March 28, 2023
If you are using a licensed and legitimate mobile casino, you can rest assured that all games on the casino will be random and fair. Regulatory authorities ensure that mobile and online casinos use random number generators and don't engage in illicit activities.
When we talk about casino games being random, we are referring to the outcome. In other words, a completely random game is not rigged in any way to always land on a particular result. Random number generators are software that ensures that outcomes at online casino games are random.
Since casino games at mobile casinos have random outcomes, how do mobile casinos guarantee their profits? After all, licensed mobile casinos are businesses that need to generate a profit to stay operational. A business cannot rely on luck to make profits.
If you are wondering about the same thing, you are in the right place. Here is our complete guide on how mobile casinos make money, even though all games at mobile casinos have random outcomes.
House edge is the strategy mobile casinos use to generate profits on all gambling activities. To understand how mobile casinos generate a profit, you need to know how the house edge works.
The house edge is a mathematical advantage that mobile casinos have over players playing the gambling games offered by the casino. This mathematical advantage does not affect the randomness of the outcomes of the gambling games. The mathematical advantage allows casinos to design gambling activities in a way that guarantees them a profit if many people participate in those activities.
In simple terms, the house edge is a percentage that determines the amount of money the casino gets to keep as people participate in a gambling activity like video slots. For example, let's say the house edge is 5%. If the casino accepts bets worth $100,000 in one day from all the gambling activities offered, the casino will keep 5% of that, which is $5000.
First up, we have slots or video slots in the case of mobile casinos. Video slots are some of the simplest gambling activities. You enter some money into the slot machine or deposit a certain amount at a mobile casino using cash transfer methods and then press a button to spin the slot machine.
If all the sections of the slot machine land on a winning combination, you win. However, if they don't land on a winning combination, you lose the amount you used to spin.
The average house edge for video slots at mobile casinos is around 10%. Let's say that a video slot has a house edge of 10%. The house edge will ensure that the mobile casino receives 10% of the total amount gambled by the players on that video slot.
Some people will win money from that video slot, and some will lose. However, on average, for every $100 that users spend on that video slot, the mobile casino will get $10. It does not affect the probability of players winning at the video slot.
Let's say ten players play the video slot. Each of those players uses $10 on this video slot. If one player loses their $10 and wins nothing, the 10% house edge suggests that the remaining nine players might win their money back.
In the same way, if two players lose their $10 on a particular video slot, the 10% house edge suggests that the remaining eight players might be able to win some money on top of their gambling amount. However, this is an oversimplification. The house edge works on an average of thousands of players.
Sports betting and esports betting also use house edge to ensure that the mobile casino makes a profit. However, the system is not the same as the one used for other gambling activities like video slots. Instead, mobile casinos use betting odds to ensure a profit.
For example, let's say that an esports final for a CSGO tournament is taking place. The chances of either team winning the finals are 50%. The mobile casino will set the odds for Team A winning the match at 49% or 48%, and the same for Team B. When we translate these chances into the Decimal Odd format, they become 1.48 and 1.49.
With odds of 1.49 for one outcome and 1.48 for the other one, the casino guarantees a profit of 1% or 2%. It is also an oversimplification of the process, and the way odds get set at mobile casinos is quite complicated.
The house edge works for other gambling activities, similar to how it works on video slots. The lowest house you can find in most mobile casinos will be on blackjack, which can sometimes be as low as 0.8%.
Another popular gambling game where you can find a relatively low house edge is baccarat, where the house edge stays anywhere from 1.01% to 1.24%. The house edge for American poker, which includes a double zero section, is about 5.26%.
To implement the house edge effectively, casinos use other strategies like maximum wager and side bets. Also, the house edge varies from table to table.
While the main way mobile casinos generate a profit from gambling activities is by implementing the house edge, it doesn't explain how they make money from poker.
The thing is, house edge only works when the dealer is a part of the game you are playing, or in other words, you are playing against the house, which is the casino. Even in blackjack, while you have other people as your opponents, one of your opponents is the dealer. Since poker does not involve a dealer playing against you, the casino cannot implement a house edge.
However, a card dealer is always available at a poker table, and the poker table has to make money to justify the dealer's salary. One of the main ways that casinos make money from a poker table is the rake.
Essentially, the rake is a fee that poker players must pay in order to participate in a game of poker and get facilitated by the online casino for the poker table. This rate can be there in the form of a pot rake or in the form of a time collection.
The rake is something that you will only have to pay for if you are playing live poker. If you opt for regular online poker at a mobile casino, you won't have to pay the rate. However, this creates another question. If mobile casinos only charge the rate for live poker, how do they make a profit off video poker?
It may be a huge surprise to you, but mobile casinos don't make any direct profit from video poker. Yes, mobile casinos provide a gambling activity on which they make zero profits. Well, why do they do that?
The thing is, poker is a popular game. A person looking for a mobile casino will likely ignore the ones that don't offer video poker. For that reason, mobile casinos usually offer video poker even though it generates 0 direct profit.
Besides that, mobile casinos don't use video poker as a direct profit-generating activity. Instead, mobile casinos use video poker as a gateway to attract users and have them try out other features that generate profits.
Mobile casinos cannot use several profit-generating strategies that regular land-based casinos use. Regular land-based casinos offer hotel rooms, offer drinks at the bar, offer food, and host shows that people can buy tickets for. A mobile casino cannot do all those things.
The way that mobile casinos make a profit is by implementing something called the house edge. The house edge is a percentage that determines the amount of money the casino gets to keep from all the people participating in gambling activities at that casino.
The house edge has nothing to do with the randomness of the outcomes of the casino games. The house edge helps mobile casinos generate profits while keeping all gambling activities fair and random.
With roots in the vibrant city of Lagos, Amara Nwosu is MobileCasinoRank's premier researcher. Melding rigorous analysis with an intuitive grasp of the mobile gaming sphere, Amara unravels the intricacies of the casino landscape for readers worldwide.