The Casino Industry – How the House Edge Is Calculated

The casino industry generates billions of dollars each year. Its enduring popularity does not seem to have faltered even in these times of economic hardship. What is it that keeps people going back to these gambling meccas? Is it the glamour, the excitement and the opportunity to win big? Or is it the quality of time spent with friends, the adrenaline rush and the dopamine high that drives gamblers to return?

Beneath the glitz and flashing lights, casinos are built on an engineering foundation that is designed to slowly bleed patrons of their money. This is not something that casinos take lightly. They employ mathematicians and computer programmers specializing in gaming analysis to create mathematical probability models that help them calculate the odds for every game.

This information is compiled into a house edge for each individual game that the casino offers. This information helps the casino calculate its gross profit margin. It is also used to determine the maximum bet a casino will accept. This helps prevent patrons from wasting their money by wagering more than the house can afford to pay out.

Casinos regularly give “good” players comps such as free hotel rooms, shows and dining. They may even give limo and airline tickets to the biggest spenders. When you are in the casino, be sure to keep track of your budget and set a timer to go off at regular intervals. This will keep you from losing more than you can afford to lose and it is a good way to avoid those temptations to drink a lot of free alcohol.

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