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nattekut

how can casinos make money if they give away that much for free?

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Posted (edited)

 Some people are asking themselves how in earth casinos online as well as real life casino can make profits when they give away so much money for free every single day. The answer is simple casino platforms are huge money making machines. They give the intention they are here to make money for gamblers but in reality every single casino wants to take as much money as possible from their gamblers.

Why do gamblers keep taking that? 

Gamblers just love to gamble and chase the rush to hit nice scores or huge multipliers. Other gamblers keep getting attracted to the game when seeing others win. 

 

But how do casinos are profitable when giving that much money away for free every single day.

I am going to take the stake races into account and specifically todays 5,000$ mega race. 5,000$ is a huge amount to giveaway just like that to the winners of a race. But we all know that the only party that is making a guaranteed profit is the casino. Due to the house edge of overall approximately 1% on all games means that stake no matter what in the end makes 1% profit on the wagered amounts. So easy said they make 0.01BTC profit if 1BTC is wagered.

Todays challenge. Its a pitty that only top 10 is visible. But in todays challenge the total amount wagered by the top 10 was approximately 70BTC which means only in the 1 hour during the challenge stake made about 0.7BTC with their house edge on the wagered amount. But there were a LOOOOOOOT more participants. I for example was in 250th place with 0.007BTC wagered.

0.70BTC is approximately 7,000$ that they only made from the top 10 wagers during the races.  So this only includes the top 10. I am sure that total wagered of all those placed 11th or lower also is a significant amount. 

 

And this is only based on calculation during the 1 hour race but people are gambling on stake 24/7. So it really isn't really such a 'big deal' for GOOD WORKING casinos to give away lots of money daily and stay highly profitable. Cause it is just the way it is. The casino is the only party that is guaranteed profits cause of the house edge. 

 

So its very simple. You can see thousands of green bets and you can see people hitting huge multipliers and win huge amounts, all this amounts are paid by other people loosing their money and while this happens a casino is guaranteed their profits due to the house edge which is their guaranteed profit margin on al games played.

Edited by nattekut

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the casino already knows the money they give away for free,, will eventually come back to the casino.. with the coupons and the rewards rain.. that stake gives out.. is to keep you playing.. there is no loss for them..every thing is still profit.. real casino does comp points. which they provide what the casino has for that casino. only meant to spend in that casino.. anything that seems free. it was already paid for by you in a way..  so anything is not for free. casino  can afford for giving out stuff for free.. 

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The truth is casinos dont give that much money for free. Stake and Primedice are the only casinos I've seen offering free money almost every day through challenges, giveaways and races so I expect them to not be very profitable right now. Other casinos rarely have some promotions and even those pay only a few thousand dollars. It's true that other casinos have deposit bonuses but with those huge wager requirements I don't expect lots of people to make any money out of that. 

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well as nattekut said casino's aren't charities.. they are here to make money. 

and as vlad26 says casino "dont give that much money for free". 

but then some casinos give more in promotions than others, even live casinos, I played in a poker tournament a week ago and was given free entry to a sunday satelite tournament (that I didn't play as I was busy getting drunk in stake on Sunday 😂 but anyway lol...) 

i think the casinos that have the most success are the casinos that do give a lot of their profit back to their players and don't just take take take, because then we don't stay around for long. 

that's why stake is popular i think well one of the reasons because it does give quite a bit back from profits i think. 

also the staff in the place are important live and online, at the end of the day you play somewhere you enjoy playing and the staff are a big part of that. I think big difference between online and live, is players get to know each other better, as you can play every day online if you want, and that's not always that practical in live casino - so we get to know each other better etc. 

but back to promotions... i think you make good point nattekut , and i think my answer is casinos can't give away money for free, but the ones that return some of the profits back to players like stake are the ones that do good in the long run and is part of the reason why we like playing!

 

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Online Casino's make a ton of profit by conducting giveaways and Betting Challenges. The primary objective is to keep users engaged to their website. 

Giveaways are never credited to your personal wallets, they are credited to your stake wallets. The amount given as a giveaways will be always less to the minimum amount required to withdraw to your personal wallet. So what do you do with that money? you again gamble.

Only 3 or 10 individual win a challenge, but most of us participate thinking that we do have a chance and enter a pool.

You never make money more that you loose, they are always in profit. They are still running those Giveaways and contest because they still need more users. As soon as they reach their target, you will see a change in their strategy.

 

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Because most of the online casinos give some of their advertising revenue as it stimulates players to play more and invite new members. Which personally is a much better strategy for me.

So far, I have not seen a casino that is not profitable and still functioning so that you are grateful for the owner's choice to set aside for the players and not for advertising

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Those funds that are distributed online casino is a kind of advertising to attract users. After all, advertising is the engine of commerce. Some large companies spend on advertising campaigns from 15% -50% of their income, also and casinos. And I think these are justified actions. After all, no one wants to work at a loss.

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Gamblers nlike to gamble.if a casino dont give free money to gamblers to play they will.lose their money and leave on another casino.that  gives some free money

Stake and Eddie spread some.money with challenges races tips.and rains but most of them.return to the casino.

