The Casino Business
A casino is a large building designed to house gambling games of chance. The modern casino has a wide range of amenities including top-notch hotels, spas and restaurants. While these features attract visitors, the vast majority of a casino’s profits are earned from gambling. Slot machines, blackjack, roulette, craps and baccarat provide the billions of dollars in profits casinos rake in each year. The precise origins of gambling are unknown, although primitive protodice and carved six-sided dice have been found in archaeological digs. The modern concept of a casino was developed in the 16th century during a gambling craze that swept Europe. Italian aristocrats created gambling clubs called ridotti, where they could gather to gamble and socialize in private, away from the prying eyes of church officials.
The modern casino is almost like an indoor amusement park for adults. It features a variety of attractions and amenities such as musical shows, lighted fountains, shopping centers and elaborate themes. But the vast majority of casino entertainment (and profits) comes from the games of chance. While many people visit a casino just to enjoy the entertainment, most are hoping to win some money. The odds of winning are affected by the popularity of a particular game, its skill level and the rules and payouts.
Casinos earn millions of dollars from bettors each year, but they also have a built in statistical advantage for the house. This advantage is usually less than two percent, but over the millions of bets placed in a casino each year it adds up to a significant amount of income. The casino’s advantage is known as the vig or rake and it varies by game.
While casinos may be staffed by skilled croupiers, the majority of their profits are generated from machines that can be programmed to return a certain percentage of the money they are fed. Casinos employ a large number of mathematicians to program these devices, which are called gaming analyzers or mathematical algorithms. These programs are designed to identify patterns in the behavior of casino patrons that might signal a change in strategy or technique.
Security is a big part of the casino business. Some casinos have catwalks above the casino floor, where surveillance personnel can look down through one-way glass at the activities on the table and slots. Some casinos even have cameras mounted in the ceiling that are wired to a computer, which tracks the game play of each individual player.
In the past, organized crime groups funded some casinos in Nevada, where legal gambling was allowed. The mobsters provided the bankroll and influenced the outcome of the games, but federal crackdowns and the taint of mob involvement made it difficult for legitimate businessmen to get involved in the business. Real estate investors and hotel chains soon realized that they could profit from the casino business without mob interference, and casinos have become one of the country’s biggest businesses. Today, most casinos are privately owned and run by investment banks.