How the House Edge Affects the Casino

The house edge is a powerful force in casino gambling. It represents the difference between true odds and what the casino pays out. It varies from game to game but is generally expressed as a percentage. The higher the percentage, the more money the casino makes from the game. As a result, the longer you play, the more money the casino will make from you.

Casinos have elaborate surveillance systems to detect cheating and fraud. Cameras are placed at key locations throughout the casino. These cameras watch every table, window, and doorway. The video feeds are recorded for later review. Casinos also use computer chips to determine the payout of slot machines. This eliminates the need for human supervisors to constantly monitor the slot floor.

While casinos provide entertainment, compulsive gambling is detrimental to the health of the casino patron. In fact, it is estimated that 5% of casino visitors are addicted to gambling, and these people generate about 25 percent of the casino’s profit. Many economic studies have demonstrated the negative effect of casinos on communities. Since casinos are primarily attended by local players, they divert spending from other types of local entertainment. The cost of treating problem gamblers and the lost productivity of people with gambling addictions offset any positive effects the casino has on the local economy.

The casino industry in Nevada expanded in the 1950s. Although many legitimate businessmen were reluctant to participate in the new industry, organized crime figures did not care. These mobsters had a lot of cash to invest in illegal casino rackets. The casinos were a lucrative business for them, and they did not mind gambling’s seamy reputation. As a result, a number of casinos outside Las Vegas and Atlantic City were opened.