How Do Online Casinos Make Money?
When it comes to operating a gambling site, most players will probably wonder: “how do online casinos make money?” In most cases, there are three areas where the casino gets its funding from –player losses, the house edge, and free cash.
Of course, there are theories that it’s from scamming players, but that’s simply not true. Licensed and regulated websites are audited to ensure that they’re playing fairly. Still, some rogue sites are pretending to be legit, which is why we recommend researching before signing up.
With that in mind, let’s get into how casinos make a profit and what you should keep in mind.
How Casinos Make Money: Player Losses
Firstly, casinos bank on the fact that you’re playing a game of chance with odds of losing. Every casino game you play has a chance of losing, from table games to slots. While this is probably higher than your odds of winning, it’s a given.
Another way you can lose money is by playing the “free” games that have just been released. These games usually get several free spins you can claim and use. But, the casino is banking on you enjoying the game and playing past your free spins.
So, to make money, the casino needs you to lose enough while playing fairly and transparently.
House Edges, RTP & Commissions
Generally, a casino game has a “house edge” built-in, which returns a small percentage of each win or bet to the site. This is a formula used by game developers and websites that works out to about 5% of your winnings.
While it might seem unfair, it’s possibly the lowest amount a legal casino can take from its games. Usually, slots and roulette are the casino’s best moneymakers, because they have a higher built-in house advantage.
On slot machines, the house edge is called the return to player percentage (RTP), which is worked out over multiple games. However, this percentage doesn’t guarantee that you’ll get that percentage back on every spin. On average, the RTP should be between 85% and 98%, which should be advertised by the casino.
Free Cash & Casino Bonuses
Last but not least, casinos make money by offering bonuses or “free cash” to players. Included in these offers are wagering requirements, which average between 20 and 50 times your bonus amount added to your deposit.
So, you will have to bet those amounts as required if you claim these offers from the casino. Through the terms and conditions that you agree to, you have to meet these policies to cash out. That’s why we recommend reading through everything before you sign up.
Why Casinos Need to Make Money
So, why do casinos need to do all of this to make money? Well, if they didn’t, they’d go out of business faster than you could blink. To keep offering payouts, they have to have profits, and getting them is above board.
For trusted websites, you can rest assured that the casino isn’t scamming you. So, play within your budget, and you should make money, too.