Even experienced players often don’t know what Netrake means and how it is calculated
The topic of Netrake comes up more often and it causes confusion among some poker players. Since we are asked about it most times, we have decided to write a separate article about the topic “Netrake”.
A player has nothing to do with the Netrake. The Netrake is crucial for us as an affiliate because we are paid based on that. Since this applies to every affiliate, different deals/races/promotions are rated based on a player’s Netrake.
How is the Netrake calculated?
The calculation of the Netrake is very simple. You take the generated rake and subtract all costs. However, minor differences are depending on the poker room, as there are certain costs that some poker rooms do not deduct and pay for themselves, while others deduct everything.
We’ll just take a small example of GGPoker
Rake (after deducting PVI) – Fish Buffet (Rakeback) – Welcome Bonus – Transaction fees = Netrake
Now also lets take a look to Natural8. They are in the same network but the calculation is different(They changed it on the 01.01.2020)
Rake (after deducting PVI) – Fish Buffet (Rakeback)= Amount – Welcome Bonus – Transaction fees = Netrake
We will also take PartyPoker as an example and have a comparison.
Rake – Weekly Rakeback – Welcome Bonus – Transaction fees – All promotions – Tax (depending on the country) = Netrake
At PartyPoker, you see the calculation is a little bit different regarding the Netrake, so roughly the same, but there are a lot more things deducted than at GGPoker for example, but there is no PVI at PartyPoker.
The sites are also completely different when it comes to fees. Fair operators take 2.5% for every transaction via Skrill / Neteller, others maybe take 4-7%. Regarding this topic, we recently had an article about the hidden costs that an affiliate has to pay.
The Netrake decides how much an affiliate earns and how many spaces they have for exclusive promotions/deals
Many players always think that an affiliate earns crazy money if a player generates a lot of rakes. Sure, if you do not know what is always deducted and that the affiliate only gets a certain share of the Netrake and not everything, you will get a wrong impression.
Everything has to be calculated very well and it is, therefore, an advantage for many affiliates if certain promotions, such as our GGPoker/Natural8 Rake Chase, is calculated and paid based on the Netrake.
Often, there are also normal rake races such as our 25k Main Rake Race, where not the Netrake but the normal rake is counted. The calculation for the affiliate is the same in the background and therefore, a race must not offer too much value for the player, otherwise, you can slip into the red numbers. This happens even more often than you think, especially at the beginning when players also have a welcome bonus and there are special promotions from the poker room which offer them additional value.
If the Netrake is negative, the affiliate will be subtracted somewhat
What many don’t know is that a player’s Netrake can also be negative. If the cost and Rakeback are higher than the rake generated, the Netrake is negative. In this case, an affiliate has to pay the same amount as he would get if the Netrake was positive.
Again a simple example: Let’s say the affiliate gets 30% of a player’s Netrake. If a player’s Netrake is $100, the affiliate will receive $30 commission. If the Netrake is -$100, the affiliate pays $30.
The more Rakeback a player gets from the poker room through the normal VIP system and promotions, the smaller the profit margin for the affiliate. Even if a promotion is based on a player’s Netrake, the affiliate would not have to pay out anything to the player, but would still make a loss.
In the long term, the Netrake is always a plus for all players, but especially at the beginning or for players who only jump from side to side to play different promotions and constantly deposit and withdrawal.