultimate Texas Hold’em is a separate game with a different structure. The player makes an ante and a blind bet of equal size. The player may raise before the flop, after the flop, or after the turn. The house edge depends on the player’s strategy. With optimal strategy, the house edge is about 2.2% of the ante. With a simple strategy, the edge is higher. The game is not the same as Casino Hold’em, and the two should not be confused.

Hand rankings

Hand rankings are the same in all Hold’em variants. From highest to lowest:

1. Royal flush: A, K, Q, J, 10 of the same suit.
2. Straight flush: five consecutive cards of the same suit.
3. Four of a kind: four cards of the same rank.
4. Full house: three of a kind plus a pair.
5. Flush: five cards of the same suit, not consecutive.
6. Straight: five consecutive cards of mixed suits.
7. Three of a kind: three cards of the same rank.
8. Two pair: two cards of one rank and two of another.
9. One pair: two cards of the same rank.
10. High card: the highest card when no other hand is made.

In poker Hold’em, the best five-card hand from seven cards wins. In Casino Hold’em, the player’s best five-card hand from their two hole cards and the five community cards is compared to the dealer’s best five-card hand from their two hole cards and the same five community cards.

Worked calculation: hourly cost in Casino Hold’em

Assume a player makes a 10 ante bet on every hand. The house edge on the ante is 2.2%. The expected loss per hand on the ante is 10 × 0.022 = 0.22. The player calls on about 60% of hands, making a call bet of 20. The house edge on the call bet is about 1.5% of the call bet. The expected loss per hand on the call is 20 × 0.015 × 0.60 = 0.18. The total expected loss per hand is 0.22 + 0.18 = 0.40. At 40 hands per hour, the expected loss per hour is 0.40 × 40 = 16.00.

If the player never calls, the expected loss per hand is 0.22, and the hourly loss is 0.22 × 40 = 8.80. But folding every hand is not a valid strategy because the player forfeits the ante. The call bet is mandatory to stay in the hand. The 16.00 per hour figure assumes the player calls on 60% of hands, which is close to optimal.

The call bet edge of 1.5% is an approximation. The exact edge depends on the dealer’s upcard and the player’s strategy. The 2.2% ante edge is the more stable figure.

Worked calculation: hourly cost in poker Hold’em

In a live 1/2 game with a 5% rake up to 5, assume 30 hands per hour and an average pot of 40. The rake per hand is 40 × 0.05 = 2.00. The total rake per hour is 2.00 × 30 = 60.00. With nine players, the average rake per player per hour is 60 / 9 = 6.67. A player who wins 10% of pots wins 3 pots per hour. The rake paid on those pots is 3 × 2.00 = 6.00. The difference between 6.67 and 6.00 is because the average player wins more than 10% of pots in a nine-handed game; the average is 11.1% if all players are equal. The rake per player per hour is not a fixed number; it depends on how many pots the player wins.

What people get wrong

The most common mistake is treating poker Hold’em and Casino Hold’em as the same game. They share hand rankings and the name, but the cost structure is completely different. In poker Hold’em, the house takes a rake from pots; in Casino Hold’em, the house has a fixed edge on the ante. A player who reads a 2.2% house edge and applies it to a live poker game will underestimate the rake. A player who reads about a 5% rake and applies it to Casino Hold’em will overestimate the edge.

The second mistake is assuming the rake is a fixed cost per hand. It is not. The rake is taken from the pot, so it is a cost per pot won. A player who folds every hand pays no rake. A player who wins many pots pays more. The hourly cost is an average, not a per-hand charge.

The third mistake is thinking that a larger pot size reduces the rake percentage. It does, because of the cap, but the cap is not a benefit to the player. The cap limits the house’s take, but the player still pays the rake on every pot won. The cap does not change the fact that the rake is a cost.

The fourth mistake is believing that hand rankings determine the winner in Casino Hold’em. They do, but the dealer must qualify. If the dealer does not qualify, the ante bet is paid even if the dealer’s hand is better. This rule changes the edge. The 2.2% figure assumes the dealer qualifies with a pair of fours or better. If the qualification rule is different, the edge is different.

Table: conditions that change the figure

FAQ

What is the house edge in Texas Hold’em? In poker Hold’em, there is no fixed house edge; the house takes a rake from each pot, typically 5% up to a cap. In Casino Hold’em, the house edge is about 2.2% of the ante under standard rules. In Ultimate Texas Hold’em, the edge is about 2.2% of the ante with optimal strategy.

How much does it cost to play Texas Hold’em per hour? In a live 1/2 poker game with a 5% rake up to 5, 30 hands per hour, and an average pot of 40, the table pays about 60 per hour in rake, or about 6.67 per player per hour with nine players. In Casino Hold’em with a 10 ante, 40 hands per hour, and a 60% call rate, the expected loss is about 16 per hour.

What are the hand rankings in Texas Hold’em? From highest to lowest: royal flush, straight flush, four of a kind, full house, flush, straight, three of a kind, two pair, one pair, high card. The rankings are the same in all Hold’em variants.

Is Casino Hold’em the same as poker Hold’em? No. In poker Hold’em, players bet against each other and the house takes a rake. In Casino Hold’em, players bet against the house, which has a fixed edge of about 2.2% on the ante. The hand rankings are the same, but the cost structure is different.

Does the rake cap help the player? The rake cap limits the house’s take on large pots, so the effective rake percentage falls as pots grow. But the player still pays the rake on every pot won. The cap does not eliminate the cost; it only limits it.