Casino House Edge Explained

Knowing the house edge of casino games is vital to deciding what games to play, and understanding how it works is central to any statistical strategy. If you're new to casino betting, or you've decided to take a more mathematical approach, the chances are you've encountered discussions about the 'house edge' or 'house advantage'. The house edge is the built-in advantage that casinos have on most of the games played on the gaming floor. Casinos are in the business of making money: they do this by ensuring most of the games played on the floor are weighted in the casino's favour.For example, in American roulette, the house edge is 5.26%. House Edge Definition The house edge is another concept which deserves mentioning when it comes to blackjack odds. It is basically the built-in advantage all casinos have over the players and it is the reason why they are always guaranteed a profit over long periods of time. Look at the game of Roulette. You will see that the house edge is 5.26% for the double zero game. This is how we figure the edge. In the game, there are 36 numbers plus the 0 and 00. The odds of you winning is one in 38 or 37 to 1. If you win the casino pays you 35 for your dollar bet.

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The house edge is the most important number in gambling, yet the majority of gamblers don’t understand how it rules everything about gambling, and they don’t know how to use it to make smart betting decisions.

If you fall into this category, the good news is that you’re going to learn everything you need to know on this page.

Another reason many gamblers don’t know much about the house edge is because they don’t like math, usually because they’ve never had anyone show them how to use it in an easy to understand way.

If you fall in this category, the news is even better. One of my best skills is breaking down math situations in a way that’s easy to understand. I’m going to detail the house edge in a way that a third grader can understand it.

The Basics of the House Edge

The house edge is the statistical percentage of the advantage the casino or house has in any situation. Each gambling game and activity has a built-in house edge, which is how the casinos, sportsbooks, racetracks, and poker rooms make a profit.

Some games and activities have a set house edge, and some have an edge that varies based on past events and player strategy.

Here’s an example.

What this means in real-world results is that the casino is going to keep, or win, 1.06% of all the money you bet on the banker hand in baccarat. If you make bets totaling $100, the casino is going to keep $1.06 of it.

Keep in mind that this number looks at the long-term results. In any given session, you may walk away with a big profit, a big loss, or anywhere in between. But the longer you play, the closer your lifetime results will be to equaling that 1.06% loss to the casino.

You can determine the amount by multiplying the house edge percentage times the total amount of your wagers. 1.06% converts to .0106 as a decimal. You have to convert the percentage to a decimal by moving the decimal in the percentage two places to the left.

.0106 x $100 = $1.06

If you’ve ever played baccarat, you know that when you bet $100 at one time, you either win $100 minus the commission or lose $100. You also probably know that if you make 20 bets of $5 each, you’re not going to end up with exactly $98.94.

This doesn’t change the fact that the house edge is 1.06% or the fact that the casino makes 1.06% on all the baccarat banker bets. The casino works in volume while individual bettors work with their individual bets. Some players win sometimes, but overall, the casino makes the house edge.

Here’s another example.

Blackjack has a house edge that varies based on the specific rules and the strategy you use. The house edge in blackjack can be as low as .25% and as high as 2% or more. Card counters can even turn the house edge in their favor.

The most important thing you need to understand is that every game has a house edge, and you need to know what the edge is for the games you play.

Here’s a list of games with the house edge.

Some other gambling activities make money for the casinos in a different way. Poker makes money by charging a rake on each hand. Horse and dog tracks make money by keeping a percentage of the total betting pool. Sportsbooks make money by charging vig when you make a bet.

These three activities all offer the best gamblers a chance to make money if they can play or make decisions better than most other gamblers.

Simple Ways to Use the House Edge in Gambling

The best way to use the house edge is to make bets with the lowest edge. If you’re looking for a bet with a low house edge that doesn’t require the use of strategy or playing decisions, the banker bet in baccarat is usually your best option.

• If you’re willing to learn more about the rules of a game and learn the best strategy, blackjack and video poker are good options.
• If you’re the type of player who’s willing to work hard to have a chance to win, poker, sports betting, and race track betting are all good options.

The pass line bet backed with the full available odds is a good betting combination. The house edge of 1.41% on the pass line is higher than the edge on the baccarat banker hand, but when you back at full odds, you’re making larger bets with a 0% house edge.

Once you understand what the house edge is and how to use it, you’re in better shape than most gamblers. You can use your knowledge to make smarter playing decisions, which leads to lower losses over time.

You can also use the house edge to determine roughly how much it costs you to play the games you prefer. You can determine the expected amount you’re going to lose by using a simple formula.

Here’s an example.

You play roulette on a single-zero wheel and make 30 bets per hour of $20 each. This is a total of $600 wagered per hour.

Remember that the expected loss of $16.20 per hour is a long-term average. In any particular hour, you can lose more or less. Some hours, you’re even going to win. But the longer you play, the closer your actual results are going to be in line with the expected results.

Improving Your Gambling Skills Using the House Edge

When you play games like baccarat, roulette, and craps, you can’t do anything to change the house edge. The long-term results are going to be a loss in line with the house edge. But this doesn’t mean you can’t use the house edge to improve your gambling skills and results elsewhere.

Here are some specific ways to improve your results now that you know about the house edge.

Blackjack

The first step is to learn which blackjack rules offer the lowest house edge. Then you find games that use the best combinations of these rules. Now find a strategy card or chart for these games, and always use the best blackjack strategy.

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When you do these three things, you can usually play with a house edge of less than .5%. Sometimes, you can find games with an edge as low as .25%.

If you want to take this to the next level, learn how to count cards. A good card counter can turn the tables on the casino and play with an edge against the house.

Video Poker

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The video poker house edge is based on the pay table on the machine and on how well you use the proper strategy. Learn about the best machines and the best pay tables. Then find the proper strategy chart for the machine. You can keep the house edge under .5% by following this advice.

Poker

Poker offers an opportunity to win more than you lose. The rake is a small percentage of each pot, so you can win by outperforming most of your opponents. This isn’t especially easy, but with enough practice and knowledge about all the different poker strategies, you can do it.

Sports Betting

Sports betting profits are in the form of vig charged by the books. If you learn how to handicap games and shop for good lines, you can overcome the vig and show a long-term profit. Just like poker, this isn’t easy, but it can be done.

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Conclusion

Understanding and using the house edge in gambling isn’t hard. All you have to understand is how the edge cuts into your profits and how to reduce the edge as much as possible.

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By using this information on the house edge, you can make your bankroll last longer, and you can start looking for ways to actually become a winning gambler.