You stroll into the twinkly, noise-filled casino with your wallet full of cash and a plan for a couple hours of fun, reasonable gambling. Hours later you’re wondering where your money went. That’s because casinos are expertly designed to trick people into spending money. They use lights, sounds, and physical design to keep people playing for as long as possible. And they do it all with a smile on their face.
The house edge, which is built into all casino games, gives the casino a virtual guarantee of gross profit. This advantage makes it very difficult for players to win. And to offset this mathematical expectation, the casinos offer big bettors elaborate inducements like free spectacular entertainment, transportation, elegant living quarters, and more. For less-big bettors, the casinos often offer reduced-fare transportation, hotel rooms, and complimentary drinks and cigarettes while gambling.
The sunk cost fallacy is at play when people feel they need to continue betting after losing some of their money. To suck players back in, casinos offer rewards programs where people earn points on every dollar they play—even if they lose it. This can make the loss of $700 sting a bit less when you’re still racking up enough points to earn a free meal at one of their restaurants. It’s this sort of manipulation that makes the casino business so lucrative. Despite their allure, there’s no reason to gamble with money you can’t afford to lose.