What is the House Edge in Online Casinos?
House edge is the advantage that gambling platforms hold over players. In technical terms, the house advantage is the percentage of every individual bet that an online casino expects to keep over the long run. This means that if you play games at an online casino over a period of time, no matter how lucky you are and the amount of wins you achieve, you will never get back 100% of your wagers. The house edge makes sure that the casino makes a profit. Normally, the house edge is presented as a percentage and varies from one game to the next. Some games may have a house edge as low as 0.5% and others as high as 10%.
Why Does the House Edge Exist in Casinos?
The house edge exists in casinos so that the platforms can make a profit. A casino is a business at the end of the day. So, like any business, the company has to make a profit. Through the house edge, casinos can make money. So, if the house edge for a specific game is 2%, this means that from the bets that are made on that specific game in the long run, the casino makes a 2% profit. It is worth mentioning that the sustainability of casinos is significantly dependent on a predictable revenue model, which is the house edge. Furthermore, the house edge makes sure that the platform makes revenue without compromising the value of fairness.
How Does the House Edge Work?
Let us use an example to explain how the house edge works:
The wheel of a roulette game is normally numbered from 1 to 36. So, you may assume that the odds of winning one bet is at 36 – 1. However, this is not the case. You may find that the payout for winning a bet is only 35 to 1. The discrepancy between what is meant to be the payout (1 to 36) and the actual payout (1 – 35), is what creates the house edge. Also, this difference is what is used to calculate the percentage of the house edge. For instance, in this example, the house edge for this game is around 2.7%.
When a house edge is high, the more a casino stands to gain from every bet that is placed on a particular game. It also means that the player’s chance of making a profit in the long run is low.
How the House Edge Varies by Game
Slots House Edge
The house edge for slots usually varies significantly depending on the specific title. For example, a slot title like Mega Joker has a 1% house edge, while Blood Suckers has a 2% house edge. However, according to experts, the average house edge on online slots is around 4%. So, when you find a game with a house edge that is less than 3%, then it is quite attractive.
However, you should still know that the results of slots are random. The house edge only affects the prospects of your winning. For instance, a low house edge means higher prospects of winning.
Craps House Edge
When it comes to craps, the house edge normally depends on the type of bet you place. For instance, the same options bets have a very high house edge. For instance:
- Snake Eyes – 13.89%
- Boxcars – 13.89%
- Yo – 11.11%
In craps, it is ideal to avoid single-roll bets and focus on bets carrying the lowest house edge like pass/don’t pass. Alternatively, you can opt for come/don’t come bets.
Blackjack House Edge
Blackjack is known for having a low house edge. The average house edge on a classic blackjack game with a six-deck shoe is usually around 0.4%. In fact, there are versions of this game at certain casinos with a lower house edge. For instance, you may find that a specific casino offers live dealer blackjack games with a house edge that is as low as 0.29%.
Roulette House Edge
The house edge when you play roulette usually differs depending on the variant of roulette. For instance, European roulette has a 2.7%, while American roulette has a higher house edge of 5.26%, and French roulette has a more attractive house edge of 1.35%. So, you can determine the game you should play to increase your winning chances using the house edge percentages.
Baccarat House Edge
When it comes to baccarat, the house edge is normally determined by the betting option you choose. In baccarat, there are three betting options. You can wager on the banker’s hand, player, or a tie. If you bet on the banker’s hand, the house edge is 1.06%, which is the lowest. The player’s hand has a house edge of 1.24% (a reasonable house edge), while the tie has the highest house edge of 14.16%.
Poker House Edge
The house edge for poker usually differs depending on which poker game you choose to play. For example, the standard Jack or Better poker game boasts of the lowest poker house edge of 0.46%. On the other hand, Deuces Wild has an average house edge of between 2.31% to 1.09%. Like on a blackjack table, you will only benefit from the lowest house edge if you develop effective strategies for playing the game.
How Online Casinos Use the House Edge
Revenue Generation
Online casinos use the house edge to generate revenue. At the end of the day, you must understand that an online casino is a business like any other. So, the company needs to make money in one way or another. Through the house edge, online casinos can generate predictable revenue. This is achieved by making sure that the online casino has a statistical advantage over players.
