For those who are serious about their gambling, or even those who bet for fun but want it to be as lucrative as possible, it’s important to consider the house edge. This can often be seen as the idea that the house always wins—however, there’s much more to understanding the house edge than this. We break down what the house edge is, and why you should consider it before picking your next casino.
What is the House Edge?
It’s true, the house does always win. Or well almost always, some people have been able to beat the casinos, but this is only due to years of practice.
For casinos to exist, they need to make a certain degree of profit from all of the bets that are placed within their premises. To do this, the games are skewed in the favour of the house by a certain percentage. In essence, this is what the house edge is, and why it exists.
As an example, the house edge in a casino might be 4%. That means that on average, the casino is 4% more likely to win than the patrons betting. While this edge may not be immediately reflected if you bet $100, over the course of a day or a week, if $1,000,000 is bet, the casino will make pretty close to $40,000 profit as a result of the 4% house edge.
It can be viewed as the games being rigged in the favour of the house, but the reality is, it’s a necessity of operation for all casinos.
A Practical Example of the House Edge in a Casino
Let’s look at a practical example of the house edge.
Say you walk into SkyCity Casino in downtown Auckland, and decide to play a few rounds of roulette. If you’re betting on a European roulette table, there will be 37 different ways to win—numbers 1-36, plus a zero. If you bet correctly on a number, you will get paid at odds of 35:1. This means that if you stay put and bet consistently on the same number, statistically you will have to bet 37 times on average, in order to receive a payout worth 35 of your bets—essentially meaning you lose the value of two bets every so often.
Ultimately, this boils down to a 2.7% house edge for the SkyCity Casino if you bet on roulette.
The Law of Large Numbers and Why This Matters
As we’ve just seen in the example above, the house edge really starts to matter over time.
Because of the randomness and volatility of different casino games, your first few spins or bets won’t necessarily reflect the house edge. However, the law of large numbers states that the longer you play a game, the more likely it is to revert to its average. Essentially, the house edge starts to become more prominent, and the randomness is ironed out over time.
This is exactly why choosing a casino with the house edge in mind matters. To select an online casino with a good house edge, your number one guide to online casino games is NZCasino. Here, you’ll be able to see different house edges broken down and know if the house is taking 10% or 2%. Over a prolonged period of gambling, a casino with a high house edge will hit you in the pocket, so it’s wise to consider this before selecting where you’ll gamble.
