The Fine Line Between Profit and Customer Happiness

Naturally, online casinos and other gambling websites operate on a profit model. That’s what most businesses do. Theoretically the casino wants you to lose, so they can keep the money you wager. But if you’d only ever lose when playing at a casino, chances are you’d not be inclined to keep coming back. So, a smart online casino has to balance trying to make a profit with making their customers happy enough to keep gambling on their website. What are some strategies that factor into how gambling websites work out on both ends?

Information market

We’re lucky. Living in this information age, we have more tools to protect ourselves than we have ever had before. As the gambling community Casinomeister states in their philosophy: Trust is spawned in information, and it empowers the player. That’s the reason they use their website to collect information and present reviews of online casinos. Any interested party can use their knowledge, to find the best casinos and the best strategies to play.

Being able to freely look for information on casinos and the experiences people have made with them forces casinos to stick to the straight and narrow. Any misstep they take will most likely be spread and cost them their good reputation. If you’re known to milk your customers for money, you’ll most likely just end up without customers sooner or later.

Forced to stick to regulations

A casino that is hoping to attract customers is forced to make themselves look good and trustworthy. These days, that’s mostly achieved by actually being good and trustworthy. To be able to promote yourself as such, you have to get a gambling license, and those you won’t get without proving honest intentions.

It’s more or less known that if you start online gambling, you need to stay away from casinos without licenses. They are not regulated and therefore can’t prove they have the safety net a gambling regulation offers. If a casino wants a license, it has to reach certain standards of safety and quality and continuously prove that they keep sticking to the regulations that come with the license.

To uphold the reputation of legal gambling in general, a license enforces rules like:

• the safety of the website
• the safety of transactions
• the safety of player deposits
• information on and tools against gambling addiction
• restrictions the player can set on their spending
• proven fairness of their games

What makes online gambling sites profitable?

Especially the steps a casino has to take to inform about and prevent gambling addition seem counterintuitive to a casino’s business incentive. Theoretically you want your user to spend as much and play as quickly as possible. If you have to set daily deposit limits and have to make sure, the spin of a slot machine has to at least take 5 seconds and won’t autoplay, those are all regulations that keep you from making as much profit as you can. Where’s the stuff that makes running a casino worthwhile?

The House Advantage

The house advantage is practically what casinos in general are built on. If the winning chances for every game where 50/50 you could impossibly guarantee any kind of profit from running a casino, unless you take hefty fees for entry and betting. Instead, the casino bets on games that shift the odds in their favor.

You have to keep in mind, that the casino does not pay 100 % of the winnings out of their own pocket. A lot of the money comes from the player himself, since he just placed a bet putting that amount on a table. If he wins, the casino pays the added payout that incentivizes the player to play at all. So, if he bets on a number in a 36 number roulette wheel and pays £1, his payout is 36:1, therefore he gets £36 (£1 from his bet and £35 from the casino). 

Here’s where the house advantage comes in. To turn the odds in their favor they might not have 36 number wheels, but wheels including a 0 that can’t be bet on. Suddenly the odds of winning are 37:1 while the payout stays 36:1. Some even have a 00 spot. In that case the house advantage is 5.26 %. If all players bet £1 million, the casino expects to automatically win a little over £50.000. The rest of the million is simply returned to the bettors.

Put plainly: For every pound a player bets he might gain £1 if he wins, but the casino gains £2 if he loses. The longer people play, the more the casino can scrape off their spent money, but never so much, that it would bankrupt a player.

Conclusion — Fairness is key

The house advantage is not a secret. In fact, a lot of players look for the games with the lowest house advantages, like blackjack, or the best strategies to minimize it. A casino states the percentage of the house advantage that applies to every game. In this way, the trust between casino and player is built upon the full awareness of the player that he can lose as many times as he wins. The casino just happens to gain more overall if you tally up wins and losses.

By using the house advantage, the casino is not breaking any rules. It is, after all, not a charity but a business. Regulations that come with licenses make sure that the fairness and transparency of casino games is regularly tested. As long as you are aware the house advantage exists, you won’t have to fear getting scammed.