Player Retention and Bonuses
Online casinos can also use the house edge to retain players. This can be achieved by providing clients with a low casino edge. Any player who understands the impact of the house edge and how it works will always flock towards a platform that offers a low house edge. Therefore, a low house edge can help with player retention. Furthermore, an online casino can use the revenue generated from the house edge to facilitate the bonuses and promotions for clients. Bonuses are one of the ways through which casinos can retain their clients.
Role of RNG (Random Number Generators)
A random number generator’s role is to make sure that the outcomes of the games played at an online casino are completely random. This means that even the house edge does not mean that online casino games are not random. Online casinos use random number generators to enforce a fair online gaming experience.
Tips for Using the House Edge to Your Advantage
Select the Games Wisely
When you have knowledge about random number generators, you can make wise choices when it comes to game options. The trick is to focus on games with a low house edge because they will give you a better chance of winning against the house. You should know that the house edge usually differs from one game to another. So, do not assume that if games are in one category, they all have the same house edge. For instance, different slot games have varying house edges.
Learn Optimal Strategies
Do you know that you can affect the house edge of some games by the strategies you use? It is very true. For instance, for a table game like blackjack and baccarat, you can ensure that the house edge stays as low as possible by learning the best strategies. Use optimal strategies when playing most online casino games. For instance, learning when to hit, stand, double down, or split cards will help you keep the house edge as low as possible.
Manage Bankroll
Bankroll management will help you avoid issues like gambling addiction. It is all about managing the amount of money you set aside for gambling. Bankroll management usually starts by setting a gambling budget and then coming up with measures to make sure you do not go over the budget. Bankroll management can be a method for minimizing losses, which can help you beat the house edge (even though not fully).
Take Advantage of Bonuses and Promotions
Another tip for using the house edge to your advantage is maximizing bonuses and promotions. Using bonuses means that you will be spending less of your money on betting. So, even if a bet settles at a loss, you do not really lose. On the other hand, if it settles at a win, it works to your advantage. However, before you choose a bonus or promotion, you should understand the terms, especially the wagering conditions. This is because if a bonus has a high wagering condition, it is almost useless. Instead of working to your advantage, it will benefit the online casino.
Bet Smartly
You also have to be smart when playing popular casino games. Make smart choices like sticking to low-edge bets, managing your bankroll, managing your emotions when making gambling decisions, and not chasing losses. Betting smartly will help you avoid gambling issues like addictions and irresponsible gambling. It will also help you develop strategies to help you make the house edge work to your advantage.
Realistic Expectations for Players
Long-Term vs. Short-Term Perspective
It is important that you understand that casino games are meant for entertainment. So, you should set realistic goals and know when to stop playing the games to avoid falling for problem gambling. Also, understand that things like house edge and RTP are normally calculated in the long term. So, even if the house edge does not seem attractive, you can still win casino games in the short term. In a nutshell, the house edge does not affect the short-term perspective of the game.
Why the House Always Wins
Online casinos (the house) use short-term wins to entice players. However, in the long run, the house always wins. This is because the casino has to earn a profit as it is a business like any other. The house edge is the way through which the casino generates a predictable revenue. So, by calculating the house edge for different games, the casino can generate revenue from its clients.
The House Edge in Online Casinos: Ethical Considerations
Transparency in Online Casinos
Online casinos have to display transparency when it comes to elements like house edge. The platforms have to publish the RTPs for each game so that players can make informed decisions when choosing games to play. In fact, this is a requirement by regulatory bodies for online casinos that the platforms are transparent about this information.
Responsible Gambling
In the online gambling market, responsible gambling is a program that works towards making sure that clients have options for managing their gambling activities. For instance, online casinos are mandated to provide clients with tools and tips for gambling responsibly. These tools may include self-exclusions. The sites may also offer resources for helping clients manage their gambling or work through gambling problems like addictions. Also, platforms can use innovative technology to see the warning signs of problem gambling, like predictive AI.
The Most Common Misconceptions About the Casino House Edge
The House Edge Means You Always Lose
No, the house edge does not mean that you will always lose. You must understand that it is about the long term. You will still be able to win bets and sometimes experience losses. However, in the long run, if you calculate the amount of wins you achieved against the losses, you will realize that the house is the true winner. This is what the house edge is about.
