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Whether you’re a seasoned gambler or a beginner, you have heard the term ‘house edge’ more than a million times. It is essential to understand what this term means so that you can make better and more informed decisions.
Reputable casinos do not cheat their players, instead, they make their profit from a built-in advantage called the house edge. House edge is the advantage the casino has over the player in a particular game.
In this article, we’ll explain, in detail, how to calculate house edge and the house edge of each casino game.
- House edge is an advantage that the casino has over a player in a particular game.
- House edge varies between different casino games.
- Casino games with lower house edges such as blackjack, baccarat and video poker are more profitable to players.
- RTP is the opposite of house edge.
What Is House Edge?
The house edge represents a mathematical advantage casinos have over players. In a nutshell, it’s a guaranteed return to the operator. Every casino game has this built-in advantage, which is expressed as a percentage of bets the online casino retains as profit. This is not considered cheating, and online casinos are not rigged. Every online casino publishes the house odds for every game in their lobby.
We can illustrate the house edge by taking the example of roulette. The European roulette variant has a 2% house edge, and no matter your skill level and luck, for every $100 wagered during a gaming session, that casino will keep $2. However, this is a very straightforward example.
The house edge represents a probability, meaning it reveals how often an outcome will occur if repeated a specific number of times. Basically, the longer you gamble, the closer you will come to the proclaimed house edge. From a player’s perspective, the house edge identifies casino games with the winning margin.
| Hands Per Hour Table | ||
|---|---|---|
| Games | Hands per Hour | House Edge |
| Blackjack | 70 | 0.5% |
| American Roulette | 38 | 5.26% |
| Baccarat | 72 | 1.2% |
| Craps | 48 | 1.58% |
| 3 Way Action | 70 | 2.2% |
| Let It Ride | 52 | 2.4% |
| Big Six | 10 | 15.53% |
| Pai Gow | 30 | 1.65% |
| Caribbean Stud Poker | 50 | 1.46% |
| Sic Bo | 75 | 2.20% |
What Is Payout Rate?
Payout rate is also referred to as the Return to Player (RTP). It is the ratio or percentage that tells the player how often they can win at a particular game.
For example, if an online slot pays out an RTP of 95%, then you can expect to win back $95 out of every $100 you wagered. However, this doesn’t apply to every Individual gaming session, but to millions of wagers. Typically, you have a better chance of winning at games with higher payout rates.
The RTP is paired with volatility, which shows how much a certain slot pays out for each spin. Low volatility slots hit more often, but offer smaller payouts. On the other hand high volatility slots pay out less frequently, but in higher amounts.
How to Calculate House Edge
Calculating the house edge from scratch is quite difficult. The formula for calculating the house edge is:
EV = (Win × P.Win) – (Loss × P. Loss)
Where EV stands for Expected Value and P stands for Probability.
Let’s take a look at the example below:
The house edge of American Roulette can be calculated as follows;
- American Roulette contains two zeros and 36 non-zeros; that is 18 red and 18 black.
- If a player bets $1 on red, the probability of them winning $1 is 18/38. However, the probability of them losing $1 is 20/38.
Using the above formula,
Expected Value = (1)(18/38) + (-1)(20/38)
=18/38 – 20/38
= -2/38 = -1/19
EV = -5.26%
Therefore, the house edge of American Roulette is 5.26%.
House Edge of Casino Games
Trying to calculate the house edge of each casino game could be nerve-wracking for you. So, let’s skip the boring math. In this section, we’ll give you the house edge of the popular casino games.
| Casino Game | House Edge |
|---|---|
| American Roulette | 5.26% |
| European Roulette | 2.7% |
| Baccarat | 1.06-13.46% |
| Blackjack | About 0.5% |
| Caribbean stud | 5.22% |
| Craps | 1.41% |
| Video Poker | 0.46% |
| Slots | 2-15% |
| Hold’em | 2.36% |
| Sic bo | 2.78-33.33% |
Slots
Slots are one of the most popular casino games with the lowest house edge. Slots have an RTP of 75% to 98%. Unlike every other casino game, slots do not require skill, it is purely a game of luck. We advise that you check out the online casino for more information on paylines and payout.
- Practice For Free: Practicing with free slot sites will help you understand how it works. We advise that you look through these recommendations and pick a site you prefer.
- Play Slots with Bonus Games: Play slots that offer you bonuses like free spins so you can win more money.
