House Edge in Gambling: Casino Games Odds Compared

The house edge is the built-in mathematical advantage that gives casinos an expected profit over the long run, with the keyword here being ‘expected’.

Many players assume that a 5% house edge means they’ll lose 5% of their bankroll every session, but that’s not how it works. The house edge is actually calculated across thousands or even millions of bets.

Every casino game has a house edge (with some exceptions that I’ll discuss below), but the percentage varies depending on the game and the specific rules being used.

In reality, the tiny percentage differences might not mean much in the short term because you can win big, break even, or even lose more than the claimed house edge.

Yes, all casino games come with a house edge, but the percentage can vary dramatically from one game to another. For example, blackjack and baccarat have exceptionally low house edges, while games like Keno are notorious for returning very little to players.

Below, I’ve prepared a table with the house edge of popular games, starting from the games with the lowest house edge to the highest. To make the numbers easier to understand, I’ve included the expected return from a theoretical A$100 wager.

The only exception is pokies, where the house edge varies depending on the specific game.

House edge is usually calculated against your original wager, not the total amount of money you put at risk when playing at a casino. This makes it a useful way to estimate expected losses.

For example, if a game has a 1% house edge, you can expect to lose around A$1 for every A$100 initially wagered over the long run. That’s easy for most players to understand and apply to their own gambling budget.

However, house edge doesn’t always tell the whole story when comparing different games. For example, some games require additional bets after the initial wager, while others don’t. As a result, two games with similar house edges can expose your bankroll to different levels of risk.

Let’s imagine that one player spends an hour playing blackjack and uses the basic blackjack strategy to get a 0.5% house edge, while another spends the same hour spinning pokies with a 5% house edge. Based on the house edge alone, blackjack clearly offers better odds.

However, things become more complicated when you factor in how much money is actually being wagered. A standard pokie is typically played with hundreds of spins per hour, which means that the total amount of money wagered may be far greater. Meanwhile, a blackjack player might place far fewer bets during the same period.

The same principle applies to games where the bet is fixed for each round, and when you can increase the bet mid-round. Let’s take European Roulette and Ultimate Texas Hold’em as an example.

European Roulette has a 2.70% house edge, while Ultimate Texas Hold’em has a 2.19% house edge, so Ultimate Texas Hold’em is that much better than roulette, right?

Well, let’s see what happens in a real-life scenario. In roulette, you simply place your bet and wait for the outcome. If you bet A$10, that’s the total amount you have at risk for that spin.

In Ultimate Texas Hold’em, a $10 ante often turns into a $30 or A$40 wagered by the end of the hand because you need to make additional bets after seeing some of the cards. Importantly, these extra bets are often made when your position is stronger.

Still, this means the casino’s advantage isn’t applied equally across every dollar wagered, so it’s almost impossible to calculate the exact house edge. In many games, like blackjack, the house edge also depends on your decisions, so if you make poor decisions, the house edge will be higher.

While house edge and volatility are often mentioned together, they measure two very different aspects of a casino game.

The house edge tells you how much of an advantage the casino has over the long run. Volatility, meanwhile, measures how much your results are likely to fluctuate in the short term.

In statistical terms, volatility is often measured using a figure known as the standard deviation. The higher the standard deviation, the more likely a game is to produce large swings in your bankroll, both positive and negative.

For example, baccarat has a relatively low house edge and low volatility. You can generally expect your bankroll to rise and fall gradually as you play. On the other hand, progressive jackpot pokies often have much higher volatility. While the long-term return may still be reasonable, players can experience lengthy losing streaks before landing a significant win.

This is why two games with similar house edges can feel completely different. One game might have low volatility and provide frequent small wins, while another may have longer stretches without a win.

House edge and RTP (Return to Player) are two sides of the same coin. In fact, they’re calculated using the exact same numbers, just from different perspectives.

The house edge represents the percentage of wagers that the casino expects to keep over the long run. RTP, meanwhile, represents the percentage that is expected to be returned to players.

The relationship between the two is simple:

House Edge = 100% – RTP

For example:

Let’s say you’re playing a pokie with a 96% RTP. This means the game is expected to return A$96 for every A$100 wagered over millions of spins. The remaining A$4 represents the casino’s expected profit, which means the house edge is 4%.

You’ll usually see RTP used when discussing pokies, while table games are more commonly described using house edge. However, both metrics essentially show how much of an advantage the casino has over players in the long run.

While it doesn’t necessarily mean that a game with a lower house edge is better, if your goal is to get the most value from every dollar you wager, I do recommend sticking to games with a lower house edge. Games like blackjack, baccarat, video poker, and certain craps bets offer some of the best odds in the casino, especially when played with the correct strategy.

That doesn’t mean you should automatically avoid games with a higher house edge. You can absolutely enjoy pokies, roulette, and other casino games if you find them entertaining.

There are multiple factors that influence the overall gambling experience, including volatility, game speed, bonus features, and jackpot potential. However, if you’re looking at things purely from a value perspective, the general rule is simple: the lower the house edge, the better the odds are for players over the long run.