Online casinos and online gambling sites are businesses. They don’t offer online casino games and sports betting for fun. As a punter you may well reap benefits from playing casino games and winning – but every time you don’t win, it’s the online casinos that win. But how much money do they make? How do they make it?
Most online casinos now offer a whole variety of online gambling services. Gone are the days when an online casino website would just offer online slots and table games – many now offer sports betting, virtual games, scratch cards, lotto, virtual games, Slingo and more. However, how much a casino makes depends on the site.
Obviously, not all casinos are as successful as others. A new casino site that offers a few games will earn a very different amount to a real money casino that offers thousands of casino games. In this article, we will be looking at how much money an online casino site might earn and how they go about making profits.
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Why an Online Casino Makes a Profit
There are some online casino games, including online poker games where players take on other players. Games such as Texas Hold’em and Casino Hold’em see two or more players going head to head… they aren’t taking on the online casino, so how does the casino get money? One player always wins, right? But online casinos offer so many other types of casino games than that – and they really do make a profit. In fact, recent reports show that online casinos have almost overtaken land-based casinos and retail gambling for making money.
It goes without saying that an online casino site can’t just keep all of the money it makes as there are a number of expenses that they have to take care of before counting profits such as employees’ wages, licensing fees (which can be very expensive), security, any fines they are charged, advertising costs, a physical building (and all the expenses attached to that) and much, much more. However, the online casinos will always do the math to make sure they walk away as the winner.
But how does this happen? How do they make a profit? After all, they can’t guarantee that a player won’t keep winning, right? Well, although different casinos have different ways of ensuring a profit, most rely on the ‘house edge’, the structure and variety of games, and bonuses to ensure profits. House advantage will overcome all else.
The Online Casino Games House Edge
No matter what game players play – the casino will always have the house edge. This means that ultimately the online casino will always win more money than it loses – and most lucrative businesses aim to make much more money than they pay out. Ultimately, every time you lose money, the gambling site will win money – and the math dictates that players will lose more than they win – and as such, online casino operators earn more than enough money to get some very nice profits.
When you play a game such as roulette, the online casino wins the house edge. So, for example, you bet on red or black – there are the same amount of red and black numbers, so to all intents and purposes, it is a 50/50 bet – but it isn’t. The casinos are one step ahead and include the green 0. In American Roulette, there is 00 as well, which is also green. So, they pay out at 50/50 odds but at the same time it isn’t a 50/50 bet, so if the ball lands on the green, the players who bet on red and the players who bet on black both lose – which means big wins for the casino coffers.
So, basically put, the house edge is the difference between the actual odds of winning and the odds the casino pays out at. High house edge games drastically accelerate a casino’s profit margin.
Payout Percentage
This doesn’t mean that online casinos are rigged or necessarily scamming people though. They need to do this to stay afloat. Ultimately, this means that the games that would normally allow players to break even will offer slightly less. Different games have different payout percentages – the RTP – Return to Player percentage.
All online casino sites that are fair and true will publish the Return to Player rate of their casino site and the online casino games they offer. The average online casino game RTP would be around 95% to 97%. This means that most games you find in the online casino market will pay back between 95 to 97% of what you spend on the game. So, if you try out an online casino game and spend $100 of your own money on a game that has an RTP of 96.2%, then on average, you will win back $96.20. This is not an exact science, however. If you are an active participant in online gambling then you will know that one time you could spend $100 and win $10, another time you could play $100 and win $200 or more. If the game has an RTP of 96.2%, then the house edge will be 3.8% – the money the player loses is the money the casino wins.
Random Number Generators
Online casinos cannot make a player lose. The outcome of every game in the online casino industry (aside from live casino table games) is decided by the Random Number Generators. These are online gaming tools that randomly select the outcome of a game – and these ensure that every single turn is completely unrelated to the previous outcome.
Moreover, many online casinos will make sure that their Random Number Generator is tested regularly by a third party company. All new games where you deposit money online will be determined by fair, tested and trusted RNGs. This is a very effective method of making sure that the games are true, fair and transparent.
