House Edge Meaning: What It Is and How It Works

Understanding What Is House Edge in Casino

The house edge is the share of each bet that the casino anticipates it will retain in the long run. It’s a statistical edge that guarantees the casino will always win in the long term, no matter how much the outcome of any game might vary in the short term.

Knowing the significance of the house edge will help you place your bets wisely, as it differs from game to game. The larger the house edge in casino games, the more likely the casino is to win over a long period of time.

What is the difference between house edge and RTP?

It's easy for players to mistake house edge for the term "Return to Player" (RTP), but they are actually opposite sides of the same coin. Here's a brief explanation of both.

• House Edge: The percentage of each bet that the casino keeps to itself.

• RTP: The percentage of the total wagers that are returned to players as winnings over time.

For example, if a game has a house edge of five per cent, the RTP would be 95 per cent. Although the house edge works in favour of the casino, RTP works in favour of the players. The two are inversely related, meaning that as one increases the other consequently decreases.

How does a casino house edge affect your winnings?

The casino house edge is a mathematical advantage that ensures that casinos profit over time by retaining a percentage of each wager, directly reducing players' potential winnings. Expressed as a percentage, it varies by game. Blackjack may have a low 0.5%–2% edge with optimal strategy, while slots can range from 2%–15%, and American roulette sits at 5.26%.

For example, in a game with a 5% house edge, a player wagering $1,000 can expect to lose $50 on average, though short-term luck can lead to wins or larger losses due to variance. Over time, losses align with the house edge, making games like blackjack or baccarat (with lower edges) more favorable than high-edge games like slots or certain craps bets. While strategies and game choice can slow losses, the house edge guarantees that the casino will be profitable in the long run.

Lowest House Edge Casino Games

To increase your chances of winning and being profitable in the long run, you need to choose casino games by house edge. Table games like Blackjack, European Roulette and Baccarat offer the lowest house edge. 

House Edge in Blackjack

House edge is the casino’s mathematical advantage which is typically around 0.5% in games like Single Deck Blackjack. The lowest house edge blackjack variants, such as Classic Blackjack or European Blackjack, can drop this to as low as 0.4%. The house edge in online blackjack often ranges from 0.4% to 1%, depending on the software and rules, with single-deck games offering the best odds. Blackjack odds against the house improve significantly when players make strategic decisions, like knowing when to hit, stand, double down, or split, making skillful play crucial to minimizing the casino’s edge.

Baccarat House Edge

The banker bet in Baccarat carries a house edge of about 1.06%, while the player bet is slightly higher at 1.24%. This makes baccarat a game with relatively low house edge, though it doesn’t have the best odds compared to games like single-deck blackjack. The casino’s advantage comes from the 5% commission on banker bet wins and the game’s fixed rules, which slightly favour the house over time.

Roulette House Edge

The roulette house edge refers to the casino’s statistical advantage, which varies by game variant. The European roulette house edge is 2.7% which is mainly driven by its single-zero wheel. This offers better roulette odds for players compared to other versions. In contrast, the American roulette house edge is higher at 5.26% due to the additional double-zero pocket, which increases the casino’s advantage over time.

Slots House Edge

The slots house edge, typically ranging from 2% to 10%, represents the casino’s average advantage over players which is pretty much determined by the game’s Return to Player (RTP) percentage. How Online Slots Work involves random number generators (RNGs) that ensure unpredictable outcomes. The house edge on slots is built into the payout structure which means lower RTP games (e.g., 90%) have a higher house edge than high RTP games (e.g., 98%). 

For example, popular online slots like Starburst may have a house edge around 3.9% (96.1% RTP), while progressive jackpot slots like Mega Moolah often have a higher edge due to larger prize pools. This difference in house edge on slots makes choosing high-RTP games important for players aiming to minimise the casino’s advantage.

How to beat the house edge? Is it possible?

Unfortunately, no strategy can eliminate the house edge entirely, but there are ways to minimise its impact. You should only use strategies that improve your odds or help you manage your bankroll effectively. Here are some strategies that will help you lower the house edge:

• Card Counting

In games like blackjack, card counting can give you an advantage by keeping track of the ratio of high to low cards remaining in the deck. While this does not eliminate the house edge, it can reduce it.

• Bankroll Management

Bankroll management is all about setting limits on how much you are willing to bet can help you preserve your bankroll in the long term. 

• Optimal Strategy

Playing with an optimal strategy, especially in games like blackjack and video poker, can minimise the house edge. For example, learning the best moves in blackjack or understanding which hands to hold in video poker can reduce the house edge significantly.

• Myth vs. reality

There are many myths surrounding the idea of "beating the house edge", especially when it comes to luck or superstitions. The reality is that there is always a house edge which is always in favour of the casino, but the right strategies can help you reduce its effect.

The house edge in online casinos

Online casinos typically have the same house edge as traditional land-based casinos, but there are a few differences worth noting.

• Software-Based Odds

Online casinos use Random Number Generators (RNGs) to determine the outcome of games. This ensures fairness but players still need to be aware of the house edge.

• Differences in Payout Percentages

Online casinos may offer slightly higher RTP percentages on certain games compared to their land-based casinos. This is often due to lower overhead costs and the ability to cater to a larger, global audience.