How Does the Casino Know it Will Win?

Most people had the dream of going to the casino and breaking the bank, winning millions if not billions. But, that hasn’t happened to anyone in a long while. In the past casinos used complex mathematics to be quite certain that they will be on top, now they use technology to know.

Generally, there are three ways how casinos make money:

  1. Playing the odds
  2. Charging the spread
  3. Skimming the top

Additionally, both physical and online casinos use additional revenue streams such as services or ads. But, the aforementioned three have been and still are the main way how the actual game is stacked against the player.

For most games, it is a precious balance of giving players a real chance to win, but always to keep the house on top in the long term. The chance of overall winnings, usually called Return-to-Player or RTP, is higher online, and there is a good reason for that.

The best casino games, from the position of the player, are those online. Counter-intuitively, this is not because the house has a higher chance of losing, but rather exactly because the operator can be certain that they will always come up on top.

Physical Universe Probability

Even those who haven’t read the Hitchhiker’s Guide to the Galaxy know that everything in the universe is possible. The rule of large numbers proposes that because our reality is so vast there is bound for everything to happen at some point, somewhere.

But, the simple mathematical fact that everything is possible doesn’t mean that everything is probable, and the casino you went to have fun in knows that.

For instance, if you are playing games like blackjack there are only 416 ways to score a blackjack when playing with a single deck. This sounds like a lot, but it is not really.

Doing the math tells us that we only have a 4.83% chance of hitting a combination naturally. In the end, the house will win roughly 5/8 of all games played.

This doesn’t mean that some players won’t leave with millions, but that most will leave broke.

Playing on the Spread

Much more common in sports games and races, the booking house or gambling operator will play on the spread of chances and bettor perception.

Let’s say that you are betting on a coin toss, the house will give you a 1.9 quote for both heads or tails. That spread of 0.1 on both sides is where they will make their money.

In modern times, the computer will use player data to change quotes in real-time, preventing anyone from abusing the system. This does make the bets safer for the operator and dissuade them from fixing games, but it makes for a lesser payout.

The spread is also used for large poker tournaments and the preferred type of fee. In that situation it is simple; you will buy chips for $1 and sell them back to the casino for 95 cents.

Modern Technology Algorithms

Technology is tricky because it is both extremely random and completely fixed. While no human can fix any particular game and nobody knows what will happen, the odds will change depending on who is luckier and favor the unlucky, be it the house or the player.

The house will always be good in the end, but sometimes with as small of a margin as 0.02%. This is enough when you have millions of players spending billions of dollars every day on your platform.

But, where the algorithm shines is in casino games. Unlike traditional cards, we can play here with infinite decks and unlimited probability if we wish. Namely, it is impossible to count cards or read the table if you are playing with an infinite amount of cards.

For some this type of chaos is frustrating, for others it is thrilling.