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House Edge: the mathematical advantage of the casino

The casinos work thanks to the generated turnover. Part of it is returned to customers, but the remaining amount goes to the brand's account. For this purpose, it is necessary for the casino to have an advance against the participants, which leads to a potential return on the games below 100%.

The term House Edge is the advantage of the casino over bettors. In order to specify the definition of the phrase, first of all, we will get acquainted with the concepts of payout ratio and return on play.


house edge

Payout ratio

The payout ratio is the main way to calculate the final profit. Let's say you have chosen an event with a 4:1 ratio. This means that a bet of BGN 1 will reward you with a net profit of 4 euro, without including the value of the returned bet, i.e. the total amount received is 5 euro.

Use the following formula to calculate the profit (profit in digital terms):

((a + b) * bet) - a bet where a:b is the payout ratio



Win Rate

Win Rate, also called return, is a term used to illustrate potential long-term profits. The average percentage of slots varies between 90-99%, and the highest win rate of casino games is classic blackjack - about 99.41%.Thanks to this information you can calculate the advantage of the online casino by subtracting the payout ratio from the maximum amount (100%).

 

House Edge

Perhaps the terms described above make up the definition of House Edge. This is the advantage of the gambling company, based on bets for a longer period. The lower the percentage in favor of the casino, the more likely you are to take the winning side. To avoid terminology, we will illustrate the advantage of casinos with an example from roulette.

The payout ratio for a Straight Up bet is 35:1, i.e. you can collect BGN 36 with a bet of BGN 1. However, the sectors of the Roulette wheel are 37, which is where the disadvantage to the bettors comes from. To accurately calculate the return, divide the maximum coefficient (36) by the number of possibilities (37). We get 97.30% (36/37) long-term cashback, which means that 2.70% is the House Edge of the casino.

Note, however, that American roulette has a second green sector "00", which further reduces the payout ratio.

 

Hold percentage

Hold is the percentage that is withheld from bets played. The term is applied to table games, with a standard hold percentage between 12% and 20% depending on the type and conditions of the respective gambling product.

 

The mentioned facts and examples are based on a lot of bets in the respective game. However, it is quite possible to outsmart the casino, generating a quick profit that meets your needs. There is the other extreme - long losing streams, which take over the bank and do not allow further participation.

Be responsible and don't forget about the advantage of the online casino over your bets.