- Play Slots with High RTP: There are certain slot games with very high RTP like 98%, 99%, etc. We recommend that you play these slots at trustful casinos like 888 Casino for a chance to win bigger cash prizes.
Credit: Spin Casino
Blackjack
Blackjack is one of the most popular games in online casinos with a house edge of about 0.5%. There are different variants of baccarat and their house edges range from 0.5-4%, making it one of the casino games with a low house edge. You do not have to be an expert at blackjack before you can win big.
Our Recommendation
- Practice For Free: Like every other game, blackjack requires constant practice. You can practice for free with these free blackjack sites.
- Use Betting Systems: Incorporating easy blackjack strategies will improve your chances of walking away with a profit.
- Place Small Bets: Ration your budget and wager with small stakes.
Credit: El Royale Casino
Baccarat
There are three kinds of bets in the baccarat game.
- The Banker Bet with a house edge of 1.06%.
- The Player Bet with a house edge of 1.24%.
- The Tie Bet with a house edge of 14.36%.
Our Recommendations
- Bet with the Banker: Since the banker has the lowest house edge and better odds, we advise that you bet with the banker every time.
- Use Baccarat Strategies: There are several baccarat strategies you can use to increase your chances of winning. Do your research on them and choose the best one based on your experience and the setting of the baccarat.
Roulette
The house edge of roulette varies depending on the type of roulette bets you’re playing. For example, the house edge of American roulette is different from that of French roulette.
Our Recommendations
- Practice For Free: Practicing with free roulette sites will give you an insight into the game without risking your money.
- Play at a Reputable Casino: Choosing a reputable casino to play roulette is very important. Make sure that the site you’re playing is authorized by the government and gambling authorities.
Video Poker
Each type of video poker has different payout odds. There are different variations of video poker to choose from and their house edges vary. We suggest that you take your time to check out the payouts of each variant.
Our Recommendations
- Choose the Video Poker with the Highest Payout: Compare the paytables of the different variants of video poker and choose the one with the highest RTP.
- Practice For Free: You can get familiar with the rules and layout of the different video poker variants without risking a dime. Check out these free video poker sites.
Craps
Craps is a dice game with a house edge ranging from 0.42% to 4.76%, depending on the type of bet. It is one of the casino games with a player-friendly house edge. In this game, players bet on the outcomes of the roll of a pair of dice.
Here are some of the most popular bets in craps and their house edges.
| Bet | House Edge |
|---|---|
| Pass | 1.41% |
| Don’t Pass | 1.36% |
| Pass Odds | 0% |
| Don’t Pass Odds | 0% |
| Come | 1.41% |
| Don’t Come | 1.36% |
| Come odds | 0% |
| Don’t Come Odds | 0% |
| Buy Bets | 4.76% |
| Hardways | 11.1% or 9.09% |
| Big 6 and 8 | 9.09% |
- Stick to Bets with Low House Edge: Bets like Don’t Come, Pass Line, and Don’t Pass Line, have a lower house edge compared to other kinds of bets in craps.
- Practice For Free: There are free crap sites to practice crap without real money.
- Use Strategies: Using craps strategies and tips to increase your chances of winning the game.
Credit: Red Dog Casino
Final Thoughts – Why is Knowing the House Edge Important?
Knowing the house edge of a casino game before you begin playing is as important as knowing the rules of the game. It is essential for every player, both beginners and experienced, to understand the house edge of each casino game. This will help you decide what games to play and what to avoid.
Although there is absolutely no way you can avoid the house edge of a given game, it doesn’t mean that you can’t win at the said game. Knowing the house edge helps you to manage your bankroll and develop strategies to increase your chances of winning.
FAQ
Can You Beat the House Edge?
Unfortunately, there’s no way to beat the house edge. However, you can lower it by employing betting strategies such as Fibonacci, Paroli or Martingale, depending on which one fits your bankroll.
Do Online Casinos Have an House Edge?
The games offered by online casinos have a house edge as they have to make a profit. Odds and payout of bets are usually displayed on the screen.
Should I Play Games With High or Low House Edge?
If you are playing table games, search for titles with a low-house edge to reduce potential losses. For slots, aim for high RTP games to maximize chances of winning.
Which Casino Game Has the Lowest House Edge?
Blackjack is believed to have the lowest house edge of about 0.5%, making it one of the most profitable casino games.
Do Online Casinos Lose Money?
The overall balance sheet is typically positive for casino sites. The reason for saying the house always wins is because the odds are in the casino’s favor. However, this does not mean you cannot win real money playing casino games.
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