How The House Edge Works In Casinos

May 11, 2021, by Nedim Maric

House Edge In Casinos

To enter the gambling world is vital to understand the basic workings of casino betting. That is, bettors must understand how casinos and sportsbooks make money. So, this implies knowing what the house edge is. The first thing you should know is that bettors place their bets, and if they are winners, the house will pay them. If not, the house wins and keeps the money bet. Of course, each game has its own rules, and these are generally easy to understand. However, it is also vital that you know how casino gambling works and the casino business. In this sense, you have surely heard the phrase "the house never loses," but why does this happen?

Why Does The House Never Lose?

Whether a bettor wins at chance games is dependent mainly on luck. On the contrary, the casino winnings are in no way subject to random. Each game the house offers generates a profit or edge in the long term. This edge has its origin because casinos do not pay winning bets according to their accurate occurrence probabilities. The house does not win all bets; however, it will always have the odds in its favor. This is how casinos make money.

How The House Edge Works

Let's look at the house edge effect through an example. Let's assume that we are playing the European version of roulette and bet $ 1 on a number on each spin. Since this wheel has 37 numbers (from 0 to 36), the probability of winning will be 1 in 37. From these 37 numbers, 36 are red or black, and the zero is green. This green zero represents the house edge. Although the wheel has 37 possible outcomes, we are paid as if there were only 36. What we get if we win a bet is a smaller amount than it should be. The difference is equal to 1/37, which represents 2.7% of what you should earn in theory. If you bet on a single number, your winning probability is 1/37 = 2.7%, and your winnings should have been 36 times your bet. But, the casino will only pay you 35 times the amount you bet. There is a 2.7% difference from the ideal profit. Likewise, if you bet on the red pair, the number of possible outcomes will not be even. You will have (18/37) x 100 = 48.7% chance of winning, and not 50%. Although roulette has 37 numbers, the casinos pay you as if it had 36. Thus, they pay 2.7% less than what would be fair. This 2.7% is what is known as the house edge.

The Bettor Can Also Win

We have previously shown that the casino will always win in the long run. However, it is possible to win at casinos despite the existence of the house edge. This is because, in the short term, a bettor can win. Besides, using strategies and knowledge, the bettor can put the odds in his favor.

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