What the Casino Thinks – Winning or Losing

by on September 25, 2012

Now I don’t know about you but whenever I speak to someone who gambles they always seem to be winning.   Doesn’t matter if they play at the casino, horse racing, slot machines or whatever – the stories always seem to be about winning bets, jackpots and stuff like that.   I’ve certainly not heard many tales of losing the lot in a back street casino at 3 o clock in the morning.   But obviously more people lose than win, other wise who would have built the massive casinos all down the Vegas strip at a huge expense.

The reality is that which ever game you play in a casino for instance, then the numbers are weighted in favor of the casino.   It’s called the house edge and although it fluctuates greatly with the game you play, it’s never in your favor unless perhaps you’re using the free play roulette sim.  The player has a negative expectation (expects to lose overall) whereas all things being equal the casino has a positive expectation (expects to win).

Although this sounds kind of depressing it’s not quite as certain as that.  The expectation relies on volume – if enough people play then these expectations are realised but of course this doesn’t mean every player will lose.

In a single day, a big casino might have something like 40,000 players, each one who will experience completely different outcomes – some will win massively! That is because the expected outcome – that the casino wins – is a long term expectation and relies on lots of players to even out the unexpected spikes.

There have been studies that estimated the expected wins of a casino.  Olaf Vancura, a prominent casino author, calculated that a casino with 100,000 spins over a three month period has a 99.9% chance of turning a profit of between 4 and 7% of the total wagered.

What an incredible business model, a 99.9% chance of making a profit!  But the numbers are the key, the only casino at risk is those who don’t have enough players.  Without volume those spikes can clean a casino out.    So casinos are happy to pass on stories of big wins and lucky streaks as long as they encourage others to play.

Olaf also calculated another possibility – that the above casino would lose money over that 3 month period.  He calculated the chances were –

000,000,000,000,000,000,000,000 – 1  against !!

So all in all a pretty safe bet really !  The point of this post is that you should always treat any form of gambling as entertainment.  If you win great, if not don’t try and chase your losses – the odds are after all stacked in the houses favor.  Also that although roulette strategies and tactics can help improve your chances in any game they will never overcome the house edge completely.

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