Casinos make a lot of money. According to Statista, American casinos generated $53.03 billion in 2021 alone with Nevada casinos raking in a whopping $13.43 billion. How do they do it? Are buffet sales that good? Is it the markup on drinks? Maybe it’s the ticket sales from the entertainment? No. Even though those things may contribute a little bit to the bottom line, they are not the reasons for these staggering profits.
The real reason casinos are able to make so much money is the house edge. Simply put, every casino game you play gives the casino an advantage. This advantage is minimal in some cases and quite significant in others. This tutorial will tell you everything you need to know about the house edge and why it matters to those who play casino games.
Let’s say you walk into your local casino and start playing your favorite slot game. You notice that the slot you are playing has an RTP of 95%. What does this mean? Well, RTP is the acronym for Return To Player. In this instance, you can expect an average return of 95% of your total wagers. If you put $1,000 into the slot machine, then you can expect to get back about $950, or 95% of your total stake. The rest of that $1,000, or that 5%, goes to the casino.
It’s important to understand a couple of things. For starters, that 95%, or 5% house edge is an average that is calculated over the course of thousands of spins. You could just as easily hit a jackpot, make a small profit, take a small hit, or lose your entire bankroll. The 95% RTP by no means guarantees that you’ll win back 95% of your stake in a single session.
On the flip side, that 95% RTP will be quite accurate if you played tens of thousands of rounds. And this is why casinos are mathematically guaranteed to earn a profit over the long haul.
Slot machines are driven by a Random Number Generator. This is essentially a computer program that randomly decides the outcome of every spin. In fact, the outcome is decided before the reels come to halt.
Because the results of every spin are left in the hands of a computer program, there is no way to overcome or even adjust the house edge. If the game has an RTP of 90%, then it will eat up 10% of the total wagers placed over a long period of time. For every dollar you profit from a slots session, the machine will eventually make up for it.
Again, this doesn’t mean that you can’t win by playing slots. Of course, you can if you have Lady Luck on your side. However, you cannot reasonably expect to win if you keep going back to that machine to play thousands of rounds.
Different slot machines offer different RTPs. Generally speaking, a game with a high RTP is considered low volatility. This means it tends to pay out frequently, but the payouts are typically on the smaller side. Conversely, a highly volatile slot machine with a low RTP will not pay out as frequently, but the payouts are often more substantial. By finding out what the slot game’s RTP is, you can gain a bit of insight into how often and how much you can reasonably expect to win. The RTP also tells you exactly what the house edge is.
A good way to learn more about slots and their house edges is to play for free at one of our top-rated free slots sites. You can also cash in on some great offers while you are at it.
As opposed to slots that merely require you to make a bet and spin the reels, most table games require players to make certain decisions. The decisions you make can have an impact on the house’s advantage. We’ll now take a look at house edge as it relates to the most popular table games on the planet.
If you have ever visited a casino online or on land, you have likely noticed that there are usually a few different variants of blackback being offered. Some of the most commonly played blackjack variants include:
While the object of these games is to beat the dealer by getting closer to 21 without busting, each version has unique rules that have an effect on the house edge. For example, some versions of the game require the dealer to stand on a soft 17 while others require the dealer to hit a soft 17. This has a significant effect on the casino’s edge. So does the number of decks. More decks equate to a higher house edge.
One of the things that attract players to the blackjack table is the low house edge which is often lower than 0.5%. However, being able to minimize the house edge in blackjack relies on how you play. You have to make all of the right decisions in order to keep the house edge as low as possible. This includes knowing when to hit, when to stand, when to double down, and when to split.
In other words, you need to play perfectly using the optimum strategy to keep the house edge low. Beginners and those who stray from the optimum strategy will give the casino a greater house edge.
Here are the house edges for some of the most popular blackjack games.
Blackjack Game | House Edge if you Play Perfectly |
---|---|
Classic Blackjack | 0.13% |
Vegas Strip Blackjack | 0.35% |
Vegas Single Deck Blackjack | 0.35% |
Atlantic City Blackjack | 0.36% |
European Blackjack | 0.42% |
Double Exposure | 0.69% |
Super Fun 21 | 0.94% |
As you can see, even Super Fun 21 has a house edge of less than 1%. However, you will only be able to keep the house edges this low if you don’t make any mistakes. You can hone your blackjack game by trying some of the free blackjack variants on offer at our most highly-rated online casinos.
Baccarat is another game that players like because of the low house edge. For those unfamiliar with the game, you can wager on the banker’s hand, the player’s hand, or a tie. The banker’s hand prevails 45.8% of the time while the player’s hand wins 44.6% of the time.
Draws occur 9.6% of the time. The important thing to know is the house edge is different for each of these wagers. The house edge for betting on the banker is 1.06% while the house edge for bets on the player’s hand is 1.24%. Then there is the house edge for betting on a tie which rings in at a pretty hefty 14.36%.
Baccarat is a game that doesn’t force players to make many decisions. Aside from choosing who to bet on and the stake size, the only decision a player has to make during the game occurs when the player’s hand equals exactly 5 after getting two cards. In this case, the player must decide whether to draw a third and final card or simply stand pat. Other than that, it’s really just a matter of placing your bet and waiting for the cards to fall.
