Casino House Edge Explained

  1. Casino House Edge Explained Full
  2. Casino House Edge Explained Youtube
  3. Casino House Edge Explained Game

In every casino game, from Blackjack and Craps to Slots and Keno, there is a built-in advantage for the “house,” the entity that sets the rules and controls play. This advantage is commonly referred to as the “house edge” or “margin,” and sometimes as “vigorish,” “vig,” or “juice.” When the house edge is high, the player has less chance of winning. When the margin is low, players have better odds.

The house edge/payout percentage is the same regardless of what bet you make at the game. This means that for every $100 wagered at roulette, the theoretical house win is $2.70. While a casino would never make exactly $2.70 for every $100 wagered, over millions of spins, it would average out at about that figure. In order to make a profit, the house – or casino to you and me – retains an estimated percentage from every bet placed across the different games. This percentage of what the casino should expect to keep is the house edge (sometimes called the house advantage).

Because the house edge is a function of the “House Rules” by which the games are played, it varies from location to location. Native American casinos generally set up the rules so that they enjoy a relatively high edge on most games. Downtown Las Vegas casinos are noted for having a somewhat lower house edge than their counterparts located on the Strip. And online casinos can afford to offer the lowest margin of all, owing to the relative lack of staff salaries, benefits, mortgages, utilities, and other overheads that need to be covered out of revenues.

Casino

Statistically, the house edge for any game or group of games can be defined as “the ratio of the average loss to the initial bet.” Some prefer to think of it somewhat differently, as “the ratio of all money lost to total money wagered.” Either way, the resulting numbers are quite similar and can be used to compare not only one game to another but also one set of rules with another when analysing a single game.

Roulette provides the simplest example of how the house edge works as well as how changes in rules impact the likelihood of a player winning. The European Roulette Wheel contains 36 numbers and a zero. On any spin, the payout for correctly choosing the winning number is 35-to-1.

Now, if a player were to wager one chip on every number on the Roulette table, including zero, he/she would put 37 chips in play. No matter what number comes up, only one of them can win. That means the player must lose 36 of the chips, retain one of them (the winning one), and receive 35 chips for choosing correctly, which amounts to a net loss of one chip. The average loss (total loss) is 1, the initial bet (total wager) was 37, so the house edge is 1/37 = 2.70%. No matter how many times this betting pattern is repeated the result will always be the same—an expected loss of 2.7% built in to the game. It is the house’s advantage.

However, if a second zero is introduced to the Roulette wheel, as is the case with American Roulette, everything changes. There are 38 numbers, of which only one will not be swept away with the losers. The win is still worth only 35 chips, so the net loss will now be 2 out of 38 chips, and the house advantage has gone up to 2/38 = 5.26%.

Clearly, if this is the only difference between the two games, playing European Roulette is preferable to playing the American version because the house edge is so much lower. Close study of other casino games will show that certain rule changes greatly favour the house, such as multiple decks used in Blackjack, while others are beneficial to the player, including single-deck Blackjack, the ability to double down after a split, and so on.

ExplainedCasino

The game with the lowest house edge is Craps. When played with such favourable rules as 100X odds on the pass line, the edge goes as low as 0.021%. The game with the highest advantage for the house is Keno, with a margin of anywhere from 25% to 29%. In between, are all the popular table games, such as Blackjack at 0.28% (Vegas rules), Baccarat at 1.06% (Banker) to 1.24% (Player), Pai Gow Poker at 1.48%, and Caribbean Stud at 5.22%.

Edge

By comparison, slot machines can feature a house edge of anywhere from 2% to 15%, while Video Poker, much maligned by skeptics, has an average house edge of just 0.46% when playing Jacks or Better with a “full pay table.” More exotic games, as might be expected, tend to have even higher advantages for the house, including Let It Ride (3.51%), Casino War (2.88%~18.65%), Big Six (11%~24%), and Sic Bo (2.78%~33.3%), among others.

posted in Casino Tutorial • No Comments

The House Edge is a term used to describe the mathematical advantage that the gambling game, and therefore the commercial gambling venue, has over you as you play over time. This advantage results in an assured percentage return to the venue over time, and for you an assured percentage loss of what you bet.

It’s important that people don’t think that they can win, because you can’t win in gambling. You can win for a little while but you can’t win in the long run.” – Michael Piggot, spokesman for Tabcorp, one of Australia’s largest betting agencies, on the National 9 News, September 2005.

The House Edge assists the gambling provider as a commercial business to cover its costs of providing the game, paying for the staff, maintaining the casino or club etc. It also helps to turn the business a profit. Any profit the business makes from gambling comes from the money the gamblers pay into the game, whether it’s a poker machine, Keno, Blackjack or other game.

For example the House Edge built into a poker machine in Tasmania means that on average around 10% of every bet you make, that is, every time you press the button, goes back to the venue. In Tasmania the law actually sets the amount that the venue can keep (its House Edge) as 15%, but the venues, through the suppliers of poker machines, Network Gaming, have opted for around 10%.

How does it work? In poker machines there is a mechanism called a Random Number Generator. It’s actually a computer and it’s programmed to select the combinations of symbols – at random – when you press the button. On a poker machine with five reels and thirty-five possible stops on each reel there are 52,521,875 possible stop combinations. The Random Number Generator is programmed so that there will be more losses (losing combinations of symbols) than wins.

An easy way to think about it is with a roulette wheel. On a single zero roulette wheel there are 36 numbers plus the green zero. When the wheel is spinning the ball can stop on any one of the 36 numbers or the zero: 37 possible stops. Therefore the mathematical odds of you choosing one of those possible stops is 1 in 37. But… the house pay outs are set at 35 to 1. So over time, the house will never lose. They have a 2.7% house edge.

Casino House Edge Explained Full

The house edge is in every form of commercial gambling and means that the more you play over time, the more you will lose.

Casino House Edge Explained Youtube

You may get lucky in the short term and be ahead but if you keep playing, eventually you will lose. See also Gamblers Fallacy.

Further information:

Ever wondered how much you really spend on gambling over a year? This calculator can give you a true picture of gambling spending.

Casino House Edge Explained Game

Want to find out more about luck and the house edge?