What Is The House Edge? The Casino Advantage Explained

by
Joe A.
10th January, 2021

When you play a game in the casino, the casino has a mathematical advantage over the player called the house edge or house advantage. This is what keeps the casino alive and running. If you’d have equal odds at every game, or even a slight advantage as player, then casinos wouldn’t exist in the first place as nobody with a sane economical mind would open one! Because of the house advantage for the casino, you are more likely to go home having lost some cash, than you are likely to return home with some nice earnings in your pocket.

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Calculation

The house edge is calculation of your probability of winning coupled with the exact pay-outs. Casinos can thus further increase the house advantage by either making it more difficult for players to win, or by lowering payouts. Probability is just a ratio that describes how likely you are to win.

Expressed in probability formats, the probability of winning a bet is often written down like this: 37 to 1. The first number is the number of possible ways you can lose the bet. The second number is the number of possible ways that you can win the bet. When you bet money on a single number in American roulette as an example, you have 37 ways to lose and only one way to win. Your odds of winning are 37 to 1.

But the odds have also been used to indicate what the pay-out is for a bet. A single number bet in roulette pays out 35 to 1. That is the ratio of winning to losing. If you bet 1 euro on a single number in roulette and win, you will be paid 35 euro in winnings. Now you might think: “If the odds are 37 to 1, why don’t I get paid 37 to 1?”

That’s because the casino has to make a profit somewhere! The difference between the pay-outs and the odds of winning is the house edge. This advantage is usually described as the percentage of each bet that you expect to lose on average in the long run.

house edge

Roulette is one of the games where the house has an in-built advantage.

An example

Let’s put this into practice as we again look at the game of roulette. You will play 38 times in total. At each spin of the wheel, the ball lands on each one of 38 possible results, meaning that every single number on the roulette table will have a hit once. You will each time bet on the same single number.

Let’s say you play with a stake of 100 euro each round. What would the result be after 38 turns? You will find yourself losing 37 times and winning once. In total you have lost 3,700 euro, and the single win will get you 3,500 euro. In total you will have lost 200 euro over 38 turns. The average loss per turn is 5.26 euros. That’s 5.26% of any bet, and that’s the house edge when betting on a single number in roulette.

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The house edge is usually easier to calculate for casino games than it is for other forms of gambling. But most of the times, regardless of what game you are playing, you have to overcome a house edge.

Even in poker when you compete against other players you still have to deal with a mathematical disadvantage. That’s because, for example, the house takes 5% of every cash game pot or charges a “fee” for organizing a tournament. This is how the casino makes money from poker.

house edge blackjack

A game of blackjack in an online casino. ©Screenshot

Winning

To win at any casino game, you would have to overcome the house edge if you want to make money in the long run. To be good enough at betting on sports or poker and making money in the long run, you have to be able to win often enough to take back that extra money you paid.

In sports betting, this means that you have to win more than 53% of the bets in the long run. In poker it will not only depend on your skills, but also on how many other players you face at the table. Poker and sports betting are good examples where you can get an edge as other factors like knowledge, skill and even tactics are needed besides luck.

It’s also possible to beat the house edge in games like blackjack and video poker, but it requires a perfect strategy. It also requires complicated tactics such as card counting which you should master fully before even attempting to beat the house edge.

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The long run

Of course, you can still win big money at games where the online casino has a built-in advantage which is impossible to overcome in the long run, such as roulette or video slots. After all, for every 10 losers there will be one lucky player or so. But on a long run you should definitely avoid some games and focus on the few forms of gambling where it is possible to overcome the house edge.

For a list of recommended online casinos where you can giving it all a try, check our page full of independently reviewed casinos which are tailormade for high stakes gambling.

Good luck trying to beat the casino and have fun playing. Just don’t forget to always play responsibly.

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