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
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.)

Related Articles
  1. Mutual Funds & ETFs

    Top 3 Muni California Mutual Funds

    Discover analyses of the top three California municipal bond mutual funds, and learn about their characteristics, historical performance and suitability.
  2. Investing News

    6 Signs You Are Addicted To Investing

    An addiction to trading can ruin your life and relationships. Not to mention the monetary costs. There are telltale signs that you've gone too far.
  3. Investing

    What is Descriptive Statistics?

    Descriptive statistics is the term applied to meaningful data analysis.
  4. Fundamental Analysis

    Create a Monte Carlo Simulation Using Excel

    How to apply the Monte Carlo Simulation principles to a game of dice using Microsoft Excel.
  5. Mutual Funds & ETFs

    Top 4 Inverse Equities ETFs

    Explore analysis of some of the most popular inverse and leveraged-inverse ETFs that track equity indexes, and learn about the suitability of these ETFs.
  6. Forex Fundamentals

    How Foreign Exchange Affects Mergers and Acquisitions Deals

    Learn how foreign exchange rates can impact the flows of international merger and acquisition (M&A) transactions, and understand how deals can impact exchange rates.
  7. Mutual Funds & ETFs

    Finding Lower Risk, Higher Return Mutual Funds

    Discover detailed analysis of lower-risk, higher-return balanced mutual funds, and learn about the characteristics of this type of mutual fund.
  8. Mutual Funds & ETFs

    ETF Analysis: iShares Globl Consumer Discretionary

    Explore analysis of the iShares Global Consumer Discretionary ETF, and learn about the suitability of this fund that tracks the consumer discretionary sector.
  9. Mutual Funds & ETFs

    Top 4 Muni New York Mutual Funds

    Explore detailed analyses of the top four New York municipal bond mutual funds, and learn the type of investor for which these funds are best suited.
  10. Mutual Funds & ETFs

    3 Mutual Funds That Hold Facebook Stock

    Explore detailed analysis of three mutual funds that include common stock of social media giant Facebook, Inc. in their top holdings.
  1. Is Colombia an emerging market economy?

    Colombia meets the criteria of an emerging market economy. The South American country has a much lower gross domestic product, ... Read Full Answer >>
  2. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  3. What are some of the more common types of regressions investors can use?

    The most common types of regression an investor can use are linear regressions and multiple linear regressions. Regressions ... Read Full Answer >>
  4. What types of assets lower portfolio variance?

    Assets that have a negative correlation with each other reduce portfolio variance. Variance is one measure of the volatility ... Read Full Answer >>
  5. When is it better to use systematic over simple random sampling?

    Under simple random sampling, a sample of items is chosen randomly from a population, and each item has an equal probability ... Read Full Answer >>
  6. What are some common financial sampling methods?

    There are two areas in finance where sampling is very important: hypothesis testing and auditing. The type of sampling methods ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  2. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  3. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  4. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  5. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!