Bonuses and RTPs: This is how casinos calculate their profits

A casino is a business, just like any other. To survive in the market, a business has to be profitable.So where did the idea come from that in a casino, regardless of experience, players should be able to win high prizes? Everyone has seen the glittering palaces of gambling industry on screen and has probably invested their money in slots, roulette or blackjack more than once. It's more than just gamblers' online casinos and other providers who want to make money to make ends meet. You should also keep in mind that when choosing a legitimate casino, you need to read reviews and player opinions about it, this is all information you can find on the popular website about online casino reviews. Information about bonuses and terms, popular slots and more - all this information can be found on these kinds of review sites.

Any gambler who has wondered how online gambling sites predict their profits will know the answer today. Because every casino is a business and needs to calculate its income and expenditure to understand how much it can earn. If you want to know how this calculation works and the most important factors to consider, you should read on.

Bonuses and Their Impact on Casino Profits

Casinos offer various bonuses to their players, such as welcome bonuses, reload bonuses, and free spins. These bonuses are used as marketing tools to attract new players and retain existing ones. However, they also have an impact on the casino's profits. The cost of providing bonuses is factored into the casino's overall expenses. If the bonuses are too generous or if too many players take advantage of them, the casino's profits may be negatively impacted.

What does a casino financial calculation look like?

Calculating a profit and loss is a complex process. Several factors are taken into account to ensure that it will be profitable in the long term. The aspects that are taken into account in calculation are size of the bets, payout ratios for different games and operating and marketing costs.

A cost and revenue analysis must first be carried out for a casino to be profitable. Among the costs to be taken into account are the following:

• The costs of setting up and running casinos (technology such as a real money app, individual advertising campaigns, server costs, etc.).
• Costs of providing games (e.g. licence fees to software providers)
• Costs of offering bonuses and promotions. On the other side are the casino's revenues, thanks to its players. These typically consist of the following:
  ○ Bets
  ○ Winnings
  ○ Losses

After factoring in all the expenses and revenues, it is possible to ascertain whether the casino has made a profit by the end of the year. If the revenues exceed the expenses, the casino is profitable, but if not, it will incur a loss, which may raise concerns about its business.

Key cost factors are explained in more detail

In the previous heading, we briefly discussed the costs included in the calculation scheme. In the following section, we would like to expand on these and explain what they consist of so that you can draw your conclusions.

Marketing, server and staff costs should not be overlooked

The marketing department certainly takes up the most significant part of the overhead. Providers need to look after their customers and attract attention. Without customers, there is no business. This cost item is made up of several factors, such as:

• TV, radio and press advertising
• internet advertising, brochures and posters
• event and sponsorship costs

In addition to marketing costs, there are also server costs. An online casino cannot function without functioning servers. It is on external servers that all user data is stored, which can include payment details, location and any other sensitive information. The cost of renting servers depends on the size of website and traffic it generates. The more games are offered on site, and more gamers challenge their luck there, the higher server costs will be. Another factor that is overlooked is staff costs. These result from the staff employed by the casino. These include customer service, programmers responsible for technical implementation or administrative staff. Here, too, costs depend on the size of the company.

Bonus programmes and RTPs are part of the calculation

Another important tool for calculating winnings is the so-called Return to Player (RTP). Return to Player (RTP) is a percentage that indicates the average amount of money that a player can expect to win back over a long period of time. For example, a slot machine with an RTP of 96% means that for every $100 wagered, the player can expect to win back $96. RTPs are important in casino profit calculation because they help casinos determine how much money they can expect to make from each game. Casinos typically choose games with higher RTPs because they have a better chance of generating profits over the long term. However, it's important to note that RTPs are theoretical and may not necessarily reflect the actual payouts that players receive.

RTP is, therefore, equivalent to the house edge. House edge tells you how much money the casino wins on average. The player return ratio shows how much money is paid out to players on average. Players are not guaranteed to win every time they play. The higher RTP of a game, the greater chance of winning money.

Another means by which online casinos calculate winnings is through bonus programmes. These are offers where players can receive extra credits or other benefits. Bonus programmes can take many forms.

Almost all gambling sites offer a welcome bonus. They induce players to create their accounts, so logically, only new users on the respective gambling site can take advantage of it. After creating an account, players can make a deposit and collect deposit bonus at the same time. The potential of this bonus is the highest and depends solely on the amount gamer decides to deposit. Often, the bonus amount can oscillate as high as several hundred per cent.

Other promotions include free spins. These are credited to players' accounts and can be used on online slots. On which slots? This is more precisely defined in terms and conditions of the promotion, although the best casinos allow them to be used on machines produced by a specific developer. Cashback is also a very popular promotion, allowing players to recoup money lost due to making wrong bets. At the very end, we will mention VIP programmes. These are designed for the most active players, while prizes that can be won may surprise you. The most prestigious casinos allow you to win watches and even cars.

Promotions are essential for online casinos to attract new players and keep existing players happy. The more attractive a casino's bonus programme is, the more likely players will remain loyal and continue playing. The more loyal customers, more money provider makes. These two factors must be considered when calculating profits because amounts settle at a very high level here.

Players also hit the jackpot from time to time

Finally, online casinos must also take into account the fact that individual players repeatedly collect large winnings. This has its advantages and disadvantages. On the one hand, they can write a success story, and other games players can see that high winnings are possible. On the other hand, a high win also means failure for the casino.

Of course, the supervisors would prefer to see more money coming into casino on average, but it should also be remembered that individual players can make large profits and that, ultimately, casinos can also remain profitable.

Land and Online Slots: Which Slots have a Better RTP?

Most players who start playing online slots after switching from land-based casinos or playing both online and land-based establishments soon come to the conclusion that playing online slots is much more profitable. Although the world of gambling is full of misconceptions and wrong beliefs, this is not one of them. In fact, in most cases, playing online slots is more profitable.

Most online slots, even if they are exactly the same as land-based casino games, have a much higher payout percentage. Land-based slots usually have a 70% to 90% payout rate, with very few games exceeding 92%. In online slots, returns below 94% to 95% are generally considered bad, and many newer games have RTPs as high as 96%.

However, this is not some conspiracy against land-based casinos. The reason why slots in land-based establishments will make less profit is because such casinos are limited in space and, in order to cover costs and make a profit, they have to make more money from the machines placed on the premises.

Online casinos, on the other hand, can have hundreds or even thousands of machines available to play at any given time without any physical restrictions. Thus, they can afford to offer games with a much higher RTP.

Conclusion

We should pay attention to the fact that new suppliers are increasingly joining the established ones. In that case, we can assume that gambling is very lucrative. Casinos calculate carefully, so they always have a slight advantage. However, with a bit of luck and skill, it is also possible to make a profit for a single player. You might even manage to win an attractive prize!