How Casinos Are Engineered to Lose Money


Beneath the flashing lights and free cocktails, casinos stand on a bedrock of mathematics, engineered to slowly bleed patrons of their cash. Yet for years mathematically inclined minds have tried to turn the tables by applying their knowledge of probability and game theory to exploit weaknesses in a rigged system. The results: not a single winner.

Most casino games have odds that give the house an advantage over players, called the “house edge.” Craps and blackjack are designed to attract big bettors who will push the maximum amount they can win, thus reducing the house’s advantage to less than 1 percent. Roulette appeals to small bettors, and the house’s advantage is even lower. Slot machines and video poker are the economic mainstays of most American casinos, providing high-volume play at sums from five cents to a dollar.

Casinos are primarily in business to make money, and successful ones rake in billions of dollars each year for companies, investors, Native American tribes, and state and local governments. They succeed by encouraging gamblers to spend more money than they can afford to lose, and by offering perks designed to lure customers in and keep them gambling for longer periods of time.

To do this, casinos create stimulating atmospheres and offer entertainment. They also employ psychology and marketing to influence the decisions made by their customers. They often use scents, which research has shown can trigger specific emotions in people. They also use lighting and sound to manipulate the mood of their spaces. For example, some casinos may have a soothing, calming feeling while others might have more of an energetic vibe with flashing and colored lights.

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