How the House Edge is calculated

To set up our example of calculating the house edge, let’s say that you are playing European roulette, which has a wheel with 37 numbers. If you make a high casino bet, there are 18 numbers that will give you a win (19-36) and 19 numbers (1-18, 0) that will give you a loss. In short, you have a 48.65% probability of winning your red bet (18/37) and a 51.35% chance of losing the bet (19/37). Red/black wagers also make payouts at 1:1, so this needs to be factored in too.

The best way to include all of this information is by multiplying the payouts by the win probabilities and subtracting. So for the aforementioned scenario, you would take (1 X 0.4865) - (1 X 0.5135) and come up with an answer of -0.027, or a 2.7% edge against you when expressed in a percentage. So does the same formula work for single number casino wagers? Sure it does….you just have to plug in some different numbers.

With a single number bet, you have one number that will give you a win and 36 numbers that give you a loss. In other words, there is only a 2.7% chance that you’ll win (1/37) and a 97.2% chance that the casino will win (36/37). Since you would get a 35:1 payout if you won, your formula would look like this: (35 X 0.027) - (1 X 0.972) = - 0.027, or a 2.7% casino house edge.

As you can see, coming up with a figure for the house edge in roulette isn’t extremely difficult. But determining the house edge isn’t always so easy with other games as you’ll see .

One of the biggest problems with calculating the house edge is that you don’t always know your chances of winning. Take craps for instance where there are lots of different combinations that form a specific number; here you almost have to consult a gambling strategy guide just to see what your chances of winning each bet are.

What’s worse is that games such as blackjack don’t even have a definitive house edge because your decisions push the house edge one way or the other. For example, you can bring the house edge under 0.5% with perfect play, or you can push it over 3% by making lots of routine mistakes.

The thing to take away from all of this is that you’ll have a very difficult time calculating the house edge for every game by yourself. Fortunately, plenty of people before you have done the work of defining house edges for every casino bet. So instead of tediously running numbers yourself, you can simply visit different internet sites and find the odds/house edge for casino bets.

Obviously, a low house edge is a good thing. But aside from knowing the obvious, many gamblers aren’t totally sure how the house edge helps them become a better gambler. Well despite the fact that the house has an advantage in almost every instance, a lower casino house edge gives you more time to play and a better chance at winning.

For instance, if you’re playing baccarat and making the banker bet every time, you’re only spotting the house a 1.06% edge. With this being the case, you’ll theoretically be able to play for a long time before the house grinds away your casino bankroll. Even better, you have a better shot at going on a run and winning money by the end of the session.

Just remember that the longer you stay on the tables during a casino session, the more chance the house has at eventually beating you.