The Casino BusinessJuly 2, 2023
The modern casino looks like an indoor amusement park for adults, but the vast majority of the entertainment (and profits for the owners) comes from gambling. Slot machines, blackjack, poker, roulette and craps provide the billions in profits that make casinos so popular. Other games such as baccarat, two-up, fan-tan, and pai-gow are also offered in some casinos.
Most casino games have a built in mathematical advantage for the house. This advantage can be very small, less than two percent of the money bet, but over millions of bets it adds up. The casino takes this advantage as a fee known as the vig or rake. It is a major source of revenue for the casinos and it pays for their hotels, fountains and towers that are often modeled after famous landmarks.
In addition to the vig, casinos rely on a variety of other fees and commissions to bring in cash. They collect a percentage of each bet made on their table games, charge a fee to play video poker and take a portion of the winnings in games such as baccarat and craps. The amount of these charges is determined by the rules and regulations governing the particular casino.
Another important source of revenue for casinos is the money from the patrons themselves. Many casinos offer comps, or complimentary items such as meals, drinks and hotel rooms, to their regulars. They also pay a commission, or rake, to the dealers in card games such as baccarat and poker.
Since casinos are large businesses, they must invest in security measures to prevent robbery and other crimes. This includes both surveillance equipment and personnel to keep an eye on the players. Some casinos employ “body scanners” that use magnetic fields to detect concealed weapons on the bodies of visitors. The body scanners can even detect traces of cocaine, heroin or other drugs on the skin of some people.
In the early days of the casino industry, mobster money fueled its expansion in Nevada and other states. The mobsters were willing to invest money in casinos because they had a lot of cash from their drug dealing and other illegal rackets. They became personally involved in the management of casinos and took sole or partial ownership of some. In addition to providing the bankroll, they influenced the outcome of some games and threatened casino staff. This activity gave casinos a reputation for corruption that still exists today. Some state laws prohibit this practice.