There is hardly a person out there who is unaware of the adage that, in gambling, the house always wins. It is as old as casinos themselves, and the entire gambling industry has been built on this premise.
The house always comes out ahead in the long run, but there are many misconceptions and myths about why this is the case. From cheating allegations to some pretty wild conspiracy theories, you will find all sorts of imaginative explanations for the casino edge.
As entertaining as these may be, the real explanation of how online casinos make money is simple and entirely based on math and probability. Things are set up in a way where gambling operators do not need to cheat or trick players in any way. They need them to keep playing often and for as long as possible.
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How Online Casinos Ensure Profits
From a player’s perspective, gambling is an activity with two possible outcomes — you either win or lose on any given day, session, or even a single spin on a slot machine. So, it seems like a fair deal if you do not know how casinos make money.
Sometimes you win, sometimes you lose, but ultimately, it is down to luck.
This is not how things work for online casinos, though. For them, luck has nothing to do with it, at least not in the long run. Some players will win on any given day, and some will even win big now and again, but this changes nothing.
As long as the casino operates within acceptable risk margins (depending on the amount of money they have available), it will always come out ahead for one very simple reason…
Casino Odds Are Not Fair
When you play a hand of blackjack, you will win quite frequently. You will also lose often. The frequency of winning and losing hands over a significant sample will be almost 50/50 — almost, but not entirely.
Blackjack has always been designed to give the casino a slight advantage. Even if you play perfectly, the house will always have about a 0.5% advantage. The more hands are played over time, the more relevant this percentage becomes. It is a numbers game, and the numbers are on the casino’s side.
The house edge is even more significant if we look at another popular game, roulette. On every spin, you are more than a 3% underdog. It does not matter if you catch a lucky streak now and again; the more spins you play, the closer you will get to that number, where for every $100 wagered, you are losing $3.
When it comes to slot machines at brick-and-mortar establishments, things can get pretty wild, as there are games out there that retain a house edge as high as 20%. With online casinos, things are usually not as bad, as an average slot will have an RTP of 92% to 97%. Keep in mind, however, this house advantage is active on every single spin, and you can play a lot of spins in as little as 30 minutes.
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It All Adds Up
These numbers may seem small and insignificant, but if you consider the number of players playing at any given moment at an online casino for real money in the US, you will begin to see the big picture. And this math has been tried and tested, so casinos have nothing to worry about.
After enough time has elapsed, enough roulette spins have spun, and enough blackjack hands dealt, their profits will be right where they should be. The house always wins, and it wins at a pretty reliable and consistent rate, so there is not much of a gamble happening on the side of the casino.
It is a business with pretty reliable profit margins. Of course, some risks are involved, but that can be said for almost any business.
If you understand the house edge, you will understand how online casinos make money and why they do not need to utilize any nefarious tactics. They are guaranteed to come out ahead as long as enough players use their platform.
This is not to say that there are not a few bad apples out there. Some operators —particularly unlicensed offshore casinos — utilize underhanded tactics to boost their gains further, but this is never the case with licensed and regulated US casinos. They do things by the book, and that book has a very predictable ending — the house always wins!
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