How Casinos Make Money
An increasing number of online casinos appearing on the internet every year is a good sign that online gambling is a profitable business. On the other hand, more and more people from all over the world get in touch with the online gambling and even more are likely to become regular real money players.
This general trend is followed by new providers that create seductive games to satisfy the need of a growing gambling community. Apparently, everybody is happy.
Some players win, some players lose, but that is something that gives charm to the gambling anyway. However, the logical question would be: how online casinos make their profit having in mind large jackpots won by some lucky punters? In this article, we will look at how casinos make money and what a player can do to make some profit of his own.
House Edge and Payout Percentage
Some of our visitors have asked us if they can be sure online games are fair. They doubt the games are random and that their creators arranged them to cheat on the players. While it is reasonable for someone who has lost lots of money on the online gambling to feel he had been treated unfairly, things do not work that way.
Online casinos, actually, do not need to cheat on their players in order to earn decent profit. Every single real money game you can find at online casinos gives a statistical advantage to the house, which means casinos will make the money in the long run no matter how high individual payouts may be.
This advantage is called the house edge and it is expressed as the percentage of the players’ original bets. Each game has a built-in house edge or house vigorish, which is fixed when counted on countless number of bets. Individual players, however, can win and lose huge amounts of money playing exactly the same game.
Opposite of the house edge, the payout percentage shows how much money is returned to the players. These two values, the house edge and the payout percentage total 100%. Therefore, if the house edge for a particular game is 2.5%, the payout percentage is 97.5% and vice versa.
The theoretical payout or the theoretical return to player (RTP) is commonly used at online casinos to show how much a single game pays back to the players. You have maybe heard some urban legends about casino games with zero house edge, but that is really a myth. How Casinos Make Money? Casinos are in the business for money and nobody would place a game that brings them nothing at the lobby.
Highest Payout Games
The house edge varies extremely with the game, so it is important to look for the game the lowest house edge. Additionally, different bets within the same game give different house edge. Therefore, go for standard bets and avoid side bets if you want to reduce the risk and make more profit in the long run. Simple card games like blackjack and baccarat have very low house edge – 1% to 1.5%.
The previous is true as long as you play the game optimally and stick with standard bets. The house edge can fluctuate seriously depending on the strategy applied by the player. Blackjack with liberal Vegas rules can be found in the gambling literature as the game with the lowest house edge – 0.28%.
Baccarat offers 3 main bets and each of them has different house edge. Betting on the Banker or the Player seems quite reasonable, since their house edge is 1.06% and 1.24% respectively. However, the Tie bet has a house edge of 14.4% and, although it pays 9:1, it will make you lose your money sooner if you use it on a regular basis. This is only one example, but the point is the same for all other games.
If you enjoy rolling a dice, you will be glad to hear that your favourite game comes with some of the best paying bets. ‘Don’t Pass’ and ‘Don’t Come’ bets have a house edge of 1.36%. Those who are into games of skill may try Pai Gow Poker and expect a very low house edge of just 1.46%. The European (single-zero) Roulette has the house edge of 2.70%, while its American (double-zero) counterpart is not even close – 5.26%. If you want to waste your money in no time, opt for keno – this lottery-like game often comes with 20% house advantage or even more.
Slot games are the most popular at online casinos, but do not offer the highest payouts. Usually, slots have a house edge between 3% and 6%, but you can find many of them with lower and higher house edge percentages. Keep in mind that, just because a particular slot game has more pay lines or more bonus rounds it does not necessarily pay better.