How Casinos Ensure Profit: House Edge Explained

Learn what house edge means in casinos and how they ensure that they profit from their business.

by Mcdonald Elisha Mutumwa
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How Casinos Ensure Profit

How Casinos Ensure Profit: Casinos are highly profitable businesses, and if there is any certainty in Casinos, it is that the odds are always in favor of the casino. This is known as the “house edge”. Whether the game is roulette, slot machines, or blackjack, the house edge is one thing that remains constant.

The casino runs on the model that ultimately the casino has to profit while still letting the casino players win in the short run. It is a mathematical advantage that is present in every casino game, and only customers who know the best strategies are able to go around it with the application of an optimal level strategy.

According to various studies, including one by the Wall Street Journal, it was revealed that just 13.5 percent of gamblers end up winning in casino games.

How Casinos Ensure Profit How Casinos Ensure Profit

Understanding House Edge in Casinos

  • In simple terms, “house edge” is what ensures that the casinos consistently profit over the customers in the long run and gives a built-in advantage to the casinos.
  • There is variation when it comes to house edge when it comes to different games. For example, blackjack has the lowest house edge, whereas keno has the highest house edge.
  • What the house edge does is that it reduces the chances and size of the potential payout to the casino customers.
  • House Edge ultimately represents the average gross profit that can be expected to be made by the casino from each game reliably.
  • In some games, the casino might be making a larger profit, going up to 15-40 percent, whereas in other games, it might just be making a meager profit of 0.5 to a little over 2 percent.
  • Video poker is another game where gamblers have the best chances of winning in general.

Impact of House Edge in the Longer Run

The longer a customer plays, the more quickly the result of his play will match up to the house edge. However, ultimately, the house edge is sure to beat the player down to unprofitability.

READ MORE: Glossary of Casino Terms Every Beginner Should Know

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