Back in 2005, shortly after Wynn Resorts (Nasdaq:WYNN) opened its first resort in Las Vegas, the aptly-named Wynn Las Vegas, in a filing it made with the Securities and Exchange Commission (SEC), the company reported that the average daily win rate at its table games was $7,117 per table. The slot machine win rate was $273 per machine per day. These win rates are indicative of the daily rakes at other casinos and means that each gaming device inside a casino is effectively its own money-making franchise.
TUTORIAL: Stocks Basics
As the Center for Gaming Research at the University of Nevada Las Vegas explains, with little exception, the house (casino operators) always wins. This is because, when it comes from the perspective of the casino, the games have been mathematically designed so that the odds are in the favor of the house over the long run. As its casino math guide points out, the rules may not be fair, but if the casino honestly runs its operations, its carefully calculated advantage against gamblers is perfectly legal.
Below is an overview of the primary casino games and a detail of those that have the worst odds. The advantage that the house maintains in its games is most frequently referred to simply as the "house advantage," which is its expected win percentage over the long term. (To learn about the similarities and differences of investing and gambling, read Going All-In: Comparing Investing And Gambling.)
Games of Chance
Games of chance, meaning there is not an ounce of skill that a gambler can employ to lower the house advantage, include games such as roulette, craps, slot machines and keno, generally have the worst odds. Keno is easily the most lucrative with an estimated average house advantage of 27% to mean that over the long haul the house will keep 27% of all bets made. Slot machines are also quite lucrative with house advantages between 5% and 10% roughly, though ranges can be as high as 2% and 15%, depending on if there are special gambling promotions or slot payouts are especially stingy.
Next up is double-zero roulette with an estimated house advantage of 5.3%. A single-zero can cut the house advantage in half to 2.7%. The game of craps has many betting options, with house advantage ranging from the teens to having an even edge versus the casino. (For related reading, see Are You Investing Or Gambling?.)
Skill games allow the gambler at least some ability to use strategy and lower the house advantage. Games in this category include blackjack, poker via a slot machine (also known as video poker), and poker table games such as Caribbean Stud and Pai Gow poker. As with certain types of bets in craps, blackjack can be played so that the house advantage is minimal. With a single card deck and a basic strategy that prescribes when exactly to hit, fold or stay, there is basically no house advantage. The Center for Gaming Research has pointed out that an average player, who doesn't consistently implement a basic strategy, will allow the house a roughly 2% advantage. Video poker has another low house advantage in the low single digits. The poker table games listed above have house advantages ranging in the low to mid single digits.
The Poker Room
Poker rooms are unique in casinos as they offer the house no advantage. This is simply because the poker player is playing against other players at the table, and not the casino. The casino only takes a cut, or rake of each hand played to earn its money. For this reason, combined with some level of poker-playing skill, playing in the poker room can offer an opportunity for the gambler to make some consistent money while gambling.
The Sports Book
As with the poker room, betting in a sports book differs from more traditional slot and table game betting. Rather than referring to a house advantage, casino sports books make money by facilitating bets and also establishing proper odds on the underlying sports events. The commission earned by a sports book is most commonly referred to as the "juice," but the more technical term is the vigorish, or "vig." Gamblers in the sports book are looking at stated point spreads (also known as "odds" or "the line") between two opponents, such as the Chicago Bears and Green Bay Packers in a football game, and making their own judgments regarding their ability to profit from a bet. (To find out more about sport gambling, read A Quick And Dirty Look At Sports Gambling.)
The Bottom Line
At the end of the day, gambling should be viewed as another form of entertainment, with a corresponding amount of funds set aside that can be lost without harming an individual's personal finances. Certain individuals may want to try and minimize their chances of losing by betting on games with the lowest house advantage, and while a very small percentage of individuals may see success gambling as a profession, the rest of us would be best served by avoiding any serious commitment to winning consistently at the casinos. (For related reading, see Measuring And Managing Investment Risk.)