If you read much about playing casino games, online or at a “normal” casino, you’ll often come across the term “house edge”. If you’re unsure what that means and want a simple answer, you are in the right place.
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House Edge for Dummies
OK, you might not be a dummy. You might actually be very intelligent. You MIGHT even have a maths degree. But if you don’t know what the house edge is, you don’t know what it is.
We can explain it really, really simply. The house edge is the advantage that any casino game gives the house. The house being the casino itself. All casino games are ingeniously designed (and we mean that seriously) so that that the casino itself has a small advantage. This is why casinos are glitzy palaces and you live in a shed in your friend’s garden.
Put another way, the house edge is the casino’s profit margin. When you buy something in a shop you fully understand that they are selling it for more than they bought it. The difference pays the staff, covers the rent, provides a profit for the owner and if everyone is good and honest might even include a bit of tax too.
How is the House Edge Expressed?
The house edge is expressed as a percentage and this is the percentage of staked money the casino keeps. Imagine a raffle that sells 100,000 tickets for £1 each. The organiser takes in £100,000 cash and gives away £95,000 of prizes. They keep £5,000 out of the total “stake” of £100,000 and thus the house edge is 5%.
If we now move our example into the casino and to the roulette table we can see this in a real way. Imagine a standard European roulette wheel with 36 numbers and one zero. There are five players at the table and by amazing (and very convenient) coincidence they end up betting a total of £37, with £1 being wagered on every number.
Zero comes up and pays, as any single number does, at odds of 35/1. So the casino wins on 36 numbers and pays out £35. £37 was initially staked and the casino keeps £1 profit. 1 divided by 37 = 0.027027 (recurring if we can get ever so slightly maths on your ass).
That is 0.27% and that is the house edge on standard European roulette. If we imagine we have a real dummy, playing roulette with a zero and a double zero, we have a slightly different equation. £1 on every number (including the two zeroes) now requires £38. Any win will still pay out at 35/1, meaning the casino wins on 37 numbers and pays out £35.
Out of a total stake of £38 they keep £2. 2 divided by 38 = 0.0526315 and that is indeed the house edge on roulette. So instead of giving the house, the casino, £2.70 for every £100 you bet, you’re giving them £5.26. That’s almost double.
House Edge on Different Casino Games
Roulette is a great example for the house edge as it is the same no matter what the player does and no matter what they bet on. Of course, players can win – unless they bet £1 on every number! Just a bit of luck is all it takes for the player to win but in the long term the casino has the odds in their favour.
In different games there are more variables and so the house edge is less predictable and quantifiable. Slots, for example, don’t per se have an advantage for the casino. The advantage is merely a product of their programming. So, in theory, we can tell a slot to pay out more than it takes in, creating a negative house edge and an advantage to the player.
Sadly, however, casinos don’t do that. They can, at least with some slots, more or less set the house edge to whatever they feel. As such the house edge with slots varies from slot to slot and site to site.
In other games, for example video poker and blackjack, the player’s decisions have an impact on the game. For example, in blackjack, if you keep on hitting and hitting you will lose almost every hand. You’ll win some, by virtue of getting a “natural” blackjack, but you’ll lose the majority of hands and thus create a very high house edge.
In both of these games, in order to achieve the lowest house edge possible and thus give yourself the best chance of winning, you need to play to optimum strategy. For both games there is a call that is correct for any given circumstance.
This brings us onto another issue with many games: rule variations. Although roulette is very simple, the use of single and double zero tables creates a difference house edge. The number of zeroes is effectively a rule but in games such as blackjack the rule variations are more complex.
For example, the more decks that are used, the greater the house edge. If the casino pays out at odds of less than 3/2 for a blackjack, for example at 6/5 or even evens, the house edge is greater. Rules on splitting, doubling and what the dealer hits or stands on also have an impact.
We’ll discuss these and other issues around the house edge another time. However, for now, my dummy friends, all you need to know is that the house edge is the casino’s profit margin and is the percentage of staked cash that they keep on average.
Casino House Edge Explained – Frequently Asked Questions
What is the Casino House Edge?
You’ve all heard the phrase ‘the house always wins’ and there is plenty of truth in the saying. This doesn’t mean that you can never claim a profit at a casino, many people do, but it means that the casino will eventually come out on top versus all gamblers as a whole.
Why is this? It’s all because of the house edge. This slight statistical advantage the casino has over the player ensures that the casino will end up with a profit. Although the bias towards the house isn’t huge, given how much money is gambled, it ensures that the small tilt is enough to keep the casinos in business.
While it’s something to be wary of, it’s not something that should discourage you from having a tipple at the casino. Anything better than average luck will see you overcome the house edge and make your casino experience a profitable one.
Does the casino always have the advantage?
No matter what game you play, the house edge will be active. The only exception to this when playing blackjack at an actual casino and you have the ability to count cards. Doing so gives you the edge which is why casinos are usually keen to crack down on people employing such a tactic.
In all other forms, the odds are always very slightly against you and you can find by how much exactly when playing at online casinos. Every game will list somewhere, usually on the help or info section, the long-term expected return to player (RTP), in most cases it will be between 94%-99%.
On the low end of the scale tends to be slots while at the upper end you’ll usually find the likes of blackjack and baccarat with roulette somewhere in between.
How does the expected return to player work in practice?
The RTP figure is really just the house edge shown in its mathematical form. If we select an online game of blackjack with a RTP of 99%, this means that for every £100 spend on the game, the casino would expect to receive £101.
This is only on average of course and in reality the casinos will go through phases of greater profits as well as significant losses. For the players this means for every £100 spent, they will on average see £99 of it back.
This will naturally not be the case however for novice players with limited understanding of how the game works.
How does the casino always have the edge?
Casino classics are built to favour the house in their design. In roulette for instance, the addition of the green 0 (plus 00 on American tables) is enough to do this. Without it, any bet would simply be a 50:50 wager but adding the 1 in 37 chance green 0 ensures this is not the case.
In other games, the house edge is less obvious such as in slots but the way the game is programmed ensures that it is present. By law, such games must be regulated and therefore the claimed RTP will be genuine and can be trusted to offer a fair gambling experience.
Is there anyway of overcoming the house edge at online casinos?
Technically speaking no but the range of promotions handed out by the online casinos can in the short term give you an advantage, especially casino welcome bonuses.
In some instances offers are available without you requiring to stake any of your own money and in these no lose cases, it’s only the player who can benefit. In most instances, promotional money handed to players will need to be spent several times over before it can be withdrawn.
If a 100% deposit bonus is given to a player for instance, this puts the house at a huge disadvantage. Ensuring that players must wager the bonus funds 20/30/40 times over though helps pull them closer to level terms.