How Do Casinos Make Money?


Whether you like to spin the slots, lay it all on the roulette wheel or throw dice at a craps table, casinos are the place to satisfy your gambling urges. The modern casino has all the trappings of a luxury resort, complete with restaurants, free drinks and stage shows, but it would not exist without games of chance. Slot machines, blackjack, poker, baccarat and other tables of chance produce the billions in profits that draw millions of gamblers to the casino each year.

Casinos are found around the world, from the glitzy strip in Las Vegas to the quaint clubs on the French Riviera. Some have a reputation for being seedy and criminal, while others are the epitome of glamor and opulence.

The casino concept evolved in Europe as people tried to emulate the opulent and luxurious palaces of the ancients. By the 20th century, most European countries had changed their laws to permit casinos. In the United States, the first casino opened in Atlantic City in 1978, and more followed, including several on American Indian reservations, which are exempt from state anti-gambling laws.

A key to casino success is the ability to attract high-rollers, which is why many offer special rooms and services for those who gamble in a big way. These “comps” include hotel room upgrades, restaurant and show tickets, and even airline seats and limousine service. The casino earns a significant portion of its profit from these players, and it is important to keep them happy.

Something about the atmosphere of a casino encourages people to cheat, steal or otherwise try to game the system, and this is why casinos invest so much time and money in security. Dealers are trained to watch out for blatant cheating such as palming, marking or switching cards, while pit bosses and table managers have a broader view of patrons and can spot betting patterns that indicate cheating.

There is no single answer to the question of how casinos make their money, but it includes a built-in statistical advantage for the house in each game and the millions of bets placed by patrons. The edge can be very small, but it adds up to a substantial sum over time, which is how casinos justify their elaborate hotels, fountains and replicas of famous monuments.

Despite the seamy reputation of some casinos in the past, most are run by legitimate businesses with deep pockets and a desire to avoid any hint of mob involvement. This has been aided by the federal government’s crackdown on organized crime and the threat of losing a license to operate a casino at the slightest whiff of illegal activities. Casinos also use technology to help monitor their operations. For example, chip tracking allows the casino to monitor betting chips minute by minute and quickly notice any deviation from a normal pattern; roulette wheels are electronically monitored to discover any statistical anomalies. Some casinos also employ robots to oversee video poker machines and other games.