Gambling How To

Casinos earn 50% of their revenue from just 3% of their customers

Do you consider yourself a gambler?

Some people enjoy heading out to Las Vegas or their local casino area, partaking in some fine dining, a show or two, and maybe take a chance at the tables or slot machines.  For some, that gambling portion of their trip can be an exciting time (check out any craps table around 11pm) or something a bit more depressing (any keno lounge at 3am).

The reasons that people enjoy gambling run almost hand in hand with the reasons that others absolutely despise gambling.  To the latter group, the issue is often “why bother throwing money away? Nobody ever wins.”

And for the most part, they’re right.  Casinos exist solely because the “house always wins”.  If they didn’t, then casinos wouldn’t exist at all. Gambling is a business, and if a business can’t make a profit somewhere along the line, it would cease to exist.

Casino Operations Management
Casino Operations Management

So HOW MUCH MONEY DO CASINOS MAKE FROM THEIR CUSTOMER BASE?  It may not be quite as much as you think, when you look at it in a sheer population viewpoint.  ACCORDING TO RESEARCH REPORTED IN THE WALL STREET JOURNAL, it’s a very low percentage of gamblers that walk away from casinos as winners.

The report shows that roughly just 11-13% of all gamblers end up in the black over a period of time.  So that leaves about 88% of all gamblers as walking away from the table at some sort of loss (hey, we’re rounding here — just go with it).

But how much money does that remaining 88% of losers represent as profit to the casino?  It’s really not that much, if we read the report further.

  • 2.8% of all gamblers provide 50% of the casino’s take over the reviewed period.

Okay, but does this scale?  We all know about “whales”. What about the rest of the gambling public?

  • 10.7% of all gamblers provide 80% of the casino’s take over the reviewed period.

The above number includes those whales shown previously.  Here’s what the takeaway should be, especially if you’re a low-ante gambler:

Casinos earn 20% of their money from 81% of their visitors.

That’s not a lot, in comparison, to the whales, but still represents a good chunk of money from those folks who don’t wager a lot.

Should any of the above surprise you? Not at all. But read the full report linked above for some fascinating details on what makes the casino industry and low-wager gambling tick.