How Do Casinos Make Money From Different Games?
Whether you’re playing at an old-fashioned brick-and-mortar casino or a cutting-edge online gambling site, one old saying always applies – the house always wins.
Some gamblers justify this by saying that casinos rig games and cheat their customers out of their money.
Others have a more responsible approach and understand that the gambling industry is simply another branch of business, and the casinos are in it to make money through legitimate business models.
This makes perfect sense, even at a glance. But, how do casinos consistently make money, and how can they afford to stay profitable even when they pay out multi-million wins?
With that in mind, if you’ve ever wondered how much money casinos make from the different games they host, we’ve got all of the detailed information, all in one place.
How Do Casinos Make Money?
If you were looking for the simplest possible answer to the question of “how do casinos work,” it would be that all casinos make money through the house edge.
This is all you need to know and a fact you can’t escape no matter where you play casino games.
The house edge is a built-in advantage the casino has in every game, except poker, but we’ll get to this later.
What the house edge means is simply that the casino always has better winning odds than you. This might sound unfair, but casinos have been operating like this forever.
The house edge is a long-term average that doesn’t really affect your experience during short sessions.
Instead, it’s measured in long periods of weeks, even months, and tens of thousands of wagers.
In view of this, the longer you play, the greater your chances of losing money will be.
Anyone can win a massive amount with a lucky game. But, in the long run, the house always wins and gets its percentage.
Although it exists in every game, the house edge can vary significantly between different casino games.
Because of this, some casinos are more favorable for your bankroll, while others should be avoided at all costs.
So, having this in mind, let’s take a look at how casinos make money from different games based on the house edge.
How Much Do Casinos Make From Blackjack?
Casinos make money from blackjack through the house edge that you can find in most gambling games.
But, since blackjack involves both a significant degree of skill as well as luck, we want to highlight it separately from other casino games that rely solely on luck.
For most casino players, blackjack seems like a game in which the house can’t possibly have the edge over them.
To go even further, most players think they can guarantee profits by playing it smart and learning the optimal blackjack decisions.
To be fair, this has been perpetuated over the years through the popularization of card counting techniques.
More precisely, a skilled card counter can not only eliminate the house edge but even obtain an edge over the casino.
However, this is unrealistic for most blackjack players, and the house edge is still very much a factor in blackjack.
Plus, counting cards will only get you so far before you get busted. And, while it is a skill-based game to a degree, you shouldn’t forget the element of luck in blackjack, as it always exists.
Keeping all of that in mind, what is the house edge in blackjack? The blackjack house edge is one of the lowest you can find in any casino game.
A skilled blackjack player can lower the house edge to just 0.5%. On the other hand, an inexperienced blackjack player will likely endure a house edge of around 2%.
If we were to put it in a real-life example, it means that for every $100 you wager on blackjack, the casino takes between half a buck and $2.
This might not sound like much, but when you consider that many players rotate at the blackjack table each day, the total profits that amount during working hours make blackjack one of the top-earning games for every casino.
How Do Casinos Make Money on Poker?
When discussing how casinos make money, it’s key to look at how these gambling establishments earn profits from poker tables.
This is because poker differs from all other casino games in this regard.
This difference is in the fact that you’re not actually betting against the casino when playing a poker game. In other words, the casino doesn’t have anything at stake, but it also can’t make money directly based on the players’ decisions.
Because of this inability to earn consistent profits through the house edge, the casinos collect a rake for every poker table they run.
A rake is a fee that can be charged in several ways. The most common form of poker rake is the pot rake.
Pot rake is when the casino takes a certain percentage of the pot after the end of each hand.
This can be anywhere between 5% and 10% in land-based casinos. It’s generally lower on online poker platforms.
Other ways casinos earn money from poker through rake are by charging hourly fees or fixed fees.
These are generally used in high-limit poker games to keep the games streamlined and not take too much money from the players.
How Much Profit Do Luck-Based Games Bring to Casinos?
Apart from the two above games that involve skill and strategy, the other top-earning games for the casino are exclusively luck-based.
And, as luck would have it, these games are also the ones that typically put the most money into the casino’s balance.
So, we’ll go over how casinos make money off of the most popular luck-based gambling games:
How Do Casinos Make Money from Slots?
Slot machines are by far the top-earning game for almost every casino, and you can find tons of them no matter where you play.
