How the House Always Wins: Online Casino Profitability Explained

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2021-12-24

Eddy Cheung

Have you ever wondered how casinos and bookies stay afloat despite those mammoth jackpot wins? Like any other business, casinos are supposed to bring home maximum profits no matter how much you win.

How the House Always Wins: Online Casino Profitability Explained

Everything is designed to encourage players to spend more funds. No wonder they say that “the house always wins.” So, this article uncovers the intrigues behind casino profitability.

How the house always wins

As said at the beginning, casino games are designed to give the house potential profits. And this applies whether the player wins or loses the bet. It’s more or less the inbuilt profit for the casino. So, no matter the type of online casino game you choose, the house edge is a necessary “evil” you must get accustomed to.

To put it into a simpler perspective, consider a slot machine with a 4% house edge, for example. Such a game gives a total RTP (Return to Player) rate of 96%. This is essentially the maximum percentage a player can take home if things go their way. Sticking with the rate above, a player who bets $100 will get a maximum win of $96, with $4 going to the house. So, whether you lose the bet or win it, the house won’t go out of business.

But even if you’re playing a casino game with a 0.5% house edge, note that the game will only be profitable in the short term. Playing longer will only grind you down into unprofitability. Knowing this, most online casinos will kill to keep players playing longer. Most beginners get carried away with free bets, not knowing that the house edge applies.

Why do people still gamble anyway?

Up to this point, it’s evident that the house will always walk away the winner. But still, most gambling sites generate massive traffic in a day. Why is it so?

First, if gamblers weren’t winning bets, the industry would be dead by now. Although the house always wins, some players make money from betting. Some even fund their lavish lifestyles from a betting career. The thing is that gambling is mostly about luck and a bit of skill. So, expect a Mega Moolah windfall as long as you placed a bet.

Another reason why people bet is to have fun. Casinos are known for their insatiable greed, which isn’t bad after all. It’s just business! They employ effective marketing tactics to help attract and keep players. Every aspect of their games, including sound effects, image quality, and bonus promotions, is designed to be addictive.

Something about probability theory

Want to know how players make their wins, on the other hand? Then learn something about the concept of probability in gambling. Probability is the ratio of the envisaged outcome versus the total outcome. For instance, you want to pick out an orange from a bag with six bananas and one orange. If that’s the case, the ratio of getting an orange is 1 in 7.

But how does probability apply in gambling? If you’re playing on a European roulette wheel, you’ll get 37 pockets numbered 1-36. There is also a single zero pocket. In that case, the probability of landing on one of the pockets is 1 in 37 or 2.7%. Suppose you choose Red/Black, the outcome probability is 18/37 x 100%. This gives you a probability rate of 48.65%.

How to win at online gambling

If you’ve decided to play casino games, learning how to win is paramount. First, always practice bankroll management. While going on a winning spree is definitely fun, remember that losses are more common than wins. For this reason, create a gambling bankroll and divide it into smaller units. The main idea is to only wager with about 5% of the bankroll per session. Exceeding this rate can see you go bust in just a few hands.

Second, quit while still ahead. As discussed above, the house edge will always ensure you lose in the long run. So, to be safe, walk away after adding a certain percentage to your bankroll. This can be 10%, 20%, 30%, and so on. It’s the only way to leave the casino with a win. Don’t be tempted to double your bets, hoping to recover losses.

Above everything else, choose the games wisely. It’s better to play a game with a low house edge than one that will eat through your entire bankroll quickly. A good example is a roulette wheel.

Most gamblers prefer the European wheel is because it offers a lower house edge than the American variant. And if possible, learn to play skill-based games like poker and blackjack, as they allow room to reduce the house edge with an optimal strategy. Nonetheless, play for fun.

Best gambling quote: “Gambling is not about how well you play the games, it’s really about how well you handle your money.”

Favorite Casino Game: Blackjack

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