Answer: What is the House Edge?

Answer: What is the House Edge? Casinos don't cheat their players at all, but most bets have built-in profits.

By Brett C | Oct 19, 2010

House Edge, Roulette, Blackjack

Elementary School

Lessons: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11

In This Lesson

House Advantage Different House Edges Defy the House Edge

For many players the concept of a house edge is misunderstood. The house edge is simply a percentage of every bet placed that the casino expects to retain for itself. These house edge figures are calculated to ensure that online casinos and regular casinos are able to keep their doors open for business. The house edge in most cases hovers below 6% (notable exceptions include tie bets in baccarat at 14.36%, Big Six $5 bets 22.22%, Big Six Joker/Logo 26.07%, Keno 24% - 29% and several others). What is clear from all games at casinos is that the higher the risk, the greater the reward. Indeed many players have been crowned multi-millionaires by wagering on games where the odds of winning have been heavily stacked against them.

Casinos are businesses must turn a profit

When questioned about the concept of a house edge, many casino operators rightly point to the fact that casinos are businesses. They are there to turn a profit for investors and shareholders. That they are a vital part of the economy in terms of job creation and business activity cannot be discounted. The house edge or casino advantage is defined as the average money lost to the initial bet placed. In video poker games and blackjack games there isn't a built-in profit, but in other games there is. Let's take this concept further because clarification is certainly needed here.

The house edge is not only the average of what you lose compared to what you bet originally. It is in fact the difference between the true odds (what should ideally be paid to you) and what the casino gives you. There are several games where the house edge is zero. Many casinos punt these gaming options as attractive alternatives for players. But these games pay out handsomely 100% of the time only if perfect playing technique is implemented over the long term - as determined by audited stats results of random number generators.

Different games provide different house edges

The house edge concept can be explained beautifully by the game of roulette. Roulette games have 37 numbers on single zero tables and 38 numbers on 00 tables. A simple calculation puts the odds at 1 in 37 for the single 0 table 1 in 38 for 00 tables. But here's the clincher: the casino doesn't pay out those odds if you win; it only pays out 35 to 1 on both games. Thus the casino advantage is 5.26% in 00 roulette and 2.70% in single zero roulette. It works similarly with craps dice as there are 12 numbers on a pair of dice and different payout odds.

Video poker and blackjack defy the house edge

Blackjack is entirely different. The reasoning behind the odds calculations here is that the odds are constantly changing. If a card is dealt from the shoe - and it's randomly dealt - the odds of the player or the house gaining advantage see-saw all the time. With each card dealt, the remaining cards provide new odds. That's why card counters in blackjack are able to win lots of money. Video poker too paints a similar picture.

Elementary School