How Online Casinos Make Money

In gambling, an old saying says, “The house wins every time.” The casino will make money no matter what game you play.

How do online casinos make their money exactly?


Start by looking at what revenue sources online casinos have:

House Edge

The house edge is how much a casino expects to make from every bet on a specific game.

If a player wagers $100 on the color red, there are 18 slots in red, 18 slots in black, and one green slot. The player will receive $100 if 18/37 of the bets are successful. However, 19/37 chances will lose, and the $100 bet is lost.

For calculating the expected value, we use this formula: EV = (win x probabilities) + (loss x probabilities)

Plugging that equation into our numbers looks like this: EV = (100 x 18/37) – (-100 x 19/37)

EV = (48.65 + 51.35)

EV = $2.70

This means that the house edge is 2.70%. This profit is what casinos make per day.

This equation will help you determine the house edge of any casino game. It also gives you a good idea of which games to play. All casino games do not have the same house edge, and all bets within the same game will not have an identical house edge. Here are the lowest house edges possible for the most popular casino game (assuming no edge play):

Blackjack House Edge – 0.5%

Baccarat house edge: 1.06%

Craps house edge is 1.36%

European Roulette (single zero) house edge – 2.70%

American Roulette (double zero) house edge – 5.26%

Over the long term, these margins add up. In our roulette example, the expected value of a $100 wager is $2.70. Let’s say that the total red/black roulette bets for a given day were $1,000,000. Their expected value would be $27,000. This is just one type of bet in one game.

Poker Rake

Hosting a poker tournament is another way for the casino to make money. A casino charges a fee for hosting a poker tournament. The casino charges this fee, also known as the rake.

The fee is charged in various ways, depending on the type of game being played. Cash games will take a percentage of the pot or charge a set amount per half-hour if you want to continue playing. Rakes are similar to Vigs, the cut taken from a bet on sports betting. Sportsbook operators make money by using vigs. Poker operators also profit from rakes.

You’ll often see a rake of 5% with a cap of $7. When the poker hand sees the flop, the casino can take up to $7 from a pot.

If a $70 bet is made in this structure, the casino will keep 5%, or $3.50. If $700 is wagered in this rake system, 5% would be $35. This is over the cap, so the casino will only take $7.

When playing in tournaments, the rake is a percentage of your buy-in. The rest will be added to the prize pool.

If the buy-in for a tournament is $100, the advertised price will typically be $85 + $15 – which means that $15 of the money will go to the host, and the remaining $85 goes into the prize pool.

These numbers may seem small, but if there are 500 players in the $100 tournament, the casino will take $7,500 as a rake.

How Online Casinos Keep Making Money

How do casinos keep us playing their games when we know they will always win?

Play Free Slots Online

Some of their games, like slots, are free to play. You can’t make money playing these games, but online casinos hope you will hit the “jackpot” and think, “Man, if this were for real money,” encouraging you to play slots with real cash.

When playing for fun, it’s much easier to lose fake money. Players tend to forget their losses and focus on the “jackpots” they have won. When they begin to play with real money, players quickly learn how many spins it took to reach their jackpot.

Online Casino Bonuses

Bonuses are another way that casinos attract players. These offers, such as wagering $20 to get $100 free or betting $10 and get $50 for free, seem too good to be accurate. It’s often the case.

These bonuses may seem attractive, but they are less lucrative than you think. Bonuses are often tied to a ” wagering requirement,” meaning you cannot deposit $10 and withdraw $50. It would help to wage the “free” cash before getting it. These wagering requirements are often as high as 100x or 40x the bonus amount!

If you receive $50 for betting just $10, then you must play at least $2000 to be able to withdraw that money. Bonuses have a high wagering requirement and are powerful promotional tools. They encourage players to play casino games.

Online Casino Affiliate Program

Affiliate programs are similar to bonus offers, but they have players run the promotions instead of the casino. The casino will offer a special on a wager or better odds on specific lines and encourage the players to get their followers to join. Playamo Affiliate Program pays out its partners on the 1st day of every month.

Affiliates get a share of the casino’s revenue from players who sign up. The players also benefit as they can take advantage of the special offer.

Online Casinos: What are the costs

Online casinos incur expenses, even if they seem like a way to print money.

License Fees

An online casino must be licensed to be considered reputable in certain jurisdictions and offer real-money games. The licenses aren’t cheap, and the higher a request is regarded, the more expensive it will be.

A license from Gibraltar, one of the most reputable gambling commissions in the world, can cost an online casino between $30,000 to $70,000, depending on their company structure and type. This license is valid for five years and requires an annual extension fee of $2800. Not something you can do in your bedroom.

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