Online casinos have a lot of monthly fees and overheads. This article shows how operators profit from casino and poker games. There is an old adage in gambling that says “the house wins”. It doesn’t matter what casino you play at, money comes from it. But how do online casinos make money?

REVENUE MODELS OF ONLINE CASINOS

Let’s start by looking at the revenue sources an online casino has:

House Edge
House edge is the amount a casino is expected to profit from each bet made on a particular game.
For example, if a player bets $100 on red playing roulette there are 18 red slots, 18 black slots, and 1 green slot. 18/37 times the bet will win, netting the player $100. However, 19/37 times the bet will lose, meaning the player loses their $100 bet.

To figure out the expected value of making a bet we use this equation: EV = ($ win x probability) + ($ loss x probability)
Plugging in that equation with our numbers it looks like this EV = ($100 x 18/37) + (-$100 x 19/37)

• EV = ($48.65) + ($51.35)
• EV = -$2.70

We can see that the expected value of making this $100 bet is -$2.70, which means that the house edge in this bet is 2.70%. This 2.70% represents the profit the casino earns per day.

This equation can be used to determine the house edge of a casino game and gives you an idea of ​​which game is best to play. Not all casino games have the same house edge, and not all bets on the same game have the same house edge. Here are the lowest possible house edges for the most popular casino games (assuming no edges are playing):

• Blackjack House Edge – 0.5%
• Baccarat House Edge – 1.06%
• Crabs House Edge – 1.36%
• European Roulette House Edge (Single Zero) – 2.70%
• American Roulette House Edge (Double Zero) – 5.26%

These advantages may seem insignificant, but they do add up in the long run. Let’s say the total red/black bets per roulette day are $1,000,000. That expectation is $27,000. This is just one type of bet in a game!

Poker rake
Another way casinos make money is by hosting poker games. A fee is charged when a casino hosts poker games. This is called the gravel fee.

Fees can be charged in different ways depending on the type of game you play. Cash games either receive a portion of each pot played or charge players a certain amount every 30 minutes to continue playing. The Rocks are like the Whigs in the sports betting market, which is the cut of the bet. Similar to how sports betting operators make money, poker operators benefit from rake.

The typical rating structure you’ll see set at 5% at $7. This means that when you see the poker hand flip, the casino gets 5% of the total pot and a maximum of $7 is withdrawn from the pot.

For example, if a $70 bet is played in this rating structure, the casino takes 5% of that, which is $3.50. However, if a $700 pot is played in this rake structure, then 5% of it would be $35, which is above the cap, so the casino only takes $7.

In tournaments, they will keep a percentage of the advertised buy-in as the rake and add the rest to the prize pool.
For example, if the tournament buy-in is $100, it will usually be advertised as $85+$15 – meaning that $15 will be taken as a rake for hosting the game and $85 will be added to the prize pool that the players can win.

Again, these numbers might not seem very big but if 500 players enter that $100 tournament the casino is taking $7,500 in rake!

HOW ONLINE CASINOS KEEP MAKING MONEY

Given that we now know that the casino will always win in the long run if we play their games, how do they get us to keep playing?

Free Online Slots
One way they do it is by making some of their games, such as slots, free to play. Now, you can’t win money from these free-to-play games but the hope of the online casino is that you hit a “jackpot” on this game and think to yourself “man if only this was for real money”, which then tempts you into playing slots with real money.

It’s a lot easier to burn through fake money than it is real money, and it’s quite common for players to not notice their losses when they’re playing for fun and only think of the “jackpot” they won. By the time they start to play for real money, they quickly realize how many spins they had to get through before they got their jackpot.

Online Casino Bonuses
Another way casinos draw players in is by offering enticing bonuses. Offers such as bet $10 get $50 free, or wager $20 and get 100 free spins, that on the surface look too good to be true. Unfortunately, this is often the case.

Although these bonuses seem attractive, there are conditions that make them not as profitable as they seem. They often have a “betting clause” attached to them, which means you can only deposit $10 and withdraw $50 – before you can take it out, you have to match it with the “free” money that comes with it. They let you play. These wagering requirements are often as high as 40x or 100x your bonus!

This means that if you receive a free $50 after betting $10, you must play at least $2000 in order for that money to be available for withdrawal. With such a very high demand, bonuses are powerful promotional tools that encourage customers to spend money on their casino games.

Online Casino Affiliate Program
Affiliate programs work in a similar way to the bonus offers but instead of the casino running the promotions, they get players to do it for them. They will give the player a special offer on a bet or improved odds on a certain line and get them to encourage their followers to sign up to take advantage of it. One example is the Playamo affiliate program that pays its partners every 1st of the month.

The casino increases its revenue as it gets more players to sign up and the affiliate wins as they get a cut of the revenue the casino makes from the players that signed up. Even the players win to a degree as they get to take advantage of a special offer. online casino fees

Online casinos look like licenses to print money, but they cost a lot.

license fee
In order for an online casino to have a good reputation and offer real money games in a particular jurisdiction, it must be licensed. These licenses aren’t cheap either, and the more reliable you want a license, the higher the cost.

For example, a license in Gibraltar (one of the most reputable gaming commissions) will place an online casino between $30,000 and $70,000 depending on the type and structure of the business. This license is valid for five years and requires an annual renewal fee of $2,800. It’s not something you can start in your bedroom.

Hosting Fees
Websites operated by online casinos are equivalent to showcases. A slick, eye-catching site will draw players in and convince them that this is the right site 카지노 to spend their money, whereas a dodgy, half-finished site will immediately make players click off and find another.

There are a lot of costs that go into setting up a site as they’ve got the design, front-end development, backend development, software integration, and web hosting fees to worry about. The online casino wants their site to look, the more it costs them – but they consider it a worthwhile investment.

Software Fees
As well as developing and hosting a website, the online casino needs to think about its software platforms. They need to be able to host a wide range of games in order to entice players, they need to look appealing to play on for long periods of time and they need to be able to accept various payment methods.

Some companies will design their software from scratch, some will buy the framework of the software and then add their themes on top, and others will buy what’s called “turn-key” software which is ready to deploy immediately.

The choice that online casinos make in this regard will have a big impact on the cost but it also impacts how much they’re able to change the software.

Salaries
While it seems like a lot of these online casinos run themselves once they’re set up, they require a large amount of manpower to keep ticking over. They need to have software developers on hand in case there are any major bugs/glitches with the site, technical support to assist players if they have any queries, marketers, management, accountants, and many more!

Some of these jobs are highly skilled and require large salaries to attract the best employees, and if they want to become one of the most popular sites they can’t afford to skimp in any of these areas.