How Does A Casino Make Money?

Being some of the world’s biggest exchanges for assets and money, providing high-stakes games and huge winnings paid out to the victor. With companies that can afford payouts of thousands of pounds each day, it provokes questioning as to where the money originated from in the first place and how they manage to maintain such high revenue intakes annually when they give such vast portions of their money away.

In order to resolve any confusion surrounding this topic, we’re going to delve into this topic and understand how casinos earn and sustain their money.

Hotels and Bars

Physical casinos that boast huge land coverage often have a hotel attached to their building which allows them to facilitate the stay of gamblers. These hotels are often decadently grand and charge large sums of money for a brief stay, and with many gamblers regularly taking trips to temporarily reside in these hotels - the profit can be proportionate.

Also with many casinos showcasing top-of-the-range bars and emphasising the quality of their service through onhand waiters and an extensive array of drinks, casino bars are able to become a statement piece of each casino.

With such facilities readily available, casinos frequently invest large sums of money into these assets to keep them appearing architecturally beautiful and to ensure that the staff within these quarters are cordial. This allows them to draw in more customers and exhibit the grandeur of their services - which is a quick way to encourage returning customers and to amass a profit.

Restaurants

A top-of-the-range casino isn’t complete without an expensive restaurant that serves up a vast array of beautifully cooked meals that resemble sous chef quality. These restaurants often offer room service to those residing in the hotel accommodation, which creates a quick way of earning money due to the convenience of an onsite restaurant and room service for some temporary residents.

By supplying high-quality meals and allowing customers the opportunity to experience cuisine they may not be able to access at home or in other dining establishments, casinos provide a well-rounded experience that allows them to profit from the amenity spend of customers.

Immersive Experience

There’s truly no experience comparable to that of a casino. With a lack of windows and clocks and a high-energy environment full of music, colours, and sounds, the casino has a habit of sucking players into their experience and allows them to lose track of time.

In doing so, casinos are able to encourage players to continue enjoying themselves by providing barrages of distracting factors that encourage them to keep gambling and to immerse themselves with the big wins and the high-stakes environment.

This tactic is used to try and get as much money spent by the gamblers as possible - which is a staggeringly effective tactic. With casinos fundamentally being businesses underneath the fun and cheer, their desire to keep gamblers involved in the environment is so that they can get players to try the complimentary drinks and food to get inebriated and start taking riskier dives into the gambling pool.

The riskier the players, the better the profit for the casino.

Free Drinks

Often this is a clever tactic enforced by casinos to try and provide all customers with an unlimited supply of free drinks throughout the night. This is often enforced by waiters and waitresses continually collecting glasses and requesting orders, which encourages gamblers to indulge in some liquid gold and prepare to maybe make (or lose) some gold of their own.

However, those who aren’t too sensible with their alcohol may fall into the trap of drinking too much and becoming inebriated, which can lead to placing expensive bets on games and potentially losing that money.

It is important that when you visit a casino, that you are able to manage your drink and ensure that it doesn’t lead you to any compromising position.

The Handle

Moving away from the often stunning amenities provided on casino grounds; the games are their primary source of income.

A ‘handle’ is essentially the total amount of bets placed in a game from the participants, and it plays a crucial role within every type of casino game. For example, in table games, participants place their bets using chips which are then held at the center of the table - this is the handle.

However, the handle is not the ‘drop’, which is often a metal drop box at the edge of table games where players of games such as Blackjack slip their notes and chips. The term can be used interchangeably yet in this context ‘the handle’ is what causes the casino to reap exponential profits.

The money in the handle can either end up in the pocket of the gambler or the casino, depending on the luck of the game.

However, the handle is affected by factors such as the casino increasing their house edge, with casinos can often do if there are more players and more bets placed into the handle. This is often a variable driven by the amount of time spent playing the game and the average bet - hence why so many casino games are focused more on the length of your play, as opposed to your wins or losses.

Also, particularly within affluent casinos, there is always a high set minimum stake that must be placed on each game. Seldom will you find a Blackjack or Poker game where you can deposit only £5 and begin playing, as the money is often brought up to attract wealthy gamblers who can afford to lose and those who enjoy taking a leap of faith, regardless of the outcome.

As these games ensue, due to the higher minimum stake, it often means that throughout the several hour’s courses of the game huge portions of money will be put into the game - which if it results in a loss, the casino could earn thousands of pounds without gamblers suspicion.

Casinos tend to avoid low limits on stakes, as this likely means that the money won’t accrue at a similar rate to that of high stakes games and they cannot profit at a comparable level for a game with a minimum deposit of £5 vs a game where the minimum deposit is £25.

The House Edge

Building more on the previous point, the house edge is essentially where a casino is at a statistical advantage in comparison to the players within the game. With this hypothetical variable in play, this is what makes the game a gamble above all else.

The casino wins the total amount of money they are left with at the end of a night of betting, this aspect of the house edge can often be categorised into two parts; the first being that the casino is left with a negative-sum, due to gamblers earning more money than anticipated; and the second being that they can reap in huge profits as more players lost.

However, casinos tend to have a percentage-based house edge on each game, whether it be machine or dealer-based, which is in an attempt to secure the wealth of the casino and not compromise their efforts to maintain their income.

For example, slot games are programmed so that 50% of the time players lose money, yet due to the fun and atmospheric experience when playing slot machines, they are able to encourage gamblers to play and be in a position where they are 50% likely to reap the profits.

The Bottom Line

Now that it has been ascertained how casinos make their money, it is crucial to recognise that whilst it is a fun and high-energy environment, they are often at a statistical advantage of winning against you and will try to encourage you to be a bit too over-generous with your stakes.

It is crucial to be savvy when visiting a casino, particularly if you aren’t in possession of financial assets you can safely lose without jeopardizing your financial health.

Yet above all, it’s most important to have fun when going to a casino. The experinece they provide is unmatched and will allow a once in a lifetime experience of enjoying an unparalleled environment.