From the glitz and glamour of the Las Vegas strip to the illegal pai gow parlors of New York City’s Chinatown, casinos come in all shapes and sizes. But one thing all have in common is that they make money. And lots of it.
Every casino game, whether blackjack, poker, craps or video poker, has a built-in advantage for the house. This advantage, which is mathematically determined, can be as low as two percent, but it adds up over the millions of bets placed by players. And this is how casinos make enough money to pay for their elaborate hotels, fountains, pyramids and towers. The advantage is called the house edge or expected value, and it can vary based on the games offered, the rules of play, and payout percentages for different machines.
In the early days of casino gambling, legitimate businessmen were hesitant to invest their funds because of the industry’s seamy reputation. But organized crime figures saw the potential, and started funneling cash into Reno and Vegas. Some mobster-run casinos became so successful that they were able to generate more than enough revenue to offset their illegal rackets, including drug dealing and extortion. In many cases, mobster owners took sole or partial ownership of the casinos and even controlled them from inside. They influenced outcomes by using intimidation and threats against casino staff and by threatening to expose the criminal activity of their rivals. This style of casino was eventually supplanted by the corporate model.