Understanding the Casino’s House Edge

by GambleScope Review Team

Online casino games are money making machines. These games are designed to produce an overall profit for the operator. They don’t invest millions setting up platforms and polishing slick looking websites just to give away cash!

The good news is, if you know what you are doing, you can minimise the effects of the ‘house edge’ – which essentially refers to the casino's advantage and profit margin.

This guide explores the concept of the house edge, what it is, the difference between House edge and RTP, and where you can find online casino games with the most beneficial (lowest) house edge.

Casino House Edge Explained

The house edge of any casino game refers to the percentage profit that the casino stands to make in the long run.For instance, if a video slot game has a house edge of 3%, for every €10 you stake on this game, the casino is set to make €0.30. Therefore, your expected return should be around €9.70.

This doesn’t necessarily mean that a player is guaranteed to lose €0.30 for every €10 wagered –to be clear, players can win or lose much more as this is just an average value.

With a good understanding of house edge, you can quickly tell which games are potentially the most profitable in the long run. If you are playing at the casino for fun, the casino's house edge won’t matter at all; but if you are looking to play real money games with the aim of making a profit, you’ll find this guide very useful. 

The Benefit of Understanding the Casinos House Edge

Knowing the house edge of any game you choose to play is very useful especially if you are undecided about which game or game variation to play for the best chance of winning. While it won’t quite predict what will happen in the short term, it can help to provide a better long-term prediction of the likelihood of success compared to other games.

When the house edge is averaged out over the entire collection of a casinos games, it can also provide some insight into the likely success at one casino over another.

Difference Between Return To Player Percentage (RTP) and House Edge

House edge and RTP (Return to Player Percentage) are two sides of the same coin. House Edge is how much the casino stands to profit over a series of Games. Let's say for example that the house edge is 5%. The casino stands to make a profit of £5 for every £100 spent at the casino. The remaining £95 is what the player can expect to be returned on average for every £100 they spend on a game. This is what is known as the ‘Return to Player’ percentage, or RTP for short. If you know what the RTP of a game is, then you know what the casino’s house edge is of a game, as ultimately the two must equal 100.

Game Variance (Volatility)

Some players confuse game variance (sometimes referred to as volatility) with RTP and house Edge. This is NOT the same thing.

Variance is the regularity and size of the payouts on a casino game (particularly the slots). Essentially, games with high variance/velocity are those with high payouts, which occur less frequently, while low variance games are those that pay out small amounts, but more often.

The type of variance you choose to select entirely depends on your style of play and how much of a risk taker that you are inclined to be.

Another way to look at it is that low variance could be considered as a lower risk. If we consider slot games, for instance, then the apparent parallel would be that progressive Jackpot games are a higher variance than classic slot games. This is not the same as house edge and RTP.

The House Edge Fluctuates Between Games and Game Variations

You can reduce the house edge by making a good selection on the games you chose to play and finding game variations that offer the highest RTP (or lowest house edge, whatever way you wish to look at it.

Here is a selection of casino games and the typical house edge associated with each.

Caribbean Stud Poker – House Edge 5%

When you think of Caribbean Stud Poker, think Stud Poker minus the bluffing and hours spend in front of the mirror practising your poker face. Although it’s possible to play a similar hand alongside other players, you’ll be competing to beat the house. To start playing the game, place an ante bet; look at the dealer’s face card before finally deciding whether it’s worth placing any other wager.

Roulette - House Edge Ranges Between 2.70% and 5.26%

Roulette house edge is usually around 2.7% to 5.26% depending on the version you choose to play. The most common version online is the European roulette, which has a house edge of 2.7% and the American roulette that has a house edge of 5.26%. The difference arises from the number of slots that are found on the wheels.  While the European roulette has 36 digits plus a zero (0), the American roulette has 36 digits and a zero (0) too but with an extra double zero (00), which brings about the difference in house edge.

Slots – House Edge Ranges Between 2% and 10%

When it comes to slots, it pays to be particularly vigilant of the house edge (and RTP) as a significant disparity can be found between different types of slot games. You can reduce the house edge by searching for slot games that have plenty of in-game features.

Slot games that promise to payout from time to time shouldn’t have an RTP that’s less than 94%. Any slot game offered online with a lesser RTP value is just out to grab your cash, yet in recent years, software developers have come with slot games that alter their RTP based on how long you play. These are the video slot games that offer ‘levels’ as a feature. The more you continue playing, the higher you progress in the game, and the higher the RTP of the game rises. Playing these games for longer give you a better opportunity of winning more!  

Video Poker – House Edge Ranges Between 0.5% and 5%

Video poker requires skill and practice to perfect. When played with the optimum strategy (calculation cards are available online to help players achieve this) they can potentially offer the lowest house edge of any casino game.

When searching for a video poker game that has a low house edge, we highly suggest that you go for the full pay machines; those that have a 9-6 paytable, implying that they pay 9-1 when you get a full house and 6-1 when you get a flush.

Baccarat – House Edge from 1.5%

Bacarrat is a straightforward game that is very easy to play at optimum strategy once you know the rules. The house edge in this game varies depending on the number of decks that are in the shoe. Below are odds based on a six-deck game.

  • Tie – House edge of 14.44%
  • Player – House edge of 1.24%
  • Banker – House edge of 1.06%

Craps - House Edge from 5% to 1.4%

Simply put, craps is one of the most played casino game in Las Vegas and most of UK’s top casinos. But how about the online casino industry? The game’s complicated rules often discourage players from trying their luck. However, when compared it to other games, it happens to be the one with the lowest house edge when played at optimum strategy by experienced players. The house edge in this game can be significantly reduced when the right combination of bets are placed in different situations. It is advised to practice play for fun first before wagering your hard earnt cash.

Pass/Come Bet: House edge of 1.41%

Don’t Pass/Don't-Come Bet: House edge of 1.36%

Field (2:1 on 12): House edge of 5.56%

Field (3:1 on 12): House edge of 2.78%

Odds (6 or 8): House edge of 0%

Odds (5 or 9): House edge of 0%

Odds (4 or 10): House edge of 0%

Finding Casinos with a low House Edge

Finding casino’s that offer a low house edge will undoubtedly be of benefit if you want to win at the online casino.

Believe it or not, there is a new breed of casinos that are have emerged recently that allow players to play games with Zero House Edge; unsurprisingly, they are called Zero Edge Casinos.

You can be forgiven for believing that it is not possible because casinos need to make a profit, but you would be wrong. These types of casinos are possible because they operate on an entirely different business model to the standard casino, choosing instead to make their profits by providing the cryptocurrency for players to wager with.

These online casinos use the latest blockchain technology to offers millions of bettors around the world a fair opportunity to play zero house edge casino games. The Ethereum based platform introduced an online casino model that offers a 0% house edge on all its games.

Final Thoughts

It is important to be informed of the volatility (variance) and RTP (house edge) of the games you want to play if you wish to make a long-term profit at the casino. When you know what to look for, it is easy to compare casinos and casino games to find out what options will provide the best opportunities to make a profit when playing at the online casino.