House Edge 101
The house edge is the percentage of every bet that a casino expects to keep over time. It is the built-in mathematical margin that allows the house to profit regardless of short-term outcomes.
This article explains how house edge works in different casino games, how to calculate it and why it matters both for operators and for players who want to make informed choices.
The Concept
Every casino game is structured so that payouts are slightly lower than the true odds of winning. That difference is what creates the house edge.
Formula: House Edge (HE) = (Expected Loss ÷ Original Bet) × 100%
It is a long-term measure based on probability, not a short-term guarantee. While a single session can swing either way, over thousands of rounds the average result will move closer to the predicted house edge.
For example, in American Roulette at Casino Wild, there are 38 numbers — 1 to 36, plus 0 and 00. Even-money bets like red or black pay 1:1, but the zeros cause 5.26% of all bets to be lost in the long run.
House Edge by Game Type
House edge varies significantly depending on the game, rules and even betting options. The table below compares common values for major casino games.
| Game / Bet Type | Approximate House Edge | Notes / Conditions |
| Blackjack (basic strategy) | 0.5% – 1.0% | Depends on deck count and dealer rules |
| Baccarat – Banker Bet | ~1.06% | Includes 5% commission on banker wins |
| Baccarat – Player Bet | ~1.24% | No commission, slightly less favorable |
| European Roulette | 2.70% | Single-zero wheel |
| American Roulette | 5.26% | Double-zero wheel |
| Slot Machines | 4% – 15% | Depends on Return to Player (RTP) settings |
| Keno | Up to 25% | Very high edge in most versions |
This table illustrates that not all games are equal. Players who prefer longer playtime should focus on those with lower house edges.
Rule Variations Matter
Small differences in rules can alter the house edge noticeably.
- In Blackjack, if the dealer must hit on soft 17 instead of standing, the house gains about 0.2% extra.
- In Baccarat, removing the commission on the banker bet or altering tie payouts changes the margin significantly.
Casinos often balance these rule adjustments to remain competitive while maintaining profitability.
House Edge and RTP
House Edge and Return to Player (RTP) express the same concept from opposite perspectives.
- RTP = 100% – House Edge
- If a slot advertises 96% RTP, the house edge equals 4%.
For players, RTP shows how much of their total wagers are expected to return over time. For operators, house edge represents the theoretical profit margin.
In sports betting, this built-in advantage is called vigorish or margin, embedded in the odds to ensure consistent profitability across events.
Impact on Players and Operators
The house edge has practical effects on bankroll management, game design and long-term outcomes.
For Players
- Games with low house edge allow money to last longer and make losses less steep.
- Side bets usually have higher edges and should be treated cautiously.
- Strategy awareness helps reduce the edge — for instance, following optimal play in blackjack can lower it to under 1%.
- Short-term variance still allows for wins despite the statistical disadvantage.
For Operators
- House edge ensures consistent profit when games are played at scale.
- Operators adjust rules, RTP percentages and bet limits to balance fairness and revenue.
- Publishing transparent RTP data builds trust among players and regulators.
- Understanding the relationship between house edge and volatility helps manage cash flow and player retention.
How House Edge Is Calculated
Different methods are used depending on the game type:
- Mathematical Analysis: Based on the true odds of all possible outcomes versus the payout table. Common in games like roulette and baccarat.
- Simulation: Used for slot machines and complex RNG games where the number of outcomes is vast.
- Empirical Observation: Casinos monitor millions of rounds to confirm theoretical predictions.
These methods together ensure that the displayed RTP or house edge figure reflects the real-world performance of a game.
Comparing House Edges Across Games
When comparing games or casinos, house edge serves as a reliable benchmark. A player wagering €1,000 on a 5% house-edge game will, on average, lose €50 in the long term. In contrast, a 1% edge reduces that to €10 — a major difference for frequent players.
| House Edge | Expected Long-Term Loss (Per €1,000 Bet) |
|---|---|
| 0.5% | €5 |
| 1% | €10 |
| 5% | €50 |
| 10% | €100 |
This simple calculation demonstrates why professional players and analysts always consider house edge before placing bets.
Summary of Key Facts
- The house edge represents the casino’s built-in advantage.
- It results from paying winners slightly below true odds.
- It differs across games: under 1% for blackjack, up to 25% for keno.
- Even small rule changes affect the edge.
- Operators manage house edge carefully to balance player appeal with profitability.
- Understanding house edge helps players choose smarter bets and manage expectations.
House edge is not an invisible force but a measurable fact of casino mathematics — the foundation that keeps gaming both sustainable and predictable over time.