Bonuses: Vital Know-How
Many online gamblers also look for bonuses and free spins – where real money online casinos give new players – and existing customers free bonuses. But how much money do they lose from that? Surely, online casinos cannot offer free cash to players? But how can a new account welcome bonus make money for casinos?
All online casinos, from big casinos such as William Hill to new and up and coming online casinos, will offer new players casino bonus offers – but it is vital to know how they work. Bonuses are not easy cash. You need to pay attention to the terms and conditions attached to the bonus. Firstly, you generally need to make a minimum deposit to claim your offer – so the casino will make money that way. Also, they have wagering requirements attached. So, you can’t simply withdraw the bonus money or winnings from the bonus. You need to spend your own real life money first – so if you claim a casino or sports betting bonus of $100 that has 30-times wagering requirements, then you will need to wager 30x $100 = $3,000 before you can withdraw the bonus and winnings. Another way online casinos make money!
Online Casino Commission Structure
Online casinos make money also through commission – particularly in games where players play against each other, such as poker. In these games, the online casinos’ commission will be collected at the start of the game and generally takes this form of a percentage on the amount of the bet. However, in some cases, the online casinos charge a flat fee for every round that they play. The flat fee or percentage is generally referred to in the game as ‘the rake’.
The rake is just as important to a casino as the house edge because this is the only way a game between two players can offer a casino any means of making money. In these games, the online casino only acts as the dealer and so can’t ‘win’ money.
The Casino Game Structure
The way online gambling casinos make money – and how much online casinos make – depends on the game structure. Obviously, if the casino is acting as a player – i.e. the casino v player, then they have the best odds in this case and more chances to make money.
In a game like blackjack, for example, the dealer is the player with the advantage… as all the players need to play their hand before the dealer. This means that the dealer knows the outcome of all the players’ hands before playing their hand.
So, How Much Do Casino Operators Make?
Well, it’s difficult to pin down how much money an online casino operator makes… the online casino industry is varied and the success of the casino varies. However, it’s well known that digital online gambling services often participate in billion-dollar deals. So, they aren’t hard up.
In some big casino industries, such as the UK, the gambling industry is said to be around £14.3 billion – and the sum is growing. So, we can just assume that there’s plenty of money to be made in the online casino game gambling industry. However, it’s a case that you need big dollars to make big dollars. If there is a big win, for example, then the casino will need to have the liquidity to pay out. However, because the rule of thumb is that players lose more than they win, as long as the online casino can cover the wins, they will end up in profit… because of the rake and the house edge.
Having said that, there have been a high number of online casinos that have gone bankrupt in the past few years. So, we would always recommend that you choose a well-established casino – as it’s vital that online gamblers trust that their money is in a safe place – and that the casino will always be able to payout the wins.
FAQs
Can I Start My Own Online Casino to Make Money?
There would be a lot of work that would need to go into starting your own online casino. You would need to know the industry very well and work alongside others knowledgeable in the industry. It’s also worth remembering that not all online casinos make it. If you read up on how some of our top online casinos were created, you can receive exciting insights on how successful casinos are created.
How Can I Make Money from Online Casinos?
There is no guaranteed way to make cash from casinos. However, in order to try, you can start by signing up with one of our top online casinos. Simply register by entering a valid email address and your personal details as requested, create your password, sign in and claim your bonus. You can then use the bonus to start winning the games. Remember, bonuses aren’t free cash to play at the casino. You need to check out the terms and conditions, the wagering requirements, the specified games or casino software providers etc. Once you have your bonus and start playing – then you can think about how to make money from casinos.
Which Online Casinos Make the Most Money?
The most successful casinos are those that offer their players plenty of gambling options. They will offer games from all different software providers and will include all different types of games in their library from online Slots, table games, live casino games, Slingo, scratchcards, sports betting and even virtual. The more established casinos will also be likely to make the most money.
What Game Makes Casinos the Most Money?
The games with the highest house edge (and the lowest RTPs) are the ones that make casinos the most money. If a game has an RTP of 94% then it will make the casino, on average $6 out of every $100 played, whereas a 98% RTP game will make the casino $2 out of every $100 played. Obviously, the 94% RTP game will make the casino more money. If you look at the casino’s RTP percentage, then you will have some idea of how much the casino makes from its customers.
