In the most basic form, Casinos make money when the average payouts are lower than the income produced by the overall wagers.

Casinos Make Money

The house edge:

Every game in a casino is known as the house edge. It is the difference between the true odds of an event and the odds used by the casino for the payouts. In double –roulette, there are 38 numbers. The real odds of a number winning are one out of 38. Assuming you have bet $1 on that particular number, the odds would be 37 to 1, and the casino would have to pay you $38 including the dollar you have bet. However, the casino might choose to pay you $35 making the odds 35 to one. This difference is the house edge.

Let’s assume that a $1 bet is placed on every number in the roulette table. The total bets would be $38. No matter which number wins the payout will be just $36. But the house has collected $38. The balance $2 goes directly to the casinos’ pockets. If the house had paid the true odds, it would have paid $38. Now dividing the money that went to the casino by the true odds, it would have paid 2/38 we get the house edge of 5.26%. What this means is, the casino expects to retain 5.26 cents of every dollar that is bet at the roulette table.

The house edge will be different for each game based on various factors including the nature of the game. The casinos make the most when the players play for long hours, as each dollar they bet will bring more money to the casino’s coffers.

Casinos are Business:

Casinos are business, and as with the case of all businesses, the owners strive to make a profit. All the games in the casinos are structured in such a manner that the rules will always favor the house. In the case of blackjack, the dealer gets to play his hand last, and if a player goes bust, the dealer wins immediately. Hence with the odds tipped in its favor the casinos makes lots of money while giving out just enough to keep the customers interested.

In some games, the casinos just get a commission and do not face odds themselves. For example in poker, the house plays the dealer but does not play a hand. So it takes a percentage of the bets or charges a flat fee.

Going by the examples, it is clear that the casinos make more money when the players gamble for long hours; to keep them at it the casino offers free drinks and sometimes meals. Alcohol can loosen inhibitions and tempt the players to lose everything in the hope of winning.  Though the house edge is calculated at lower percentages, the casinos usually expect to make a profit of about 15 to 20 percent of all the money that is bet at its tables.