How Casinos Make Money, Their History and Some of the Most Popular Games

The word casino conjures up images of glamorous, sexy gambling establishments that offer high-stakes excitement and lucrative profits. While the glitz of casino hotels, fountains and shopping centers helps to draw in patrons, these establishments would not exist without games like roulette, poker, blackjack, craps, baccarat and slot machines. This article takes a look at how casinos make money, their history and some of the most popular games played there.

Casinos generate billions of dollars each year for the companies, investors and Native American tribes that own and operate them. In addition, state and local governments reap revenue in the form of taxes, fees and other payments. Many gamblers consider casinos to be modern-day equivalents of ancient Egyptian pyramids and medieval castles. The vast majority of casino games are based on chance, but some have skill elements and require strategy. Aside from the obvious monetary rewards, gamblers also enjoy the ambiance and entertainment offered by casinos.

Every casino game has a built in advantage for the house, which is known as the vig or rake. It may be small, less than two percent in some cases, but it adds up over the millions of bets placed at a given casino. That edge is why casinos can afford to build spectacular hotel resorts, towers, pyramids and replicas of famous landmarks.

In addition to the vig, casinos earn income from game admissions, table service charges, beverage sales and a variety of other sources. Slot machines and video poker machines are the economic backbone of American casinos, generating a high volume of bets at a relatively low cost per bet. In Europe, casinos rely on the more sophisticated game of roulette, which attracts big bettors and allows them to reduce their house edge to less than one percent.

Despite the fact that gambling in its various forms predates written history, casino gaming as we know it began to develop around the 16th century. There is evidence of primitive proto-dice and carved knuckle bones in the most ancient archaeological sites, but the modern concept of a casino did not emerge until the 17th century with the advent of public gambling houses. In America, the first casinos were built near railroad stations and racetracks to serve passengers and bring in new customers.

In order to increase customer loyalty, casinos reward frequent players with free goods and services. These perks are called comps and can include anything from discounted food, drinks and shows to free hotel rooms and limo service. In addition, some casinos have clubs that function much like airline frequent flyer programs, where patrons swipe cards to track their play and tally up points that can be exchanged for prizes. However, critics argue that the social costs of compulsive gambling outweigh any benefits a casino might provide to its community. These costs include loss of productivity in other industries, higher crime rates and even health care costs associated with problem gambling. In addition, people who visit casinos spend less at other types of local entertainment, which has a negative impact on local economy.