And all.are happy and casino and players. So i think its a good way of advertising their casino .although the reduced faucet to low to make a big self race to gain some money.but they dod it to protect casino from.farmers with 100+ accounts gaining from faucet

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3 hours ago, nattekut said:

 Some people are asking themselves how in earth casinos online as well as real life casino can make profits when they give away so much money for free every single day. The answer is simple casino platforms are huge money making machines. They give the intention they are here to make money for gamblers but in reality every single casino wants to take as much money as possible from their gamblers.

Why do gamblers keep taking that? 

Gamblers just love to gamble and chase the rush to hit nice scores or huge multipliers. Other gamblers keep getting attracted to the game when seeing others win. 

 

But how do casinos are profitable when giving that much money away for free every single day.

I am going to take the stake races into account and specifically todays 5,000$ mega race. 5,000$ is a huge amount to giveaway just like that to the winners of a race. But we all know that the only party that is making a guaranteed profit is the casino. Due to the house edge of overall approximately 1% on all games means that stake no matter what in the end makes 1% profit on the wagered amounts. So easy said they make 0.01BTC profit if 1BTC is wagered.

Todays challenge. Its a pitty that only top 10 is visible. But in todays challenge the total amount wagered by the top 10 was approximately 70BTC which means only in the 1 hour during the challenge stake made about 0.7BTC with their house edge on the wagered amount. But there were a LOOOOOOOT more participants. I for example was in 250th place with 0.007BTC wagered.

0.70BTC is approximately 7,000$ that they only made from the top 10 wagers during the races.  So this only includes the top 10. I am sure that total wagered of all those placed 11th or lower also is a significant amount. 

 

And this is only based on calculation during the 1 hour race but people are gambling on stake 24/7. So it really isn't really such a 'big deal' for GOOD WORKING casinos to give away lots of money daily and stay highly profitable. Cause it is just the way it is. The casino is the only party that is guaranteed profits cause of the house edge. 

 

So its very simple. You can see thousands of green bets and you can see people hitting huge multipliers and win huge amounts, all this amounts are paid by other people loosing their money and while this happens a casino is guaranteed their profits due to the house edge which is their guaranteed profit margin on al games played.

You forgot to mention that in the following hour after the Mega race, the $5,000 that went to all the stake players who won immediately lost it and gave it right back to the casino.. lmao.. the circle of life! So not only did they get a boost in profits of 0.70 btc in 1 hours time from the mega race with the top 10 players trying to out wager each other but they also got the winnings from the remaining contestants plus the original $5000. Not a bad business to own, huh.

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I have often heard that most businesses run in the red, or do not make profit, for the first 5 years.  I have also seen that Ed has mentioned that Stake has still not been in profit since its inception, but that is to be expected from what I understand.  I am sure it varies depending on the type of business, but business is business.  Even with all the giveaways, promos, and benefits that Stake gives out, we as players are most likely not taking those funds and running.  We put them back into Stake looking for the big hits and profits, and thus in the long run the casino not only gets the edge in normal gambling activity, but in most cases probably gets back what they gave away, as others have mentioned...

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6 hours ago, nattekut said:

Todays challenge. Its a pitty that only top 10 is visible.

I liked your analysis.  Another answer of course is they expect all people will do is lose that coin back to them.  There is no such thing as a free lunch!

Good news is that the number of winners in the races is adjustable, you can now see the top 10, 25 or 50, so there's never any reason not to know what you have to "get to" in order to place in the top 50 at least.

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Compared to what they bring in, the amount they give out in the form of coupons/giveaways/ect is most likely a very small fraction. Look at 99% of peoples stats here are all red and with so many users it adds up fast. It's also a lot different being handed 20 dollars in cash compared to that amount in btc being added to your account. Much like using a credit card it doesn't feel like it's as much and thus I think you're much more likely to be risky with it which inevitably ends in the sites favor.

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When they give away money people usually play with it and when they start having fun and bust they are eager to buy bitcoins to deposit and play easy so they make money. 

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I think that what is distributed for free, in fact, a miser and a casino need attendance, ordinary players who sit there every day and collect a free coin. The profit comes from players who play at high stakes and maybe someone spent a month collecting free coins, losing them, wants to return and invest their own money and also lose them. all the same, few people control themselves and really earn, albeit a little but confidently without haste

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Casinos are business grounds that are meant to take our money no matter how good and manipulative we are. We all know that. But for stake to constantly do giveaways is actually a big contribution from them. I don't know of a lot of sites that do so much giveaways everyday. But I think they use the giveaways to lock their customers down.

But still, they still give out which is not mandatory to them. They can decide not to give out and keep all the money and just do weekly challenges and give out rains, at least that is what they do on Primedice. But no matter how much they make per day, we should be greatful that they chunk out so much in a day. 2 races and 1 ETH challenge each day is something huge.

But I must also give it to you on your analysis. They are top notch.

