The heart of Las Vegas is gambling. As an example, at Caesar's Entertainment revenues are derived from gambling (72%), hotel rooms (11%), food and beverage (9%) and other (8%). Other revenue streams include shows, merchandise, and management fees. [Source: Caesar Entertainment's 2003 Annual Report]. Caesar's Entertainment includes: Caesar's Palace, Bally's, the Flamingo and Hotel Paris
Las Vegas did not pioneer para-mutual betting, but it has set an expectation on losing. Most casinos have house odds between 92 and 98%. This means that customer payouts average 95-98 cents on the dollar. Certain draws and hands are set to be automatic house winners.
Roulette provides a simple example. In Roulette, there are 38 numbers, numbers 1-36, 0 and 00. When betting that a single number would be rolled, a 100% payout would be 38:1, but Las Vegas only offers 36:1, meaning that the House wins 1/18th of the time on each such bet.
Bet Type | Available #'s | Odds | House Payout | Customer Payout |
Bet on Number | 38 of 38 | 1 : 36 | 5.3% | 94.7% |
Bet on Line | 36 of 38 | 1 : 1 | 5.3% | 94.7% |
Minimum Bet | Spins per Hour | Actual Odds | Wagers per Hour | Customer Hourly Earnings | House Hourly Earnings |
2 | 30 | 94.7% | $60.00 | $56.84 | $3.16 |
5 | 30 | 94.7% | $150.00 | $142.11 | $7.89 |
10 | 30 | 94.7% | $300.00 | $284.21 | $15.79 |
We can see that in Roulette, that the House wins 5.7% of the time. At a $10 minimum table with 30 spins per hour, a total of $300 will be spent. On average, $300.00=$284.21+$15.79 will be split $284 to $16 between the customer and the House.
Description | $2 Table | $5 Table | $10 Table |
Sub-Total Visit Hours | 48 | 48 | 48 |
Hours for Sleep | (16) | (16) | (16) |
Hours for Dining | (6) | (6) | (6) |
Sub Total Available Houes | 26 | 26 | 26 |
% Assumed Hours Gambling | 50% | 50% | 50% |
# Assumed Hours Gambling | 13 | 13 | 13 |
House Take per Hour | $3.16 | $7.89 | $15.79 |
Total House Take per Visit | $41.05 | $102.63 | $205.26 |
On an average visit to Las Vegas, betting only Roulette creates an average loss of $205.26 per visit. The three assumptions used are: an average visit is 48 hours, 50% of waking hours are spent gambling, and each wager is $10. Even with a small bet of $2, the average loss incurred will be $41.05 per visit.