The House Edge

House Odds

Gambling in a casino is totally different from sports betting in that we can say with mathematical certainty what our chances of winning are based solely on the odds.

What is meant by the house edge? The house edge is the name given to the built in advantage the casino has over the punter in terms of the games that it offers. It can also be described as the cost of playing and goes some way to paying for all the glitz, glamour and free drinks that you see in some of the worlds best casinos.

The actual size of the edge differs from game to game but is usually dependent on whether the game is a game of skill or a game of chance, with the house edge being larger in games of chance.

No surprise then that almost every game that you find in casino is a game of chance. There are a few exceptions but for now the most important thing to remember is that when you walk through that casino door, and you play most of the games on offer (there are some exceptions) it is a certainty you will lose money if you play on a regular basis. Of course some nights you may have spectacular wins, but over the longer term, you will be looking at losses.

It is sad but true that most punters aren’t too interested in finding out what the true odds should be or the size of the advantage that the house has over them. They are just looking for the quick thrill and fast cash that gambling can undoubtedly provide.

Let take a look at the house edge for some of the most popular casino games:

· Baccarat Banker 1.17%

· Baccarat Player 1.36%

· Blackjack Single Deck 0.20%

· Blackjack Four Decks 0.51%

· Blackjack Six Decks 0.60%

· Caribbean Stud Poker 5.22%

· Craps Pass/Come 1.41%

· Craps Don't Pass/Don't Come 1.40%

· Pai Gow Poker 2.50%

· Roulette (Single Zero) 2.70%

· Roulette (Double Zero) 5.26%

· Slot Machines 3.5% to 15.0%

If you look at the above figures none of them seem enormously high. The house edge doesn’t look too big when you just examine the numbers. However it is important to relate the numbers to turnover and volume. For example:

How many times an hour is a roulette wheel spun?

How many hands an hour are dealt in a playing Blackjack?

The house edge works for the casino in the long term. Of course players can have spectacular runs of luck in the short or even medium term, but the numbers make sure that in the long term, the casino will come out on top. It is no coincidence therefore that casinos are open late into the night, even 24 hours in the US. To achieve that long-term profitability they have to fit in as many hands and wheel spins as possible, and that’s why they are open all day every day.

The house edge guarantees that the casino will; but we are forgetting one other very important factor. The house edge percentage is based on optimal play. This means that the player is always making correct bet in every situation. Think of it in terms of a computer playing instead of a human. The computer would always make the statistically correct bet based on the probability. In Blackjack for example, if you play perfect basic strategy then the house edge is reduced to almost zero.

The problem lies with the fact that we are not computers. Gambling encourages people to, well, gamble. We don’t always place the statistically correct bet – most people probably don’t know what the correct bet is to make or even how to find out. We don’t like to lose, we chase losses. We enjoy the free drinks………….

It is no surprise then to learn that the real return from most casino games is between 15% and 25%, far higher than the house edge. This is because many people don’t understand the numbers behind the games they are playing, or worse, don’t even care.

So next time you walk through the grand entrance of a new billion dollar casino, think for a minute of exactly where the money came from to pay for it all.