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Casino is a huge business, it think it's same like how the real life casino works. They prepare some exclusive benefit for highrollers such free hotel, tickets and many else. Stake give some rakeback to some players and many other freebies. I'm not sure though how about crypto casino.

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I have no idea about real casinos as I have never been to one, and so can't say how they try to attract players.

But with online casinos - I have been around numerous online casinos for the past 6 to 7 years. Almost all of them have some sort of "free coins". As hourly claimable coins, daily, rains, trivias and many more popular types to keep people on the site for extended periods and also other types as you mentioned deposit bonuses. Just to make the user feel more positive when depositing. 

The race example you mentioned - yes in theory with the house edge and provided all bets occur to the probability (say for a 50%, 50 wins in 100 rolls) then when the house edge comes to play they will earn as you mentioned. There will be few players than win, that win big and most that lose a lot and lose a huge amount. So I'm sure they make more than they give the fortunate players that placed high up in the race. 

15 hours ago, nattekut said:

Its a pitty that only top 10 is visible.

No you can actually change the amount of users you can view (same with bets history). On the right theres a drop down to choose from 10, 25 and 50. :) 

Going back to topic, most sites in fact give these free coins as coins to play with. Where most of them come back to them and sometimes even more. The reason? Well we are all greedy xD We tend to have emotions even with the "free coins" we got. Say we had 10k sats and we got 2k rain - we may play a game and lose 1k and then try to win that back and lose 2k, and then using our balance (if we are greedy) and maybe lose till we end up busting our entire balance or most of it. That is why most sites require the users to wager a certain % or entirely before they are able to withdraw. They simply know majority will be greedy and lose all or more, or the house edge will come to play and you will lose some amount.

Its very common. The people who win huge amounts are the lucky ones - and if they don't cash out or play small amounts they will come back to a small bank roll. The other people who win are the smart ones. Not doubling or increasing their amounts on a few red rolls, but instead trying to win on a decent multiplier and stop or stop after losing a certain amount. 

These free coins they give in many forms is still amazing and it's a lovely way for the lucky ones to win more :) They have good strategies to keep their users hooked - I know I am but it's the only place I would genuinely deposit more and play on. 

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18 hours ago, nattekut said:

And this is only based on calculation during the 1 hour race but people are gambling on stake 24/7.

As I said earlier I liked your analysis, but this line also makes an important part.  While it should not make much difference there is a good chance that gamblers will start to become conditioned to the races and play mainly during those times.  Especially if there is a regular schedule or something.  As you will note, so far they are announced a little in advance and the times vary a bit, though 12 to 1 GMT has happened twice now.   Not a real danger now, but a potential threat down the road.

My sense is the managers like races because, as you note, it encourages playing, and while active chat and forums are nice, play is how they make their money!

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its true nowadays all casino make profits,also its true the free money dropped by admins its a small fraction of their profits beside that i also had from eddie few days before stake now just reach upto break even now.but pd will generate profit.we are so small players .some hidden players played huge bets and lost so much like yesterday some one bet 10 btc but  lucky that bets in green like that so many players are in ghost mode play big bets and lost.but still stake distributed so many free coins to players it's 100% true.

we are also lucky to get free drops  and few of them within us converted to good profit from free coins too.

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33 minutes ago, wry said:

As I said earlier I liked your analysis, but this line also makes an important part.  While it should not make much difference there is a good chance that gamblers will start to become conditioned to the races and play mainly during those times.  Especially if there is a regular schedule or something.  As you will note, so far they are announced a little in advance and the times vary a bit, though 12 to 1 GMT has happened twice now.   Not a real danger now, but a potential threat down the road.

My sense is the managers like races because, as you note, it encourages playing, and while active chat and forums are nice, play is how they make their money!

This could be but I personally do not think that the races will affect people playing only during races. A casino works 24/7 with continuous bets. The races will only bring peaks in traffic and wager amounts during those periods but it will not effect gameplay I guess. the only thing that can happen in my opinion is that smaller fish accumulate or try to save as much as possible to take a shot at the races. but it stays the same if they bust during the race or over a longer period of time during the day.... at the end it does not matter 

19 hours ago, williamshennie9 said:

I'm not sure about other casinos, but Eddie has said multiple times that Stake is operating at break even for quite a while now. So according to him, Stake is not profitable at the moment.

yeah this could be ofcourse. But making profit or being profitable is not the same. Probably they are making profits but if profits from the house edge are mostly spend on giveaways or other free money, their fixed monthly costs, paying wages from staff, etc. 

So the post I made was to show how a casino make money even when giving away free money daily but I did not say that they are profitable. Everything needs to be taken into account. Cause a platform like stake isn't running for free. Such a platform brings huge expenses like for example paying the developers for creating and coding the games

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Posted (edited)

Where they know eventually that are so many people that will overcome theyr greedy and bust.

Providing the casino money is will always be a real thing that's how Casinos profit more cause of newbies and greedyness.

On online casinos its the house edge as always unless the profit becomes negative ofc.

Edited by DreamStage

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