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What is Casino House Edge?
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For the player of a single hand of a casino card game, or single spin of a slot, the outcomes are clear. You either win money or lose it – with some games having a ‘push’ result too.
The amount of money you’ll win or lose over a session in a casino table game is determined by two things:
- The mathematical advantage built into the game, and;
- How close to the perfect strategy you play
Setting aside strategy mistakes, all games have a built-in advantage. This comes into play over millions of hands. Say a game has a 5% house edge (this is on the higher side). You might win or lose money over 10 hands, or even 1000. If you were to play 1 million hands over several years, you’ll almost always find you lose close to exactly 5c for every $1 you staked.
In the short-term, variance gives you a shot at coming out ahead. The more hands you play the closer to the average you’ll get (a mathematical concept known as ‘regression to the mean’). Shorter-term, your results can vary, sometimes you’ll put together a string of wins – getting an above average return.
In many games, the perfect strategy is unclear or difficult to memorize unless you are an expert player. If you hit when you should stand in blackjack – even in a marginal situation – you are giving some extra money to the casino. You might win the current hand, though mistakes will always contribute to the house edge in the long run.
For a player seeking a casino with the best payout, there are four things to consider:
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- Find the games with the lowest built-in house edge
- Play them perfectly, so you don’t give away extra money
- Manage your ‘risk of ruin’ from natural variance with solid bankroll management
- Maximize your comps and bonuses to improve your profitability