Author: Olivia Brown
Last Updated: December 10, 2024
What is the House Edge in Gambling?
The casino is referred to as the house in gambling. A house edge, on the other hand, is derived from the two formative terms:
- The House, which means the casino and
- The Edge, which means an advantage, head start, lead, or dominance.
As such, the house edge refers to the casino’s mathematical advantage over the player. It is the probability that the casino will win against the player. This probability is usually presented as the ratio or percentage of money the player is expected to lose to the casino to the original amount wagered.
So, the formula for the house edge is as follows:
House edge = expected player loss/initial player stake
For instance, a 5% house edge means the player is expected to lose $5 for every $100 he or she bets at the casino. A high house edge means the player is more likely to lose.
The house edge usually varies from casino game to casino game. This is why it’s important that you know the house edge of every game you want to play at a casino.
Games with the highest player odds have the lowest house edge. For example, blackjack has one of the highest odds in the world of online casinos because its house edge is low at around 0.5%. Meanwhile, some slot games can have a house edge of up to 25% or even higher.
What is RTP (Return to Player)?
RTP is the opposite of the house edge. It refers to the percentage of money wagered that you can expect to win back from a specific game over time. RTP is also expressed as a percentage, indicating how favorable a particular game is for the player.
Some games, such as slots, have a more volatile RTP than others, like table games. The potential return on a slot machine may vary more widely than that on a Blackjack game.
The Relationship between House Edge and RTP
House Edge and RTP are two sides of the same coin. In most cases, to calculate RTP, you subtract the house edge from 100%. For example, if a game has a house edge of 2%, its RTP would be 98%. This means that, on average, the player can expect to win back 98% of their wagers over time.
A game with a high RTP is more favorable to the player, while a game with a high house edge is more profitable for the casino.
How Do You Find the House Edge?
The easiest way to determine the house’s edge is to look at a table in the casino. Some casinos post these tables throughout their premises so you can compare different games and see how much they cost.
The best way to find the house edge in online casinos is by looking at the game’s description. This will tell you how much the casino takes from each bet and what odds it offers.
Generally, here are the places where you can find out the house edge:
- On a game’s description online. Some online casinos will include this information on their websites.
- On the game’s rules and regulations. This will tell you everything from how many decks are used to how much the casino takes from each bet.
In most cases, the game developer will mention both the RTP and house edge of its games. This is usually seen in slot games, video poker, and specialty games.
Factors Affecting House Edge and RTP
Game Rules and Variations
Different rules and game variations have different House Edges and RTPs. For example, in blackjack, the number of decks used, the ability to double down, and the rules for dealers standing on soft 17 can affect the house edge. Understanding the rules and variations of a game can help a player choose games with lower house edges and higher RTPs.
Betting Strategies
They can influence how effectively a player manages their bankroll. For example, a progressive betting system like the Martingale or Fibonacci system can help a player recover losses more quickly but will lead to bigger losses if they hit a losing streak. On the other hand, flat betting – wagering the same amount on each bet – can reduce the risk of significant losses but may also limit potential gains.
Payout Rates and Odds
A game’s payout rate is the amount of money a casino pays out to players relative to the total amount wagered. Games with higher payout rates have lower house edges and higher RTPs.
Game Volatility and Variance
Volatility and variance measure how frequently and how much a game pays out. High-volatility games have larger, less frequent payouts, while low-volatility games have smaller, more frequent payouts. Generally, high-volatility games have a higher house edge and a lower RTP, while low-volatility games have a higher RTP and a lower house edge.
House Edge and RTP for Casino Table Games
Blackjack
- House Edge – 0.5%
- RTP – 99.5%
However, the RTP can vary based on factors such as the number of decks, specific game rules, and the player’s skill level.
Roulette
European Roulette
- House Edge – 2.7% (due to having only one zero pocket)
- RTP – 97.3%
American Roulette
- House Edge – 5.26% (due to the additional “00” pocket)
- RTP – 94.74%
Baccarat
Banker Bet
- House Edge – 1.06%
- RTP – 98.94%
Player Bet
- House Edge – 1.24%
- RTP – 98.76%
Tie Bet
- House Edge – 14.36%
- RTP – 85.64%
Craps
Pass Line Bet
- House Edge – 1.41%
- RTP – 98.59%
Don’t Pass Bet
- House Edge – 1.36%
- RTP – 98.64%
Three-Card Poker
Three-card poker is a simpler version of poker played with a single deck of cards. Players are dealt three cards each and must choose whether to fold or keep playing based on the strength of their hand.
