House Edge 

While it’s easy to think casino games are just a case of ‘random luck’, it’s important to remember that, no matter how long of a lucky-streak you are on, there IS a house edge involved, and this house edge is what allows the casinos to make money. Whether you are playing a hand on the Blackjack tables, or spinning away on the slots, there’s always a house edge – without it, casinos wouldn’t be in business!

What is the House Edge?

In short, it’s the amount (percentage) that a casino can expect to make from a certain game, over a long period of time. Or, in other words, it’s the amount of money the casino will take from players, from a game. Each casino game features a different house edge, and some – like Blackjack and Roulette – are set mathematically, while other games, such as video slots, use a pre-built house edge system that determines roughly how much profit a machine will take over the course of a year, or longer.

It can seem a little confusing to get your head around at first, as naturally, the casino won’t win every bet placed, and indeed will often incur losses on specific days, even weeks. But what’s important to remember, is that all casino games are designed to give a house edge, meaning the casinos WILL make money, provided they offer the game over a long period of time.

House Edge: A Specific Example

To show exactly how the house edge works, let’s look at a game of European Roulette. On a European Roulette wheel, there are 37 numbers; 1-36, and zero. Now, if you were to receive a payout of 36/1, it would make sense that – over time – if you placed a £1 bet on the same number (and we’re talking millions of spins), you’d breakeven – that is to say, there’s no ‘edge’ – probability dictates you’ll break-even over the course of the long run. No wins, no losses.

Now in practice, you could theoretically go without seeing your number drop for hundreds of spins –  just like your number could drop 10 times in a row – but over a long period of time, you will always break even. However, if this were the case, casinos wouldn’t make money – and that’s why European Roulette only pays out 35/1 – not the true odds of 36/1. This means that over time the casino will make £1 for every £37 wagered, meaning that if you were to repeat the same experiment as we talked about above, in the long-run you’d expect to make a loss of £1, per £37 staked instead of breaking even.

While neither the casino nor the player would ever see scenarios as perfect as above, over time, it would average out to around that amount, meaning that – no matter what the player does – the casino will always win.

Element of Risk / Variance: The Higher the House Edge, the Higher the Variance

As different casino games have different house edges, there are theoretical returns a player can expect to see. Again, this is over a long period of time, and is by no means relevant to short-term gaming, but what can play a factor, is the volatility of a game. In short: the higher the house edge, the higher the variance.

This means that if you play a casino game with a low house edge, like Blackjack, Craps or Baccarat, you can expect only small losses over time, and more regular wins. The downside, however, is that wins typically aren’t large, so while you won’t be losing much, you won’t be winning much, either. Now a casino game with a high house edge, like certain video slots, means it’s harder to win – and playing long-term, you’ll lose more – but the short-term wins can be much higher, which is exactly why slot games can pay out 1,000 times the player’s stake.

House Edges in Games

While it’s impractical to talk about the house edge of all games, below you’ll see a summary of some common casino games, and their relevant house edges:

Casino Table Games

Generally speaking, card games feature the lowest house edge, and Blackjack and Baccarat are two games that – when played using optimum strategy – can prove profitable to players for a while. In Blackjack, for example, the house edge can be reduced to less than 1% with Baccarat featuring around the same percentage at 1.24%. European Roulette, on the other hand, features a 2.7% house edge with American Roulette boasting a sizeable 5.26% house edge! Clearly, it’s more profitable to play Baccarat and Blackjack if you were to play over the long-run, but if you were hoping to make a large profit, in a short space of time, Roulette would be the way to go.

Note: The house edge (particularly in Roulette) can change, dependant on the bet type you place, so while the figures given above are respective of the game in general, the way you play, and the way you bet, can impact these odds both positively and negatively.

Video Slots

The house edge within video slots is a little more complex with the machines using a RTP (Return to Player) percentage to determine how profitable a slot will be for the casino, over a long period of time. In a simple example, if you were to play a Video Slot with a RTP of 97%, and staked £100 (100, £1 spins) through the machine, your theoretical win would be £97, while the casino would expect to keep £3 in profit. Of course, this is by no means an accurate representation of realistic returns, as an RTP is calculated over tens of thousands of spins; far longer than the average player will ever play a machine for.

