What is the House Edge?


The House Edge is the percentage of each bet that the Casino expects to keep for itself. To put it simply,

the House Edge is the difference between the true odds and the odds that the casino pays you when you win. 

Take a coin flip, for Example:
When you flip a coin, the probability of it landing on Heads or Tails is 50%. True odds for this would be 1-1, meaning a bet of $1 could win you $1 profit. However, if the Casino decided to pay 95 for a winning $1 bet, this gives them a House Edge of 2.5%.

You could also consider a similar analogy in simply throwing a single die:
The probability of calling the correct number is 1 in 6 (or 16.7%). This would give true odds of 5-1, so a winning bet should pay 5 times the amount wagered. However a Casino in this situation might only pay 4 times the bet giving them a House Edge of 16.7%.

Why is there a House Edge?

In a Casino, odds are always calculated to benefit the Casino, not the player. Like any other business a Casino is looking to turn a profit, and their method of doing so is by building an advantage into the game.
For certain games that require technique, the House Edge is not built in to the same extent, and if a skilled player delivers a perfect game, the Casino’s advantage approaches zero.

The House Edge will always vary from game to game and, within each game, from bet to bet.

House Edge in Traditional Casino Games

Looking at specific games, the House Edge can vary greatly.

Blackjack defies the House Edge
Blackjack is not simply a game of chance as with Roulette. The odds are calculated to take into account the fact that they are fluctuating all the time as the advantage switches hands between the Casino and the player, and with each deal the odds for the remaining cards also changes. This is why players that can count cards accurately often win a lot of money.

Roulette has a built in House Edge to give the Casino an advantage
A Roulette wheel features numbers from 1 to 36, and as such the Casino pays out 35-1 odds. However, these odds are given without taking in to account that there are 37 possible outcomes on a single 0 table, and 38 possible outcomes on a 00 table. True odds should be 36-1 or 37-1, thus the Casino has a House edge of 2.7% or 5.36% respectively.

How to Use the House Edge to Your Advantage

The House Edge is, for the most part, the Casino being open and honest about the built in profit they expect to make from each bet, over the long term. This transparency is a good thing for players, as it forces online Casinos to remain competitive as they don’t want you wandering off to another Casino. The House Edge allows you to make an informed decision when choosing a Casino and in selecting games, as a quick comparison might prevent you from opting for a game with a sizeable House Edge. Practising and improving your technique at games that require a lot of skill can help you to narrow the House Edge. This specifically applies to games like Blackjack and Poker, when a strong strategy can reduce the House Edge to virtually nothing.