Online Gambling: What is the business model of casino?
I can only speak for the gambling side of the business, not the hospitality side you see in land based casinos.
The casino gambling business model is actually very simple.
All of the games offered by a casino have a statistical edge for the house. So long as the game is fair and players cannot cheat, then over the medium to long run, the edge results in profit for the casino. goldenslot
For example, if you place $1 on a single number in Roulette, and it comes up, you win $35 plus your stake back. The casino makes a loss on that bet.
However, the chances of this happening on a fair roulette wheel are actually one in 38.
This means that, over time, the casino will keep your $1 on 37 bets, and you will win on one bet. The casino's margin is the last $1.
Of course, this is a statistical average, almost theoretical. If you look at the returns for a real roulette wheel, you find that sometimes the players are doing great, sometimes the house is doing great. In the business we call this volatility - spikes in profit or loss.
These spikes are what provides the excitement in the game, because it's possible to make a lot of money if you have a winning streak.
The interest of a casino are best served by having as many players, and as many spins or bets as possible, so that the spikes smooth out and the margin trends towards the long term norm of their statistical margin.
Casinos in most countries are required to keep large cash reserves in order to accommodate large wins by their players, using a formula for volatility which is usually a multiple of their average takings over a week or a day. Regulators keep a close eye on this and also on the returns from each game to make sure that it is behaving within the statistical expectation.
0 comments :
Post a Comment