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This plays a pivotal part in the operations of an online casino because although every casino game may differ, there is one constant to them all; each one has a house edge which is associated with them. Whenever you play a casino game, whether this is a slot or a table game such as blackjack, each one has a different level of house edge which leaves one question.

 

What is House Edge?

When you place a bet on a casino game, one of two things happen; you either win or you lose, however, the main objective of the house edge is to ensure that casinos make money. Although some players do win some bets, there are occasions where the casino also wins because they retain a percentage of the stake, such as with slots for example. Players may win from a spin, however, overall the casino may be up based on how much that particular player has already wagered.

Most casino games are based mainly on chance and while there are some skill games such as poker or even baccarat to some degree, it is typical for luck to dictate whether a player wins or loses and as a result, a level of house edge can be placed on that.

There are occasions though when the house does not always win, however, the odds are often in their favour and as a result, this helps to tip the balance over the long term.

 

Understanding the Mathematics behind House Edge

Ultimately, when it comes to the gambling industry, the bottom line for casinos is to make money, while not losing any money, therefore creating as big a margin as they possibly can. As a result, this means that every game has a ‘house edge’ associated with them which means although they might lose a small proportion every now and again, they still make a profit in the long term. They know that for the very few percentages of people who win, there are more than enough other people out there to cover those losses on the balance sheet.

To work out the maths behind house edge, you first need to have a basic understanding of the games in a casino and by extension, all of the possible ways that you can win. In roulette for example, which is a game that has quite a lot of opinion about it due to the fact there are two versions; European and American, the latter of which has the ‘double zero’ tile. This means that with this, there is one out of 38 possibilities of a win in a single bet, while when playing European roulette, it comes to one out of 37 possibilities.

Furthermore, the fact that there are this amount of outcomes, it would follow logically (using the European style), that you can expect to hit each number on average 18 times on red, 18 times on black and then one on green which is zero. However, this is far from reality.

If you placed a bet of £1 on each outcome and a total of £37 you can expect to win 18 times on red and the same amount on black, getting a return of £36 which is obviously a loss, however, this outcome has a house edge of 2.7%.

Applying the same method to American roulette, where there are two zeros, this means that you would be looking to make £36 from a £38 bet, with the house edge a considerably increased 5.26%.

While the above examples are clearly bets that you wouldn’t place, slot players do this all the time without realising. If players set a balance of £10 on slot games and they lose half of it, the chances are that the slot will return some winnings from a couple of spins to keep the player hooked and give them hope of winning the jackpot. This though, in most cases is extremely rare; the surge that a player would have got from having a proportion of their balance returned would have given them renewed hope and so the cycle continues.

The key function in a slot is the random number generator, which helps to keep things fair, however, because the chances of winning large amounts of money are rare, the random number generator is heavily on the side of the casino; just like the house edge in games like roulette, however, there is quite a lot more subtlety.

 

How can you use House Edge to your advantage?

One of the key things to remember in gambling is that if you are on a winning streak, it will not last, mainly because of the house edge. This is especially the case if you are playing roulette, because of the sheer randomness and unpredictability of the game.

With this in mind, the best way that you can use house edge to your advantage is, once your winning streak ends, stop gambling because there is a high chance that your luck is about to run out. Most gamblers often make the mistake of thinking that one loss after a winning streak is just a blip and before they know it, they are chasing their losses and have lost more than they were in profit. This has been known as ‘gambler’s fallacy’ when a gambler gets it into their head that there is some higher force at work and they are destined to be okay.

Another way to apply house edge to your advantage is to know what the house edge for each game is and play to your strengths. This means playing a game that you at least know how to play and understand when luck might not be on your side. In this scenario, setting a budget and a time limit is also always a good idea because sometimes you might need to just simply cut your losses. In being able to understand this and only gambling small amounts at first until you realise that the house edge is in your favour, you can gradually get a marginal advantage over the casino. It is a little bit like playing the financial markets; knowing when to cut your losses and when to gamble.

In blackjack, which can be a volatile game anyway, this is a game which does require some element of skill, but also a sense of instinct, because it comes down to whether you should ‘stand’ or ‘hit’, ultimately. As a result, knowing whether your game or dealer needs you to hit when you reach 17 will give you some idea of how to play the hand, while knowing how many card decks (for land-based casinos) a dealer uses can also help you to make a judgement call.

Craps is a game which lends a particular level of control to the gambler when it comes to house edge, because with so many different bets that you can make, the house edge can vary dramatically, according to how and where you choose to stake your money. By betting on ‘place 6 or 8’ for example, this can have an edge as low as 1.52 percent, while any ‘7’ carries a 16.67 percent. Understanding this can be of considerable advantage to you.

 

Is there a way to lower the House Edge?

One of the ways that you can actually help to lower the house edge on casino games is if you take advantage of an online bonus, however, what is important to remember, that although this may work over the short term; in the long term it can catch you out.

While the house edge is one of the primary reasons that casinos make money, it does not mean that you will lose all of the time. With bonuses, what you are essentially doing here is reducing your risk, due to the fact that you have free credit to play with, which means that you have a chance to win with the casino’s money, as such, the house edge is reduced.

 

Summary

When it comes to the house edge in casino games, the most important thing to remember is that over the long term, the casino will always win however different games will have different levels which means it may be easier to win on some of them. Having a comprehensive understanding of the game and when to gamble will definitely help you in the long term, though like anything gambling-related, know when to walk away and cut your losses and definitely do not use it as a way of trying to make money and only gamble with what you can afford to lose.