The House Edge is the Same for Every Game
This is far from the truth. The house edge usually differs from one edge to another. In fact even games like different variants of blackjack have varying house edges.
Skill Doesn’t Matter
Skill does matter when it comes to making the house edge work to your advantage. When it comes to games like blackjack and baccarat, using the right strategies can help you keep the house edge for the games as low as possible. This will be very beneficial.
High RTP Equals Low House Edge
While in some cases it is true, this is not always the case. A casino game can have a high RTP and still not have a low house edge.
Casinos Cheat to Maintain the House Edge
As long as a casino is legitimate and reputable, it does not have to cheat to maintain the house edge. The fact that a house edge exists does not eliminate the work of random number generators. For instance, games like slots still use random number generators to give fair outcomes while still having a house edge.
You Can Beat the House Edge with a System
You cannot beat the house edge using a system. However, using the right gaming strategies, choosing the right games, bankroll management, and not basing your gaming on emotions can help you use the house edge to your advantage. However, the house always wins.
The House Edge is the Same Everywhere
The house edge is not a standard value. Remember that it is how the casino makes a profit. So, the casino has the right to determine the house edge for its games. So, the house edge may differ from one platform to the next.
Winning Big Means Beating the House Edge
Winning big on one bet does not mean that you have beat the house edge. You can win big on one bet and then lose on the next. Remember that the house edge is about the long run. No matter how big you win, if you calculate your losses and wins over a period like a year or a few months, you will see that the house has the advantage.
The More You Bet, the Better Your Chances of Winning
This is a very dangerous misconception that can lead you to lose a lot of money. Betting is all about chance and strategy. The number of times you bet or the amount you bet will not guarantee a win or loss.
Luck Always Beats the House Edge
Luck does not have any role to play when it comes to the house edge. You cannot beat the house edge even if you consider yourself to be the luckiest bettor. Luck can help you win a few games. However, the house always wins in the long run.
FAQ: The House Edge in Online Casinos
How is the house edge calculated?
Using an example is the best way to demonstrate how the house edge is calculated. For instance, if a roulette wheel has 36 slots, the true payout or odds for each should be 1 to 36. However, you may find that the casino’s payout or odds are 1 to 35 or 35. The difference between the true off and what the casino actually pays out is the house edge. It can be calculated into a percentage. In this case, the percentage is 2.2%.
Why do casinos have a house edge?
Casinos have a house edge so that they can generate revenue from their operations. The house edge indicates how much the casino makes from the bets that are placed on the platform in the long run. In order to earn a profit, the house edge is put in place.
Does the house edge mean players always lose?
The house edge does not mean that players always lose. No matter what the house edge is, casino games are still RNG-tested. This means that you can still win some games and lose some. However, in the long run, the wins for the house will be more.
Can skill reduce the house edge?
Yes, when it comes to specific games like baccarat and blackjack, your skills and the kind of betting strategies you employ can help you keep the house edge low. Your choice of bets can also influence the house edge for particular games.
What is a good house edge to look for?
A low house edge means that the online casino is pocketing a small percentage from your bets in the long run. This means that you have a better advantage. So, a good house edge to look for is one that is low. For instance, a game with a house edge of 0.5% is more attractive than one with a 2% house edge.
Why do casinos still profit even when players win big?
Casinos still make profits even when players win big because of the house edge, which is calculated over a long period. For instance, even if you win big today, in the long run, if you analyze the amount you have lost and what you have won, you will realize that the real winner is the house.
Which games have the lowest house edge?
Slots typically have the lowest house edge. However, blackjack games also boast of very low house edges. However, you should know that the platform and specific game usually determine the exact house edge.
Can players beat the house edge?
With the right skills and tips, you can keep the house edge low. However, at the end of the day, you cannot really beat the house edge. The casino has to generate revenue. So, the house edge is put in place to make sure this happens.
Can a casino operate without a house edge?
A casino that can operate without a house edge is one that does not need to make a profit. It is nearly impossible to find a platform like this. Any casino that is operated like a business cannot operate without a house edge.
