What is meant by 'theoretical loss' in a casino context?

In the context of a casino, "theoretical loss" refers to the estimated amount that a casino expects to win from a player based on the odds of the games they are playing. This figure is derived from the house edge, which is the mathematical advantage that the casino holds over the players in games of chance.

When a bet is placed, the casino uses the house edge to calculate the average expected losses of a player over time, allowing them to project how much revenue they can expect to retain from each player. This estimation is crucial for casinos as it helps them to forecast earnings and manage their operations effectively.

Understanding this concept is important for casino management and marketing strategies, as it influences player incentives, promotions, and overall business planning. It provides insight into player behavior and helps in determining the profitability associated with different gaming activities.