As a point of interest, if the hand results in a tie, but nobody bets on the tie, that hand will be a push. Baccarat is a very easy game to play. If you’ve never tried it, why not head over to one of our recommended casinos online and give it try in demo mode for play money?
Roulette has been a mainstay at casinos all over the world since it was invented in the early 18th century. While the European version features 36 numbers and a single zero, the American version adds an extra zero into the mix. So, how much difference does the extra zero make? Well, the single-zero version of the game has a house edge of 2.7%. The wheel has a total of 37 slots, but hitting any of them pays out at a rate of 35:1.
Meanwhile, the American variant features a total of 38 slots due to the extra zero. However, the payout rates for straight-up bets remain at 35:1. This boils down to a 5.26% house edge. That’s right. By simply adding the extra zero, casino operators nearly double their house edge. If you want to minimize the casino’s advantage when you play roulette, make sure to play European roulette instead of the American variant.
Also, you have probably noticed that players can choose from a variety of wagers when they play roulette. Some bets like Even/Odd, Black/Red, and High/Low offer even-money payouts while a straight-up bet, or wagering on a single number, has a potential payout of 35:1.
Even though the odds vary, the house edge in roulette is the same no matter what type of bet you make. Aside from American roulette and European roulette, some of the most popular roulette titles include:
Not to be confused with traditional poker games that pit players against each other, casino poker games pit each player against the dealer. Like blackjack, there are multiple variants of casino poker. In most cases, the player has to beat the dealer provided the dealer has a qualifying hand. Also like blackjack, players will need to make several decisions each round. This means that the minimum house edge can only be achieved if the player uses the optimum strategy. Every mistake adds to the house’s advantage.
One of the most popular casino poker games is Caribbean Stud. In theory, the house edge for this game is 5.22%. However, we know that this number can be altered if you don’t adhere to the optimum strategy.
One of the keys to Caribbean Stud is knowing when to raise. If you consistently raise with A, K, J, 8, 3, or anything better, then the house edge rises to about 5.32%. If you raise any pair or better, the house edge climbs a bit higher to 5.47% while raising based on having an ace and a king or better nudges the house edge to about 5.7%. Perhaps the worst thing you can do in Caribbean Stud is blindly raising every hand. Doing so jacks the house advantage to an unpleasant 16.6%.
Three Card Poker is another beloved favorite among casino poker players. The theoretical 1.5% house edge is a lot more palatable that the 5.22% house edge in Caribbean Stud. Of course, we must again point out that enjoying this low house edge involves knowing exactly what you are doing. The house edge increases when the dealer is playing an inexperienced or reckless player. Other trendy casino poker games include:
While some casino goers are preoccupied with winning money, others look at gambling in terms of minimizing their losses. In general terms, games with small casino advantages like blackjack and baccarat offer much higher winning percentages than games like Big 6 and progressive jackpot slots.
The difference is that successful blackjack and baccarat players have to slowly grind out profits in smaller increments while slots give players an opportunity to win a significant chunk of cash in a single spin.
The casino’s advantage should always be a consideration when thinking about which game to play. With that said, it really depends on what your goals are. If you want to enjoy a longer session and experience more wins, then you are likely best served playing low-house-edge games. If you are in the mood for hunting down much bigger payouts, then you might want to look at a more volatile game with a higher house edge.
Not to be overly redundant, but you must remember that the minimum house edge in some games can only be had if you play perfectly. No matter what game you play, you can easily access all the information you need to optimize your approach. This doesn’t mean you are guaranteed to win, but you will be giving yourself the best chance to achieve success. We strongly urge you to check out our top casinos and try the games you love to play for free in demo mode.You will then be able to confidently play for real money.
Every single casino game gives the house a mathematical advantage. The house might occasionally have a bad night, but the law of large numbers guarantees that they will win it all back and then some. That is why casinos have always been, and always will be extremely profitable enterprises. It’s not the profits on drinks, buffets, and entertainment. It’s the house edge that makes casinos so obscenely profitable.
Blackjack, roulette, and high RTP video slots are among the games that offer the lowest house edge. We can also include Baccarat as long as you stay away from betting on ties.
The casino’s advantage is at its greatest when you play games like Big 6, Keno, and low RTP slots. In a lot of cases, the edge is in the double digits. The casino’s advantage in Keno is roughly 20% while Big 6 can be as high as 24%.
You can win at any casino game. Even if you take the longest odds, there is always a chance that you will get lucky and overcome them. It’s just that some games are tougher to beat than others.
The playing field is already tilted in the casino’s favor. Games like 6:5 blackjack and American roulette only tilt it more. You are much better off playing alternative variants like classic blackjack or European roulette. You might also want to avoid games like Keno, Big 6, and Sic Bo.
Different games have different RTPs. If a casino says it has a 97% RTP, it simply means that the average RTP of every game combined is 97%. Some games will have a lower RTP and some will be higher.
If you play at a land-based casino, you can usually find the RTP posted on the machine where the instructions are. At online casinos, the RTP is often displayed on either the game icon or in the instructions located in the menu. If you can’t find it, you can simply Google it.
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