Let’s start by calculating the costs of running an Internet casino each month. The biggest expense most online casinos have is software related. Almost all gambling sites lease their softwarefrom one of the big 3 casino software providers:

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1. Playtech
2. Microgaming
3. Net Entertainment

I’ve seen estimates that claim these 3 companies power 60% of all online casinos.

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All of them have one thing in common:

They’re expensive.

All of these providers charge $11,000 or $12,000 a month to lease their software. They also get a 15% cut of the casinos’ winnings. That’s a pretty big expense right out of the gate.

But that’s not the only expense. Almost all online casinos run an affiliate program in order to drive business to their site.

Here’s how that works:

A webmaster runs a gambling information portal or site. He signs up for a casino affiliate program. He advertises the casino in exchange for a commission on each player.

This commission usually takes 1 of 2 forms: No deposit bonus codes for vegas strip casino.

1. A CPA (cost per acquisition)
2. Revshare (revenue sharing)

A CPA is a flat amount that the casino pays the affiliate for each player who signs up and makes a deposit at the casino. This amount can range from $25 to $500, depending on how much volume asite is able to send a casino.

With a CPA arrangement, the casino risks paying more for the player than the player loses to the casino. But it’s okay, because over a large number of players, a casino has an idea of what theaverage player is going to lose. That amount is always more than the CPA.

I’ve heard from reliable sources that the average online casino gambler is worth at least $1000. That takes into account the low rollers who only deposit and lose $25, but it also takes intoaccount the high rollers who deposit and lose $10,000 a month for months at a time.

The other arrangement is called revshare, or revenue sharing. In this arrangement, the casino pays the affiliate a percentage of the players’ losses for the lifetime of the player. This amountvaries, but it hovers around 25%. Big affiliates can demand higher revshare percentages.

So if an affiliate refers a player who deposits and loses $10,000 a month, he gets $2500 in commission each month.

But affiliates on revshare also have to take into account the amount of money their referred players win. If that $10,000 a month high roller gets on a hot streak, he can wipe out the earningsfrom the other dozen or 100 players the affiliate has referred.

So far we have a flat fee of $12,000 a month going out the door. We’re also seeing 25% of the casino’s wins being paid out in commissions, and we have 15% royalties going to the softwareprovider.

Casinos also have to pay for customer service and hosting. Let’s assume you can operate a world class customer service department using offshore labor and spending only $5000 a month.

Let’s also assume that a casino is using its own secure server. I don’t have a lot of experience with Web hosting for sites with this kind of traffic or that sites that use so much bandwidth byhosting games, but I’m going to assume it’s expensive, but not too expensive. Me to aguas calientes casino. I’m going to call it $2500 a month. And if I’m way off on that estimate, let me know in the comments section.

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So now we have almost $20,000 a month in fixed expenses, and we have 40% of player revenue accounted for on top of that. So just to break even, an online casino needs to earn enough money so that60% of its earnings equate to $20,000 a month.

So we’re looking at a minimum casino win of at least $33,000 a month just to break even.

The modern casino is like an indoor amusement park for adults, with the vast majority of the entertainment (and profits for the owner) coming from gambling. While musical shows, lighted fountains, shopping centers, lavish hotels and elaborate themes help draw in the guests, casinos would not exist without games of chance. Slot machines, blackjack, roulette, craps, keno, baccarat and more provide the billions of dollars in profits raked in by U.S. casinos every year.

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In this article we'll look at how casinos make their money, the history behind them, what the popular games are and how they are played, what you could expect when you visit one, how casino's stay safe and the dark side of the business.

How Do Casinos Make Money Off Blackjack

Casino Business

A casino is simply a public place where a variety of games of chance can be played, and where gambling is the primary activity engaged in by patrons. The typical casino adds a host of luxuries to help attract players, including restaurants, free drinks, stage shows and dramatic scenery, but there have certainly been less lavish places that house gambling activities. These would still technically be called casinos.

A truly enormous amount of money changes hands at casinos every year. While there are certainly big winners at the gaming tables every now and then, the only sure winner in a casino is the owner. In 2005, commercial casinos in the United States had gross revenues of $31.85 billion. Add to that the revenue of Native American casinos, which brought in $22.62 billion in 2005, and it's safe to say that casino industry profits have been steadily increasing for more than a decade [Source: American Gaming].

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Casinos make money because every game they offer has a built in statistical advantage for the casino. That edge can be very small (lower than two percent), but over time and the millions of bets placed by casino patrons, that edge earns the casino enough money to build elaborate hotels, fountains, giant pyramids, towers and replicas of famous landmarks. The casino advantage is known as the 'vig' (short for vigorish) or the rake, depending on the game. The exact number can vary based on how the player plays the game and whether the casino has set different payouts for video poker or slot machines.

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As of 2007, only two U.S. states do not have legal gambling: Utah and Hawaii [Source: Hawaii News]. Every other state either has state-sanctioned casinos or Native American gaming.