Ante Bet
- House Edge – 3.37%
- RTP – 96,63%
Pair Plus Bet
- House Edge – 7.28%
- RTP – 92.72%
House Edge and RTP for Slots
Classic Slots
- House Edge – 10% and 20%
- RTP – 80% and 90%
The house edge for classic slots can vary significantly depending on the specific machine, the casino, and the game developer. This high house edge makes classic slots less profitable for players than other slot machines. The best classic slots with the highest RTP are,
- Starmania by NextGen – 97.87% RTP
- Guns N’ Roses by NetEnt – 96.98% RTP
- Medium Blood Suckers 2 by NetEnt – 96.94% RTP
- Jim Hendrix by NetEnt – 96.9% RTP
- Butterfly Staxx by NetEnt – 96.8% RTP
Progressive Jackpot Slots
- House Edge – 12% and 20%
- RTP – 88% to 80%
Since progressive jackpots are difficult to hit, the house edge for these slot machines is high. Similarly to classic slots, the higher house edge makes progressive jackpot slots less favorable to players than other slots. Some of the best jackpot slots with the highest RTP are,
- Divine Fortune Megaways by NetEnt – 96.09% RTP
- Mega Jackpots Cleopatra by IGT – 92.48% RTP
- Ghostbusters Level Up Plus by IGT – 98.00% RTP
- Imperial Riches by NetEnt – 96.88% RTP
- MegaJackpots Wheel of Fortune by IGT – 92.55% RTP
Video Slots
- House Edge – 1% and 10%
- RTP – 90% to 99%
The house edge for video slots tends to be lower than that of classic and progressive jackpot slots. As a result, these slot machines are generally more profitable, with better chances of winning over time. Some of the best slot games with a high RTP are,
- Mega Joker by NetEnt – RTP of 99%
- Ugga Bugga by Playtech – RTP of 99.07%
- Jackpot 6000 by NetEnt – RTP of 98.86%
- Blood Suckers by NetEnt – RTP of 98%
- 1429 Uncharted Seas by Thunderkick – RTP of 98.6%
- Rainbow Riches PickNMix by Barcrest – RTP of 98%
- White Rabbit Megaways by BTG – RTP of 97.77%
What is Volatility in Slots?
It is how frequently the game or machine pays out and the size of the payouts. A high volatility slot is a game that pays out large payouts that are far in between. The other way around is true – a low volatility slot dishes out frequent wins that are spread closely together.
A high volatility slot presents you with a huge risk and a huge reward gambling situation. You stand to win huge prizes provided you can play longer because the wins are rare. Below are some high-volatility slots you can consider:
- Medusa Megaways
- Immortal Romance
- Dead or Alive
- Jammin’ Jars
- Joker Troupe
House Edge and RTP for Video Poker
Deuces Wild
- House Edge – -0.76%
- RTP – 100.76%
Deuces Wild is a popular video poker game in which 2s can substitute for any other card to complete a winning hand. The RTP for Deuces Wild varies according to the specific paytable used, but a full-pay Deuces Wild game with optimal strategy will have an incredibly huge RTP.
Jacks or Better
- House Edge – 0.46%
- RTP – 99.54%
Jacks or Better is the most well-known and widely played video poker game. It is often considered one of the best video poker games for beginners due to its comparatively simple strategy and favorable odds.
Double Bonus Poker
- House Edge – -0.17%
- RTP – 100.17%
This game is a variation of Jack or Better that provides bonus payouts for certain four-of-a-kind hands. It is a full-pay game that follows a 10/7 paytable. However, locating a full-pay Double Bonus Poker machine takes a lot of work. Additionally, playing with the optimal strategy needed to achieve this RTP can be more complex than in other video poker variants.
House Edge for Casino Specialty Games
Keno
- House Edge – 25% and 30%
- RTP – 70 to 75%
Bingo
- House Edge – 5% to 30%
- RTP – 70% to 95%
The house edge of bingo usually varies depending on the number of players and the rules of the specific game. Bingo is a social game, so people are less fussed about House Edge and RTP.
Sic Bo
- House Edge – 2.78% to 33.33%
- RTP – 66.67 to 97.22%
Sic Bo involves rolling three dice and betting on the outcome. The house edge varies greatly depending on specific bet types.
Scratch Cards
- House Edge – 25 to 30%
- RTP – 70 to 75%
More on House Edge and RTP
Which Casino Game has the Lowest House Edge?
Blackjack is the casino game that has the lowest house edge. If you use a good betting strategy, the average RTP for blackjack is 99.5%, meaning the house edge is 0.5%.
What is a Good RTP for Slots?
Any rate above 96.5%. Games like Blood Suckers are known for their high payout percentage.
Why are Casinos called the House?
Casinos are called “The House” because the casino is derived from the Italian word casa, which means a house. The Italian word also translates to a small social club, summer house, or country villa.
Can I Increase My Chances of Winning Despite the House Edge?
Yes. While the House Edge cannot be eliminated, improving your skills, understanding game rules, and employing effective strategies can minimize its impact and potentially increase your chances of winning.
Why do Bookies always Win?
Bookies always win because they take a small cut, commission, or charge from both the losing and winning sides. This commission for keeping the sportsbook is called the vig, which is much like the house edge for casinos.
Unlike the house edge, which is designed into the game itself, the vig is worked into the odds of a sports bet. For instance, a sports bet that would otherwise pay 1 to 1, such as Odd/Even, usually has odds lower than 2.00.
The odds for the game between Liverpool and Watford ending in an Odd score is 0.85, while that for an Even score is also 0.85. That means the bookies take a vig of 0.15 from both sides, bringing the total vig to 0.30.
There are many other different reasons why bookies always win:
- Bookies change the odds as new information is known, such as player injuries, poor weather, and so forth.
- Bookmarkers usually set very small odds for strong teams, such as Manchester City, PSG, New England Patriots, and Golden State Warriors.
- They limit bet sizes for bettors who are known to win frequently.
- Bookies encourage bettors to make bad bets like accumulators, parlays, and long-short wagers.
- The best reason for bookies winning is that they take a small cut from the losing side.