Have you ever wondered how do casinos actually make money? Where does the majority of their income come from? We’ll explore the topic in detail here and in the end you’ll have a better understanding on the subject, whether you’re a player yourself who is looking to lose less or a budding entrepreneur looking to start his own casino!
We have no illusion to know anything about the subject so we asked Edward Howarth of DashTickets for help, to shed some light on this. Edward is a lead writer for a gambling journal for New Zealanders that reviews games and casinos, and if anyone knows how they make money, it must be him. All of these live operators according to DashTickets are legit operations that let the player win and win a lot, but the mathematics of gambling as well as player psychology result with the old adage that the house always wins.
We must be careful here and say that the casino will, most of the time, end the day with a profit, whereas it is perfectly possible for many winners to leave the casino with a lot of money in their pockets. Some players win, but as a group, the players will usually record a loss.
House edge isn’t why the house wins…
Edward claims that the house edge isn’t why the house wins. For example, in live roulette the house edge is 2.70% on all bets. If someone would bet on all numbers, on both Red and Black, on both Odd and Even, no matter what he does he’d get 2.70% less than the money he put in.
As any gambler would tell you, he’d be lucky if he was only losing 2.70% of his bankroll when he’s losing. It doesn’t work like that, at least not from an individual player’s perspective. Something else is at play here.
…it’s the player psychology.
It turns out, the players themselves are responsible for the majority of their losses. As the players bob and weave their way through a game, try to come up with winning systems, progressive betting patterns that work, engage in superstitious rituals and magical thinking, try to identify hot and cold bets, they are shooting themselves in the foot.
These gambling habits are deleterious to the player’s money balance because they’re trying to make sense of something that is a random game that produces winners sometimes but also produces losers most of the time. Whereas the only reasonable way to gamble is to have a go at it and hope for nothing, many players have an intent to win – and these are the best customers for a casino.
Ok, but in the long run it’s surely the RTP?
If we talk about pokies, then yes, the theoretical return to player (RTP) is what makes sure that the house always wins. Take any popular pokie as an example, it has billions of spins spread across thousands of New Zeland players that played it that day.
The mathematics of the game, or the way the randomness of that particular pokie is set up, make sure that in the long run the house will always get to keep a share of the bets. In short playing sessions it’s possible to make money and walk away as a winner – as long as you know when to walk away.
Could it be that casinos make money from players who can’t walk away?
Bingo.
We can discuss the mathematics of gambling or of a specific game, and maybe even come up with a system that works and that can produce a winner in the short run. But even if we could do that, we still wouldn’t touch on the biggest reason why casinos win.
It turns out, when a person wins a large sum of money – large enough to make him feel good – instead of walking away and laughing his way to the bank, he does precisely the opposite. Since he already won some easy money so, it can be done, and in his head it’s blatantly obvious it can be done again, he continues playing.
As he continues playing, he inevitably falls prey to the mathematics of gambling, the RTP, the house edge, the fact that all games are set up to make money for the house in the long run. A player who continues playing for too long will inevitably lose.
And there you go – the one person that could have beaten the casino has made himself a loser too.
Conclusion
While the games themselves are set up to win money for the house in the long run, that’s not the main culprit. The casino would win money even if it offered a provably fair coin flip game. The real purpose of the house edge is to keep the game unexploitable, to keep the wolves from the door, to not have every cunning gambler out there pouncing on the poorly set up game. Blackjack is the closest thing to a fair game, and you don’t hear about big blackjack winners, ever, unless they were cheating.
Big wins happen. Life-changing wins happen. But to get them you must, first and foremost, have an active bet on the game precisely at the time when it ‘decided’ to pay up, and you must walk away as soon as you win.
We must now reveal that Edward Howarth, who helped us write this article, has a primary focus on player psychology and all his work for DashTickets stems from this basis, even when you don’t realize it. This is probably why DashTickets is such a popular site, because it focuses on the player, and the players feel it.