These games don’t involve any skill, and players can play them without any experience. You just spin the reels and wait to see whether you’ve won or lost.
This simplicity makes them super-popular among all types of players.
Casinos love slot players because slot machines are among the fastest games in the venue, and they can earn them the most money in the least amount of time.
So, let’s make a concrete example to see just how much money a casino can earn from one slot machine during 24 hours.
An average slot machine player can make around 600 or more spins per hour. If they make a bet of $1 per spin, they potentially risk up to $600 per hour.
In this example, we’ll assume that a slot has an RTP of 96%, meaning that the house edge is 4%.
So, provided that the player makes $1 bets and plays 600 spins per hour, the game is earning the casino a solid $24 every hour.
Multiply this by 24 hours, and you’ll get $576, provided that the slot is occupied all of the time.
Of course, there are other variables that play into the calculation, but this would be the casino’s profit from just one slot during a 24-hour period, averaged out over a longer timeframe.
Seeing that a bigger casino can have hundreds if not thousands of slot machines, we can’t imagine just how much cash they’re raking in just through slots.
How Profitable is Video Poker for Casinos?
Video poker machines are very similar to slots, with the exception of including poker elements into the standard slot game format.
These casino machines are also less popular than standard slots, meaning that they don’t earn casinos nearly as much money as the previous type of games.
Still, video poker machines are a steady earner for most online and land-based casinos. They have a very low house edge, often less than half a percent.
This makes them a sought-after game among gamblers chasing the best value when playing in the casino.
How Much Do Casinos Earn From Roulette?
Roulette is one of the easiest table games for casino players, as it doesn’t involve a lot of decision-making past the basic picking of the numbers you want to bet on.
Roulette is also a great earner for casinos as it has a fixed house edge they can rely on over time.
That said, the house edge on roulette games varies depending on the specific variation of the game.
For instance, European roulette has a house edge of 2.7%, while the American roulette version has a house edge of 5.26%.
From a player’s perspective, European roulette is significantly better, as the house edge is twice as lower than the one in the American version.
From the casino’s point of view, they’d prefer more players to wager on the American version, as it offers the same payouts but the odds are worse for you.
How Do Casinos Make Money From Craps?
Craps is a very interesting game in this context. This is because it can be a very player-friendly game in terms of the house edge, but it also has an unforgiving nature if you don’t choose your bets carefully.
More precisely, players who stick with simple bets like pass and don’t pass only play with a house edge of about 1.41% and 1.36%, respectively.
These bets rank craps as a very opportune game for gamblers.
On the other hand, the casino can earn considerably more money from inexperienced craps players that make certain single roll bets.
These bets have a house edge of around 16.67% and are very unfavorable for gamblers.
Is the House Making Money at Your Expense?
It’s no secret that there are more casino gamblers who lose money than those who end up winning.
So, taking this into account and the fact that the casino always wins, could you say that the casino is making money at your expense?
Moreover, do you really have any chances of making money in the long run?
To answer this, we’ll refer to a big study done a few years ago. Research done by people from the University of Michigan and the University of Connecticut followed 18,000 gamblers over a period of two years.
It showed that only 13.5% of these gamblers managed to win money from playing casino games.
In other words, the casino made money off of 86.5% of the gamblers included in the study. This massive number really puts into perspective how much money casinos rake in versus how often they have to pay out.
Even more so, if we dig up deeper into the stats, we can see that the casinos make most of their money from a small base of consistently losing players.
This should serve as a warning sign to always play responsibly and understand that the house always has the advantage in the long run.
Summing Up the Casino Business Model
Hopefully, this guide has brought the topic of how casinos make money a bit closer to you.
More importantly, hopefully, we also met our goal of educating you on the fact that the laws of probability are always in the house’s favor, as the payouts are lower than your winning odds.
Gambling can certainly be a fun pastime. But, if the stats and examples from this guide have shown us anything, it’s that the casino always wins and that you should only gamble what you’re willing to lose.
There’s no way to eliminate the house edge, which is the direct reason why the majority of gamblers end up losing more than they win.
While this is unfortunate, it’s still a part of the business. Casinos are in it to make money. In comparison, players who put their money into the casino hope that they are the lucky ones that will end up on the jackpot.
If you gamble frequently, you can look at the house edge as a negative interest rate on the investments you put into the casino.
They don’t impact you significantly if you keep tight control over them but can be costly over time if you’re not careful.