If you’ve played casino games for a while, you’ve probably heard of the term house edge. If not, then it’s a good time to pay attention, since understanding how casinos operate could be key to elevating your game to new levels. At the very least, it is an interesting concept for the curious gambler’s mind to learn, right? The casino here is the “house.” In a basic sense, “edge” is used to mean advantage. It means that every casino game is set up such that the house stands to make a profit in the long term. It matters not whether it’s roulette, the slot machine, blackjack, or craps.
For any game, players put up a stake against the house. If they lose the game, they lose their stake to the house. If they win, the house has to pay back their stake along with the profit. Nonetheless, did you know that the house will ultimately end up with a profit even when players win in the long-term? This is what makes casinos such an attractive investment for entrepreneurs in the entertainment sector. The house edge is how they make their money, so let’s see exactly how it works.
The Inner Workings of the House Edge
For a gamer to win at a casino game, they may need to have a bit of skill. Generally, though, most of these games are more reliant on chance or luck. The house, however, does not need the luck to make a profit. That’s because they have the house edge, which is like an inbuilt advantage in their favor whether gamers win or not. Roulette is a perfect example of the casino’s house edge at play.
American Roulette Example
| Bets | Payout | Probability |
| Odds | 1:1 | 46.37% |
| Even | 1:1 | 46.37% |
| Black | 1:1 | 46.37% |
| Red | 1:1 | 46.37% |
| 1 – 18 | 1:1 | 46.37% |
| 19 – 36 | 1:1 | 46.37% |
| 1 – 12 | 2:1 | 31.58% |
| 13 – 24 | 2:1 | 31.58% |
| 25 – 36 | 1:1 | 31.58% |
| Single Number | 35:1 | 2.63% |
| Combination of Two Numbers | 17:1 | 5.26% |
| Combination of Three Numbers | 11:1 | 7.89% |
| Combination of Four Numbers | 8:1 | 10.53% |
| Combination of Six Numbers | 5:1 | 15.79% |
| Combination of 1,2,3,0,00 | 6:1 | 13.16% |
The American Roulette table has 38 numbers, which mathematically means that with a single number bet, your chances of hitting success should be 37 to 1. That’s in theory. However, since the wheel features 36 regular red and black numbers and plus ‘0’ and ‘00’ pockets, your odds are not really 37 to 1. The casino will pay just 35 to 1 if you win, with the same also applies to the combination bets.
The expected odds of 37 to 1 are referred to as true odds, but the casino does not use those. Instead, the actual odds it uses is the 35 to 1. The ‘0’ and ‘00’ are two numbers out of 38, which makes for a percentage of (2/38 * 100) = ~5.26%. This 5.26% is, in this case, the house edge for American Roulette. It means that instead of a 100% payout for this game, the casino’s actual payout is (100-5.26) = a meagre 94.74%!
Given the House Advantage, Are Casino Games Even Worth Playing?
The short answer is yes, but it depends:
- For starters, not all games have such a steep house edge attached to them like the American Roulette example above. For instance, the European version, which has only a single ‘0’ pocket instead of two, has an edge of only 2.63%. That’s still high, but not as bad. Goes without saying then, that sticking to games with a lower edge is more advantageous.
- There are strategies to apply for each game that can make you more successful despite the house edge. And if you do get a good win sometimes, you can score an excellent profit that means you might not feel the effect of the edge at all.
- Casino games are not only played for profit. There’s a thrill to them despite the house edge, and they can offer superb entertainment if one stays within responsible gambling limits.
