How Do Casinos Make Money? House Edge, Volume, and Non-Gaming Revenue

The concept of house edge anchors the system, ensuring that across thousands of wagers, the numbers favor the operator. Still, edge alone doesn’t explain the entire business. Bet volume and non-gaming income, such as resort fees, dining, and entertainment in land-based casinos, are equally important.

Understanding these mechanics reveals why casinos grow steadily, regardless of short-term swings on the floor.

Casinos track performance through a mix of financial terms that describe how games produce revenue. Some apply mainly to slots, others to table games, but together they paint the picture of how casinos convert wagers into consistent earnings.

It doesn’t matter if you’re playing in a casino or wagering in sportsbooks and esports betting sites - you will see these concepts everywhere. The basics are easy to understand once they’re broken down.

Slot machines are often the biggest revenue driver in a casino. Unlike table games, which depend on dealers and player skill, slots work on predictable math tied to spin volume and programmed payback settings. The foundation is simple: the more spins players make, the closer the results align with the built-in edge.

The revenue formula for slots is usually expressed as:

Coin-in × Hold % = Theoretical Win

Coin-in is the total amount wagered, including recycled credits. Hold percentage represents the slice of each wager the casino expects to keep. Multiply these figures, and you get the casino’s projected revenue. 

Behind the scenes, manufacturers provide casinos with PAR (Probability Accounting Reports) sheets. These outline payout settings, showing how each version of a machine is expected to perform. 

Some slots also contribute a fraction of every bet to progressive jackpots. This contribution slightly reduces the base game’s RTP, but it funds headline-grabbing prizes that draw players in.

Unlike slots, table games rely on interaction, speed of play, and rules that give the house a small but steady advantage. The formula is straightforward:

Average Bet × Decisions per Hour × Hours Played × House Edge = Theoretical Win

This calculation explains why even a slight edge multiplied across thousands of decisions generates reliable revenue.

Each game carries its own built-in edge. For blackjack, it depends heavily on rules—3:2 payouts for naturals, whether the dealer hits or stands on soft 17, and whether doubling is restricted. 

Roulette changes based on wheel type: European wheels with a single zero are more favorable for players than American wheels with two zeros. Rule tweaks, such as side bets, usually increase the edge and improve profitability for the house.

Unlike slots, skill plays a role in outcomes. A blackjack player using basic strategy narrows the house edge to less than 1%, while casual players often give back several extra percentage points by making poor decisions. 

In games like poker-based table variants, house rules on qualifying hands or bonus bets also push the edge higher.

Sports betting looks like a contest between gamblers and odds, but the real money lies in the margin baked into every wager. Sportsbooks don’t need to predict outcomes better than players; they only need to balance action and rely on their structured pricing.

Poker, whether it’s land-based or in online poker rooms, stands apart from other casino games because players compete against one another rather than the house. Yet casinos still generate steady revenue by taking a slice of the action. 

The most common method is the rake, which is a small percentage collected from each pot, typically capped at a set dollar amount. Over hundreds of hands per day, rake builds into a consistent revenue stream.

Some rooms also charge time fees, where players pay a fixed amount for every half hour or hour of table time. In tournaments, casinos collect entry fees on top of the prize pool buy-in, often 10% or more. 

Even though poker is framed as a peer-to-peer contest, the casino always benefits from volume. More players, more hands, and more events translate into more rake, fees, and seat charges, all without relying on house edge.

Casinos may be built around gambling, but a large share of their earnings comes from outside the pit and slot floor:

Casinos build loyalty through programs that reward repeat visits, but the rewards are never random. Every perk is tied to careful calculations of expected losses. 

The system revolves around metrics like Average Daily Theoretical, often shortened to ADT, which estimates how much a player is likely to lose in a single day based on average bet, game speed, and the house edge. 

From this projection, the casino determines a player’s theoretical loss, sometimes called “theo,” which becomes the foundation for comps.

Reinvestment is the next step. Casinos typically return between 20 and 30 percent of a player’s theoretical loss in rewards, striking a balance between generosity and profitability. These comps may take the form of free meals, hotel stays, show tickets, or cashback offers. 

Skilled players sometimes look for ways to tilt the math in their favor. Techniques such as card counting in blackjack or exploiting promotional offers are known as advantage play. While not illegal, these practices cut into revenue and can lead casinos to adjust their rules.

One common response is tightening blackjack conditions. Shifting from a 3:2 payout on naturals to 6:5, requiring dealers to hit on soft 17, or limiting doubles and re-splits all increase the house edge. 

Side bets, often with much higher margins, are another tool to offset potential losses from skilled play. On the promotional side, casinos add terms and conditions to free play or bonus offers to prevent repeated exploitation by advantage players.

Casinos rely on player trust to keep games running smoothly, and regulators require operators to provide transparency around returns and fairness. Beyond the numbers, modern casinos offer responsible gambling tools, which balance entertainment with safeguards.

Slot machines are programmed with specific RTP settings, and many jurisdictions mandate public disclosure of these figures. In some regions, players can view average payback percentages for each casino, offering insight into how much money is returned to bettors over the long run.

Security on the floor and in digital spaces protects both the operator and the gambler. Surveillance, licensing, and independent audits verify that games function as intended. Online, certifications from testing agencies confirm that random number generators operate fairly.

No betting system can overturn the structural math built into games. Strategies like Martingale or “hot streak” chasing create the illusion of control, but over time, the house edge reasserts itself. Responsible gambling education helps players understand this reality and play within safe limits.

Casinos may look like places of chance, but their business runs on certainty. From house edges on the floor to resort fees in hotel towers, every revenue stream is carefully structured to deliver reliable returns over time. Rules, pace of play, and reinvested comps all feed into a system where math outweighs luck.

The lesson is simple: casinos thrive not because every spin or hand favors them, but because across millions of decisions, small advantages add up. Players might walk away winners on any given night, yet the overall model always favors the house. 

Understanding how these mechanisms work doesn’t remove the edge, but it does give players insight into why casinos stand as some of the most durable businesses in entertainment.