Wednesday, June 26, 2013

How does a casino make profits?

A casino makes profits the same way any other business
makes profits -- by taking in more money than it expends in fixed and variable
costs.


Casinos make their profits mainly by the fact that
their gambling games are rigged against the player.  This is not to say that they cheat,
it is just to say that this is how the games are set up.  Each game is set up in such a
way that "the house" is guaranteed to win over the long
term.


So the casinos have this guaranteed stream of
income.  In order to make profit, all they have to do is ensure that they spend less
than they take in.  This means that they have to avoid paying their employees too much,
etc, just as any other business would have to do.

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