When playing at an online casino, do they make a profit? We take a look at the different factors that allow this even when players grab some huge wins.

Do Online Casinos Make Money?

Many people wonder about online casinos. Most players join them with the intention of making money. However, the sites wouldn’t last very long if everyone managed to do this. So, what happens if people manage to grab big wins? We will take a look at whether online casinos make money, and how they do so.

Levels of Profit

This is an area that many people underestimate. When trying to answer the question “do online casinos make money”, many players are unaware of what goes into the running of an online casino.

While the running costs of an online casino are much lower than brick-and-mortar casinos, there are still costs involved. Despite their relatively high levels of profit, online casinos still have to deal with expenses. One of the largest expenses, is taxes on earnings.

Many online casinos have to pay huge levels of tax on their earnings. This is, because governments tend to demonise the gambling industry, despite it bringing in a large portion of revenue for them. It means that this is a large expense that almost no online casino can avoid.

Despite the costs that are currently in place, sites still manage to record solid profit figures for a number of reasons.

House Edge

Depending on the game that is being played, there is almost always a house edge in place. While some games have higher house edges, such as video slots, there are also games out there that have a smaller house edge.  The house edge is basically the way that online casinos manage to make a profit.

The house edge is essentially a small slice of every bet that gives the online casino an advantage. With video slots, there is usually a house edge of around 5%. This means that players have a 95% chance of winning. However, the way this works, is that while a lot of players can walk away without losing any more, or even with a big win in some cases, there are still 5% of players who walk away with absolutely nothing.

Obviously, this is run on averages, so there are a lot of calculations involved. If you imagine that players wager 100 million credits per day at an online casino, with a 5% house edge, it would mean the casino takes in 5 million credits every day. This is how online casinos make money even when they have a relatively good chance of winning.

There are of course exceptions to this rule as well. For example, progressive jackpots pay out incredible wins to lucky players. However, even if the payout is won at a single casino, the casino doesn’t have to pay out that jackpot. Progressive jackpots are paid out by the slot developer. So, it means that casinos have the ability to bring in players by offering these games, but don’t have to worry about paying out any winnings. This makes these games extremely profitable for the site.

Variable RTP Games

This is an area that online casinos can’t fully control. While some video slots have variable RTPs, they still give power to the casino. However, when it comes to Blackjack and Video Poker, the casino isn’t fully in control.

Blackjack is a game that has a lot of luck and chance involved with it, but it also has some skill. This means that players can increase their chances of winning by playing. Players can improve their ability by learning basic Blackjack strategy. This is a statistical method of playing the correct move, depending on the cards that have been dealt out. This allows the player to win more hands than they would normally.

Video Poker is essentially a game that deals out hands to players, and they try to make the best Poker hand possible. What Video Poker offers to players, is the ability to increase their chances of winning just like Blackjack. However, there are some Video Poker games, where players can actually remove the house edge completely. This means that the online casino will on average make a loss on these games if every player plays a perfect hand. Of course, not every player does, which is why the casino can make a profit.

Can Players Win?

To put it simply, yes they can. While the online casino has a house edge, players still have the opportunity to win. By playing in a sensible manner, and betting with a good strategy, players can increase their chances of grabbing wins. This is why it’s important to make sure you’re fully prepared when playing at an online casino.