However, by looking at the RTP of a slot, you can gauge an idea of whether it’s likely to be high, medium, or low variance. Let’s look at what these terms mean below:

High Variance

A high variance Video Slot is designed to be hard to win on. Players can often play long sessions without hitting a single big win, or a bonus feature, and they are ideal for those in search of a ‘hard-core’ gaming experience. The big bonus of playing a high variance Video Slot, is that when they do pay, they can often pay very handsomely. Examples of high variance Video Slots include Net Entertainment’s Dead or Alive, Novomatic’s Captain Venture and NextGen’s 300 Shields.

Medium Variance

A medium variance slot is simply a slightly less volatile version of a high variance game with payouts occurring more frequently, albeit generally smaller than the higher variance type. Popular medium variance slot games include Net Entertainment’s Dazzle Me, Williams Interactive Nemo’s Voyage, and Microgaming’s Alaxe in Zombieland.

Low Variance

A low variance slot is one that’s designed to provide players with constant, regular wins with long losing periods rare; the caveat of doing so, means the wins paid out are generally fairly small, with big wins over 100X rare. Popular low variance slots include Play N’ Go’s Hugo, Net Entertainment’s Blood Suckers, and Microgaming’s Skullduggery. One very important thing to remember is that the house rules directly impact the house edge. One Blackjack table for example, can feature vastly different odds (house edge) from another, if the house rules differ.

Small changes in the game rules can impact massively, in favour of the player or the house, and it’s important you are aware of these rule-changes before you begin playing a game, so that you are fully aware of the actual odds of the game. To determine the house edge of a game, you can either find the information directly in the game’s ‘Rules’, or ‘Information’ section, or, if the game doesn’t display it, you can usually find out with a simple Google search.

Interestingly, players in the UK will always be able to view a game’s house edge, as the UK Gambling Commission states any casino that wishes to offer real-money gaming to UK players must display the house edge/RTP of the game for players.

Can You Beat the House Edge?

Due to the mathematical formula behind any casino or slot game, it’s impossible to ever beat the casino’s house edge. It’s the way they ensure a consistent profit, and while you may see punters proclaiming to have found a way to ‘beat the system’, the reality is, you cannot beat the house edge. There are occasions where it’s possible to reduce it temporarily (such as in Blackjack, by card-counting), but at the end of the day, if you play a casino game, know that – while you can win in the short-run – the game is designed to make a profit, and will beat you eventually if you continue playing. The longer you spend playing a game, the more the house edge factors into the play, so the best advice you can remember, is to walk away from a game once you have a sizeable win.

Real Casinos Versus Online Casinos

Many players believe online casinos have better/worse odds than land-based casinos, and while there certainly are situations where this is the case, it’s important to realise it isn’t because the games are designed to take more from players. If you play European Roulette in a land-based casino, and play the same game (with the same rules) in an online casino, your odds of winning and losing will remain exactly the same, no matter what anyone says.

The time when odds do change is when variations of a game are offered online, so in our European Roulette example, if an online casino offered an optional side bet – say a progressive jackpot – and you decided to play it, the house edge would increase on the game. Mathematically speaking, however, the odds on games do not change between land-based casino play and online play.

Plus, when it comes to Video Slot games, online, you will often find the RTP (Return to Player) percentage is higher than the same game in a land-based casino, bookmaker, or bingo hall. The reason for this is that these real-life venues have overheads, building costs, staff fees, etc. – online, many of these fees are done away with, which means the gaming operators can afford their games’ profits to be slightly smaller.

In Sum: They Don't Call it the 'House Edge' for Nothing

While it’s important to understand the house edge, and realise how it can affect the gameplay of your casino experience, it’s generally not something you should get too caught up with. Remember, all casino games’ house edge is speculated over long periods of time, potentially hundreds of thousands, or even millions of plays.

You could theoretically win at a game continually for months, while losing for the same period of time, and while it’s unlikely, it’s mathematically possible – just remember, the longer you play, the more chance the casino has of beating you and dwindling your bankroll. So, enjoy yourself, play a variety of casino games, but don’t get too caught up in the mathematics of things – especially if you are playing for short-periods of time.

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