The House Always Wins
This is common saying in life but is it really true with respect to gambling? Every game you play when you gamble at a casino is designed so that the casino profits. From Roulette to Poker, they often give the impression that it is not down to pure luck but more skill and strategy by the gamblers themselves. A casino is a business and just like every other business they need a plan for profit. And boy do casinos ever profit.
Casino’s do not rely on one time bets for their profits, they rely on the gamblers coming back to win more or win their money back. They odds of winning twice or three times become smaller very quickly. For example, in roulette, if you bet on the ball landing on one of the numbers in the first third, you have a 1/3 chance of winning (and therefore your payoff is what you bet x3). But if you bet again next round evens, and then next round on the number 6, all of the sudden your chance of winning all three balloons to 1/3 x ½ x 1/36 = 1/216. This is where they make their money. The way our brains work means that we do not do a good job of considering the product of these three bets, rather we consider them one at a time. The house wins because the longer you play the closer the house gets to coming through on their calculated edge that they give themselves in these games.
Casino’s usually give themselves an edge of between 5% and 10% of the value you bet. Meaning that they take home a 10% profit on what you bet (though some casinos are known for aiming for up to a 25% profit). So say you bet $100, over time, the casino aims to get back $5-10 profit. If all of these bets are 1 dollar wagers on the Roulette table then the casino has a very good chance of getting that 5-10 from you but if you place all $100 on red in one bet, the casino could easily lose another 100. Casinos always win because they do a great job of keeping you betting, and the more you bet, the more they stand to win.
http://www.investopedia.com/articles/personal-finance/110415/why-does-house-always-win-look-casino-profitability.asp