How do online casinos make money?

Online casinos are cluttering up the Internet space, and yet many of them are still thriving and attracting online gamblers. Of course, some exit as they run through their money, but many online casinos make it big. The fact that online casino market is roughly $40 billion or $50 billion a year is a testimony to this.

Let’s see how online casinos make money

 

The handle

The pivot that drives online casinos is the Handle- which is the total amount of money that’s bet, regardless of the way the bet is made on the table. The Handle is a factor of many elements such as the average bet and the speed of the game. When all the slot machines are in use and when all the high bet tables are in play, the casino nets in money.

 

The house wins 2 percent of the total wagers made. When the average bet to increases and the action time of each gaming device is optimised, the casinos are on a roll.  A $750 total wagers (from six players) at slot machines wins $15 for casinos, while just one player at $25 table will net $82 for the casino in only an hour. Thus for casinos to maximise their income, it needs more people to play at its high bet tables than at its slot machines. No players at these tables translate into no profits.

 

Every bet isn’t a win

Gambling is mostly pure chance and every bet or deposit doesn’t and cannot produce a win. Even if casinos pay a significant amount to the winner, it’s always only a small percentage of what the casino gets from the other players. As the income produced by bets is much larger than the pay-outs, casinos invariably make a lot of money.

 

House Edge

When casinos offer odds, they have a house edge built into them. Though players may win initially, in the long run, the odds are stacked in favour of the house. In short, the house edge determines the average profit that the casino makes from a player’s bet. Not all games have the same house edge- games such as blackjack give the house small margins whereas other sports such as American roulette and slots are revenue boosters for the casinos.  The more the number of rounds you play, the higher are the chances that you will lose. At some point, player losses will be closer to the House Edge, and the casino stands to make a profit.  Greater the house edge and higher the number of players, more significant the advantage for casinos.

 

Running jackpots and prize draws

Everyone wants to win big and when online casinos run pots- some even run to millions. This tempts players to put their money in there, and a lot of them buy tickets- the casino lands up with more money than the actual jackpot prize. The same logic operates in case of a promotion or a game that they are offering- the hidden motive of making money by getting you to buy. Their deposit bonuses and other promotions are just ways of making you park your money with them, which over time, becomes theirs.

 

Casinos encourage players to play more and bet more and in the process get more. Even though winnings increase, the amount returned to players is negligible. Casinos prey upon the psychological makeup of human beings and lure them into doing something that will profit the house.

 

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