If you’re new to how casinos operate, you might wonder how they manage to keep their businesses afloat when they offer tons of free bonuses, promotions, and giveaways to customers. On the surface, it seems as though they’re doing players a service with their huge, irresistible bonus offers especially on slot games. However, do note that these are strategic promotions and bonus offers that are designed to attract more players and generate more revenue.
It’s a known fact that casinos are among the most lucrative businesses in the world. This explains why operators are willing to spend heavily on facilities, gaming equipment, software, and manpower because all of these ultimately become high-return investments in the long run.
A perfect example is Bitstarz Casino, which has over 100 active bonuses which allow players to play for free. But there is method in this madness once you read the terms and conditions.
Despite the “randomness” of the games, the restrictive gaming regulations they have to adhere to, and all of the bonuses they offer to players, casinos still make money – a lot. So how do they guarantee profits?
When launching a casino, an operator sets its eyes on the four main revenue drivers – house edge, drops, handle, and comps. These three are responsible for generating massive profits for the casino, and they’re all incorporated in every casino game, including slots, poker, roulette, blackjack, and baccarat, among others.
House Edge
The house always wins, and this remains true for casinos. Every game you play at any casino is designed to give the house the advantage. This guarantees them huge profits regardless of the outcome of the games.
For instance, when it comes to slots, the most popular casino game that also generates the largest revenue, the player’s winning rate or return-to-player (RTP) percentage is carefully computed and adjusted to ensure a 5-10% profit for the operator. Remember, the house always enjoy a mathematical edge over you.
Handle and Drops
The handle is a casino terminology that refers to the total amount of money or chips that the player spends in any casino game. Let’s say you bet $100 on an online slot and win a $50 jackpot. Instead of cashing out, you decided to continue playing the slot and spend the $50 jackpot win and in the end you lose it all. This means the casino took a $150 handle from you.
Meanwhile, drop relates to the amount of money initially deposited by customers to play a game. In the example above, you brought in a $100 drop for the casino. As long as the casino continues to attract players it will have a steady flow of revenue coming from drops.
To boost their profits, the casinos mainly focus on increasing the handle. They have that in mind when they set the entry fees/buy-ins or minimum bets for games. The handle covers all of the money spent by the punter, including their winnings.
If they win, they will most likely spend the payout playing the same game and could even end up putting in more money than the initial amount. Casinos usually generate the biggest handle from a certain group, the heavy-spenders.
Comps and Bonuses
Casinos usually run great-value promotions, giving away endless no-deposit bonuses, cashbacks, free drinks/alcohol and food at land-based venues, hotel discounts, free coupons, and all sorts of enticing offers, generally known as “comps”. But their businesses are still thriving despite all the massive giveaways. Why? Because comps are meant to attract more customers and encourage them to gamble more.
This tactic is among the most effective money-making strategies for casinos given that people have always loved bonuses and prizes and almost anything that is offered for “free”, blame that on the human brain.
When it comes to bonuses, casinos are also smart enough to set wagering limits to make sure punters spend a required amount before they can withdraw their winnings. In the end, the deck is heavily stacked in favor of the house and that’s why casinos end up making a lot of money in the long run!
