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What is House Edge and How to Calculate It?

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, everything you need to know about the house edge and the house edge of each casino game.

What is House Edge?

All casino games have an advantage that favors the casino, this is called House Edge or Casino Advantage. It should be noted that this house edge is not set by the casino.

House Edge is the mathematical advantage over the player in a given game to ensure that the casino makes a profit. It is expressed as the percentage of the player’s wager that the casino keeps as their profit over the long run.

The house edge tells you:

  • How much the casino will win on average or how much a game pays out on average.
  • Which casino games have the best returns.

Typically, games with a high house edge have lower odds of winning and games with a low house edge have better odds of winning and are more favorable to the players. Knowing the house edge will help you make better decisions on which games to play to increase your chances of winning. The fact remains that no matter which game you bet on, you can not beat the house edge.

✅ 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 10% is the house edge. Typically, you have a better chance of winning at games with higher payout rates.

✅ What is RNG?

RNG stands for Random Number Generator. Online casinos ensure that games are fair by using RNG to determine the outcome of games of chance such as slots, blackjack, and roulette.

As the name implies, RNG is a computer program that generates random numbers and sequences to determine the outcome of casino games, thereby creating fair results for players. All reputable online casinos use RNG to ensure that players get a genuine casino experience.

✅ Types of RNG

Generally, there are two types of RNG, namely:

  • True RNG
  • Pseudo RNG

True RNG: A true RNG uses unpredictable physical variables such as radioactive decay of isotope or airwave static to generate random numbers. These physical variables possess a completely random behavior called pure randomness.

Pseudo RNG: PRNG uses a predictable algorithm to generate random numbers. The outcome is not truly random like True RNG, hence the name Pseudo RNG. PRNG is not as secure as TRNG.

✅ How Do Casinos Use RNG?

Both land-based and online casinos use RNG which is designed by licensed and reputable developers such as Microgaming, Playtech, and NetEnt. They ensure that results are random and players have a fun gambling experience.

Independent companies, such as eCOGRA (eCommerce Online Gaming Regulation and Assurance) and TST (Technical Systems Testing), conduct tests and evaluations on the RNG used by online casinos. You can check an online casino for the seal of approval by these companies and several other reliable agencies to ensure that the online casino is legit and fair.

✅ Online Casino Games that Use RNG

  • Roulette: RNG is used in roulette to simulate the draw of a wheel and determines where the ball will stop.
  • Blackjack: RNG is used in blackjack to simulate a dealer dealing out the cards and ensures that you do not see the same card twice.
  • Slots: All slot machine games use RNG to determine the outcome of each spin and reel’s position.
  • Virtual Sports: RNG generates the outcome of a match in virtual sports.
  • Keno: RNG is used in keno to draw random numbers in one game.
  • Video Poker: RNG determines the outcome of video poker games by simulating a perfectly shuffled deck of cards, ensuring that every hand dealt is random.

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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 following casino games so you do not have to go through the stress of doing it from scratch.

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 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.

Our Recommendations

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.

Play Slots with High RTP

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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.

free blackjack sites

Credit: El Royale Casino


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. Make your research on them and choose the best one based on your experience and the setting of the baccarat.


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 is a dice game with a house edge of 1.41%. 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.

Our Recommendations

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 for free.

Casino Games with a Low House Edge

As earlier said, games with a low house edge are more favorable to players and have better chances of winning. We highly recommend that you choose to play games with a low edge to ensure that you walk away with a reasonable profit. Below is a list of casino games with a low house edge.


Baccarat is a fun and easy-to-learn table game with a low house edge. We highly recommend that players bet with the banker and avoid the tie bet as much as possible. Use the best baccarat Strategies to increase your chances of winning.

Video Poker

Video poker is another entertaining game with a low house edge. There are several variations of video poker with the best odds.

video poker with the best odds

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Blackjack has one of the most favorable odds. Incorporating easy blackjack strategies will improve your chances of walking away with a profit.


The rules of craps are pretty easy. With constant practice, you would find yourself becoming better at the game. We recommend using craps strategies and tips to increase your chances of winning the game.

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.