Why Casinos Don’t Have to Cheat

Man in Suit With an Ace Card up His Sleeve

One day not long ago I got into an extended argument with my buddy Jorge. He’s a conspiracy theorist and a flat-earther, so the wisdom of getting into an argument with him about casino gambling is questionable to begin with.

But here was his premise:

The casino cheats at all their gambling games with the exception of craps.

His theory is that craps uses dice that you can see and touch, so it’s impossible for the casino to cheat at craps.

I tried to explain to him that the casinos have no incentive to cheat, but it was to no avail.

I’m not sure that he even understood the point I was trying to make about how the house edge guarantees that the casino will win money in the long run.

Even though he eventually pretended to understand the house edge, he still claimed that the casinos have an incentive to cheat because they’re greedy.

In this post, I’m going to look at some of the factors Jorge overlooked in his argument.

A Closed Casino Makes No Money

Any casino caught cheating – doing something to interfere with the randomness of their games – risks losing its license to operate. In most states with casinos, cheating at a gambling game is a felony, too.

Spending time in prison for something like that is as incredible a disincentive as a I can think of – except maybe the death penalty, which is just silly.

If you’re running a casino with games that aren’t random, and you get caught, one of the first things the regulatory authorities are going to do is shut your casino down.

Some might argue that the casinos are cheating already by offering games that are mathematically and inherently unfair, but that’s a different perspective.

People like Jorge think that the casino can control what happens next on the roulette wheel.

That’s just not how it works.

Of course, Jorge would say that the casino oversight authority is probably taking money to look the other way.

But when’s the last time you read an expose about a casino cheating and getting caught?

If this were really going on, you’d read about it at least sometimes.

Casinos Make Plenty of Money from the House Edge without Needing to Resort to Cheating

Let’s look at how a roulette game works and makes its money.

You have 38 possible outcomes on a spin of the roulette wheel, but the payouts are set as if there were only 36 possible outcomes.

Here’s an example:

A single-number bet on the roulette wheel has a 37 to 1 probability of winning. You have 37 ways to lose and only one way to win.

That bet pays off at 35 to 1.

So for every 38 spins, you’ll see one win of 35 units, but you’ll see 37 losses of one unit.

The difference – those 2 units – is the house edge.

You can even quantify that as a percentage of each bet that the casino expects to win in the long run.

With roulette, it’s 5.26%.

An average roulette table might have 4 players, each betting $10 average per spin, 50 times per hour.

That’s 4 X $10 X 50, or $2000 per hour in action on average.

5.26% of that action is $105.20 per hour in profit for the casino.

And that roulette is probably running 24 hours a day, which means the casino is average almost $2500 per hour in profit from that one roulette table.

Many reasonable-sized casinos have 4 roulette tables operating per day, which makes roulette a $10,000 per day game.

And that’s with no cheating required.

Casinos Make Money from Players Who Spend More Time Gambling

In the short run, anything can happen in a random game. That’s why some people you know occasionally come home from the casino a winner.

I know people who insist that they come home from playing the slot machines at the Winstar as a winner at least 50% of the time.

I don’t believer them, but I do believe that they come home a winner 20% of the time or more.

How does the casino make money if they have gamblers coming home as winners?

Think of it this way:

The casino doesn’t really pay off the winners itself. They’re using the money from the losers to pay off the winners, and they have money left over after doing so.

Many Slot Machines on a Casino Floor

In the long run, the casino’s actual numbers are going to resemble the casino’s predicted numbers.

The quickest way to get to the long run is to have lots of players making lots of bets over a long period of time. The more players betting, the shorter the period of time has to become.

In other words, the casinos are rooting for some of the players to win.

After all, if no one ever won, the casino wouldn’t have any customers at all.

The Casino Doesn’t Cheat Because You’re Using Your Players Club Card, Either

Some paranoids like Jorge think that using your players club card increases your probability of losing on a gambling machine, too.

But where’s the incentive for the casino to do that?

If you accept, like I do, that casinos are going to do what they need to in order to make the most money, it will become clear quickly that they have an incentive to offer the same odds to their regular players as they do everyone else.

The surest way to win money from a casino gambler over time is to keep that gambler playing.

This means having slot machine games with a high hit ratio.

And the players club members are incentivized to gamble more often so that they’ll spend more time on the machines.

More time on the game always means one thing to the casino:

More profit.

Poker and Sports Betting Aren’t the Same Thing as Casino Games, but the Casino Still Doesn’t Have to Cheat

When you’re playing poker with other players at the casino, you’re not competing with the casino for their money. You’re competing with the other players at the table.

How does the casino make its money?

They usually take 5% from each pot to pay for the table. This is called the rake. The number can be lower or higher depending on the casino and the stakes, but 5% is pretty average.

The casino has no interest in who wins or loses a hand of poker. They got their money before the pot was awarded.

Simple Casino Road Sign With Arrow

Many casinos also have sportsbooks. For the most part, the sportsbook doesn’t care if you win or lose, either. They use the losing bets from one side of a bet to pay off the winners of the other side of that bet.

But they make you risk $110 to win $100, which means if you have a 50% chance of winning, the casino makes a healthy profit even when you win.

Why Does It Matter if You Believe the Casino Is Cheating?

Your goal in life, if you enjoy casino gambling, should be to make rational decisions based on reality – not fantasy.

If you avoid playing casino games because the house always has an edge, that’s fine – that’s a reasonable decision.

On the other hand, if you avoid the games because you think they’re not random, you’re making a decision based on a faulty premise.

That might not be terrible in this case, but over the course of a lifetime, a series of decisions based on faulty premises isn’t likely to lead to a happy or profitable life.

Conclusion

When most people say they think the casino is cheating, they’re questioning whether the games are random. They think the casino controls the outcomes so you can’t win.

I hope you understand after reading this post that you understand why the casinos have no incentive to offer games that are less than random.

They just don’t need to.

In fact, it wouldn’t make sense to risk their profits based on that kind of silliness.