How Do Casinos Make Money?


A casino is a gambling establishment that offers a wide variety of games and entertainment. It also features restaurants, hotels and even shopping centers. While musical shows, lighted fountains and other attractions are used to lure gamblers in, the vast majority of a casino’s profits come from its gambling operations. Slot machines, roulette, blackjack and craps bring in billions of dollars for casinos every year. This article looks at how casinos make money, the history behind these famous gambling facilities and what you should expect if you ever visit one.

Casinos make their money by taking a built-in advantage on all bets placed within them. This advantage can be very small, less than two percent on average, but it is enough to earn a casino millions of dollars over time. The house edge can vary between different types of gambling. In France, for example, casinos reduce the advantage of their roulette games to under 1 percent to attract small bettors, while American casinos charge a 1.4 percent rake on all machine play.

The first casinos sprang up in Nevada during the mob’s heyday in Reno and Las Vegas, as organized crime figures provided funds for them. When they began expanding into other states, legitimate businessmen were reluctant to get involved in them, due to gambling’s seamy reputation. Real estate investors and hotel chains, with deep pockets, eventually realized they could make a lot of money through casinos. Mob control was loosening, however, and federal crackdowns and the threat of losing a gaming license for even the slightest hint of mob involvement forced casinos to distance themselves from organized crime.