House Edge
If you have ever played a casino game for real money you will have encountered what is known as the house edge, a percentage that dictates how much money the casino expects to profit off of each casino game. The house edge cannot be seen however is an important part of how casinos make their money from players. The rules of each casino game set out what the player and dealer can do during play and using these pre-defined decisions and some mathematical formulas, the casinos are then able to determine their expected return on the game. This is how casinos are able to profit so much money over time since they are mathematically guaranteed a relatively fixed return from each game they offer. For simplicities sake let’s take a look at a quick example to get a better understanding of how the house edge works in play.
The best game to demonstrate the effect of the house edge is Blackjack since this is one of the only games in the casino where the way you play can change the house edge percentage. In a normal Blackjack game with a player who does not use proper strategy, the house edge floats somewhere around 2.5% in favour of the casino. What this means is that over an infinite number of hands the casino expects to win 2.5% of the money you risk betting at the table.
For example if you were betting $100 per hand at 60 hands per hour for 2 hours, we would know that you bet a total of $12,000 (multiplied by 2.5%) and that the casino would expect to have won approximately $300 of your bets. Now say you applied basic strategy for Blackjack which then reduced the house edge to 0.5%, with the same betting limits and timeframe the casino would only expect to have won $60 from your bets due to the reduced house advantage.
As you can see from the example above, the house edge is intertwined with casino odds and strategy since the way you play can have an adverse effect the level of the house edge. It’s also important to understand the difference between a variable house edge and a fixed house edge. The only two games in any casino that offer the player a variable house edge are Blackjack (using strategy) and Baccarat using card counting. The reason that these are the only two games that offer a variable house edge is because the player is offered a series of decisions in the game and has the chance to use those decisions to enable themselves to attain the best odds against the house. Contrary to popular belief, other games such as Roulette and Slots cannot be swayed with strategy or betting systems since there is little the player can do other than bet in pre-determined spots, each of which already has a calculated and accurate house edge percentage.
It’s also important to understand that the house edge is something which is calculated over billions of hands in each game and does not necessarily determine what will happen in the short run. It’s very possible to sit at a high house edge game and win loads of money in a few hours of play. The point of the house edge is that it is something that always exists in the long run for the casino and as long as their are hands continually being played, they know that they will be making their bottom line through the average of players betting.
Casino Odds – House Edge By Game
Now that we have a basic understanding of how the house edge works in a casino, we are going to take a look at a number of popular casino games so you can get an idea of how the house edge varies according to the different bets you make. Obviously since all casino games are different, the house edge varies greatly from one game to another so knowing the percentages by game variations is a good idea if you are a player looking to always play the lowest edge games and place the lowest edge bets against the house.
Blackjack – The house edge in Blackjack is largely dependant on the player and the rules of the game since there are many variations available in casinos. Generally speaking, a player who always plays with perfect basic strategy can bring the house edge as low as 0.5%, while a new or uninformed player could experience a house edge as high as 5% depending on how they played. The other major factor in Blackjack house edge is the rules which can be altered in some variations such as Spanish 21 or Double Exposure Blackjack. Rule changes can affect the house edge in both positive and negative ways for both the player and casino and these variations are generally quite small with a +/- 0.5% – 1% change in either direction.
Roulette – The game of casino Roulette offers the player a number of different bets that can be made each spin of the wheel. Each of these bets carries different odds of winning which directly affect how the house edge is determined for the casino. Although the probability of winning different bets in Roulette will vary, the overall house edge for the game is 5.26% but it’s important to note that this is an averaged edge and the chances of hitting different bets varies quite a bit. For example while a straight red or black bet has a 47.37% chance of winning a single number bet only wins 2.63% of the time.
Baccarat – As one of the most popular high roller casino games, Baccarat offers a relatively low house edge on most of the bets on the table. There are three main bets in Baccarat being a bet on the player, a bet on the banker or a bet on a tie. The outcome is determined once the cards are dealt according to rules and scoring for Baccarat games (more in Baccarat section). The house edge in Baccarat is 1.24% for the player bet, 1.06% for the banker bet (at 5% commission) and lastly 14.36% for the tie bet which is obviously the hardest bet to win in the game.