How Do Online Casinos Make Money
The owners of online casinos earn decent money. This doesn’t mean you’ll definitely lose your bankroll when you visit gambling sites. However, you lose more than you win in the long run. There are several reasons why online casinos always remain in the black. In this article, we’ll answer the questions “How do online casinos make money in the USA?” and “How do they earn millions of dollars?”
How Do Online Casinos Really Make Money
Legal gambling sites have no chance to deceive their customers as gambling commissions regulate their activities; if the casino violates the rules, it loses its license. Honest online casinos offer original slot machines from official providers. This software works on a random number generator, so nobody can influence the results of the spins. The secrets of casinos’ guaranteed earnings lie elsewhere.
Free Bonuses & Promotions
Sign up bonuses are one of the most effective tools for attracting new customers. It can be interest on one or several first deposits. However, no deposit bonuses work even better. You don’t need to transfer money into your account to activate them. You only need to register; after this, you receive free spins or a small amount of money.
But there is one caveat – any bonus has a wagering requirement. The casinos set the wager coefficient, the maximum limits on bets and winnings, and the deadlines for fulfilling the wagering requirements. Only after you fulfill them, you can withdraw winnings from bonuses or bonus money. It turns out that you have to make a deposit even when you activate a no deposit promotion.
The wagering coefficient shows how many bets you need to make before withdrawing the bonus amount. It can also apply to the deposit size.
Bonuses allow you to play with the casino funds. However, if you manage to win something, you have to invest your own money before withdrawing the prize funds. As a result, you can spend $1,000 to withdraw $100. This means the casino earns more than it gives back.
The House Edge
Online casinos do not charge commissions for bets and do not intentionally deceive customers; this is generally impossible in slots and other software that works using algorithms. Any game has a house edge which provides the casino with profit in the long run.
In slots, there is an RTP indicator which is set directly by the provider at the development stage. This is the return percentage, which shows how much (on average) the casino returns to players in a particular slot machine from the total amount of bets. However, this indicator is not fulfilled in one or two gaming sessions, but with hundreds of millions of spins.
If the RTP of the slot is 95%, this doesn’t mean that you receive $95 out of the $100 wagered. The return is applied to all bets of all customers. In many slots, RTP varies from 86 to 99%.
In modern slots, developers indicate the RTP in the rules of the game.
In table and card games, everything is a little different. The advantage is based on the theory of probability. For example, there are 37 sectors in European and French roulette, one of which is zero. It provides the house edge in the amount of 2.7%. The highest payout is provided for a bet on a specific number: 35:1. In this case, the successful outcome probability is 37:1. In American roulette, the house edge increases to 5.26% due to the presence of a double zero sector.
Each game of chance has a different house edge depending on the version and the betting option. Here are the house edge indicators in the most popular gambling titles.
| Game | The House Edge |
|---|---|
| Slots | 1-10% |
| Baccarat | 1.06-14.36% |
| Roulette | 1.27-5.26% |
| Craps | 1.4-5% |
| Blackjack | 0.17-0.65% |
In the short run, deviations from the house edge can be significant. This plays a cruel joke on newbies; after a big win, they think that luck will smile at them again. However, it’s better to withdraw the prize money immediately, rather than trying to increase it.
Fees
Some online casinos do not process withdrawal requests for free, but charge a certain percentage of funds for this. They also have a rake for organizing tournaments.
Emotions
It’s easy to get emotional when gambling. Players are prone to rash bets, especially after big wins, when euphoria covers. Such irresponsible and inexperienced gamblers who don’t know how to manage their bankroll and leave the game on time are beneficial for online casinos.
Often, the casino sends emails that one of the customers has won a big prize. This also encourages others to try to repeat their success.
Partnerships With Other Businesses to Make Profit
Also, online casino gambling sites make money in the USA through affiliate programs. With their help, they find trust sites to drain traffic. In order to convert users into customers, casinos pay affiliates a certain percentage of income; at the same time, this increases reach and brand awareness.
Other Ways for Online Gambling Sites to Make Money
To keep players active and therefore earn money, brands have many tools at their disposal. Among them there are:
- Bonuses that are activated during the game.
- Promotions with additional free spins, quests, a VIP loyalty program, and an achievement system that extend gaming sessions.
- An auto spins feature that speeds up the spins process and allows you to make more spins in shorter time.
At the same time, licensed sites are required to provide tools to follow the principles of responsible gaming. You’ll be able to set time and money limits.
Another way of additional income for gambling companies is advertising. They can sell space on their websites and email lists.
How Much Do Online Casinos Earn
It’s impossible to say exactly how much money online casino gambling sites make. This information is known to tax institutions, which receive a percentage of their income. In 2019, the gambling industry was valued at $53.7 billion; this value is growing by an average of 11.5% annually. By 2027, the figure could reach $100 billion.
If we take $65 billion a year as an average, then it turns out to be about $5.5 billion a month. If you divide this number by the total number of online casinos, you get the sum each gambling site receives on average. However, all casinos earn differently. About 40% of the income goes to pay for hosting, renting software to providers, commissions for partners, specialists, support managers, etc.
