How Does a Casino Make Money?


A casino is an establishment for certain types of gambling. Guests can gamble at tables, in poker rooms or at slot machines. Some casinos also have entertainment venues and restaurants. Casinos are often combined with hotels, resorts or cruise ships and may be located in cities or on cruise ships. The term casino can also refer to an exclusive club or lounge for high-stakes gamblers.

Most people know that a casino is where you can win money by playing games of chance, but few understand how a casino actually makes its money. The answer lies in the fact that every casino game has a built-in advantage for the house, usually lower than two percent. This advantage, called the “house edge,” is what gives the casino its overall profitability, even on a bad day.

To offset this advantage, the casino offers its players comps (free goods or services). For example, a good player might receive free hotel rooms, show tickets, dinners and reduced-fare transportation. High rollers are offered even more extravagant inducements, including limo service and airline tickets. These inducements are a substantial part of the billions in profits raked in by casinos each year. However, economic studies suggest that these revenues do not increase a community’s welfare, and the cost of treating problem gambling and lost productivity from addicted workers more than cancel out any casino profits.