Understanding the house edge

The basics of playing casino table games are quite easy to comprehend. Although the rules for each game vary, the main principle is the same for all of them. Whether it’s online blackjack, roulette or a roll of the dice at online craps, players are betting against the casino (also known as the house). When players lose their bets, the house wins the bet. When the players win, the house pays out. Read on to learn more.

How the house edge works

Most casino games are games of chance, meaning that when you play any game at a casino it is based on luck. Although there are some games that entail an element of skill such as poker, luck is usually the over-riding factor in determining whether a player wins or not.  The house edge is in place since casinos make money every time a player places bets.

Although the house doesn’t win each bet, the odds are indeed in their favour.

Dissecting the house edge

Each time a player places a bet at an online casino, it is usually a profitable one for the casino. Although it does tend to lose a few bets, in the long run, the casino always makes a profit.

To show you how it works, we’re going to use online roulette as an example. Many players place bets on red of black, so we’re going to use this as an example to show you how the house edge works. On a European roulette wheel, there are 37 numbers including the 0, so let’s assume that the player is playing for 37 spins, where one would expect to hit every number once on average.

Let’s get our thinking hats on. In those 37 spins, one would expect to hit red 18 times, hit black 18 times, and hit the green 0 once. Of course, this won’t work each time, but in the long term, the numbers will converge to look similar to these.

The player places 37 individual bets of €1 each, making for a total bet amount of €37. According to the average, the player would win 18 times when hitting red getting €36 in return, while the remaining 19 bets lose. Out of a total spend of €37, the player is expected to receive €36 back – meaning a house edge of 2.7%.

The same calculation can be applied to American Roulette, where you have two zeroes. Similarly, you would expect to receive €36 back from a stake total of €38, making for a house edge of 5.26%. All casino games work in a similar fashion, where the casino makes a small percentage of the bet each time someone plays, regardless of the game.

House edge and promotions

Even though there is a house edge to every game, there are ways and means of lowering the edge. One way of doing so is by taking advantage of promotions, casino bonuses and loyalty programs offered by the casino. Whichever option you go for, there is always some incentive attached to the promotion. Be it a cash bonus which is received each time you make a deposit or entries into tournaments; it is an extra.

We should also point out that the house edge doesn’t mean you will be a losing player. Many gamblers make some sort of profit, while the bonuses and promotions boost your winnings further, making it a solution where everyone benefits.

House edge and smarter play

There are plenty of games that require an element of skill and where making the right decision can help make a significant difference to the house edge. One such example is blackjack, where your choices can make a difference to the house edge. It is for this reason, that we stress that you have a strategy in place so you can boost your winnings.

If you play optimally, you are more likely to win. Although the house edge is still there, if you play strategically you can also win much more. Check out our blackjack cheat sheet to help increase your chances.

House edge: summary

Online casinos make a huge profit each year from each bet a player has placed. However, it doesn’t mean they have to take all your money. Take advantage of bonuses and promotions. Also play a little more smartly than the average player to increase your chances of your casino experience being a winning one.