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House Edge In Gambling

When you bet at any Malaysian online casino or in the real world, you will face certain chances of winning and certain chances of losing.

It should be noted that casinos need to benefit from their operations, as they do business rather than welfare. As a business, casinos need to make a profit and this means that in the long run, they need to profit from your gambling.

Therefore, all gambling games you meet will have the House Edge. 

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What is House Edge?

House Edge is a percentage of the profits that the casino earns in a game, rather than you in the long run.

In casino games such as slots, lotto, blackjack, roulette, and so on, there is a small percentage of profits that the casino will earn from gamblers. For example, you play a slot with the house edge of 5%. Let’s say you spend RM1000 on one year’s slot game. On average, you will lose 5% of your RM1000, which is RM50. 

This RM50 is a profit that will be saved by the casino. You will not lose RM50 all at once when playing the slot. There are rounds where you will win and there are rounds where you will lose a little bit.

However, when your wins and losses are counted together, the losses will exceed your profits slightly, and this is the money that will be kept by the real money casino and is known as House Edge.

House Edge Casino

How to Calculate the House Advantage

House Edge exists for every game. We know that in general, casinos will always be profitable in the long run.

For us to calculate this value, there are several ways and several types of formulas. Nevertheless, in general, the formula we can use is

(Probability of occurrence) x (return from occurrence) for all possible outcomes that will occur.

In addition, you can calculate the House Edge, we can take this formula:

Odds against success

This method of calculation is very commonly used for table casino games such as Roulette. In this formula, we need to calculate the probability against success and the probability of success first.

Probability of success = Number of ways to lose/number of ways to win

Probability of success = Number of ways to win/(number of ways to win + number of ways to lose)

After that, we will calculate it through the following formula:

House edge = (probability against success – Host probability) x probability of success

The final value will usually be written in fraction or decimal form.

Examples of calculations for a house edge can be seen in the game of Roulette. In Roulette, straight-up bets have a probability of success of 36/1, a probability of the host being 35/1, and a probability of success is 1/37.

When included in the above formula, it becomes

House edge = (36/1 -35/1) x 1/37 = 1 x 1/37 = 1/37 = 0.027

House Percentage

Now that we have calculated the House Edge according to the above formula, we will get a decimal or fractional value. To get a clearer picture, we must calculate the house advantage in the form of a percentage.

The percentage form gives a clearer picture so you know how much the casino is profiting from you in the long run.

For this purpose, you can use the formula:

House Percentage = House Edge x 100

So based on the example above, the percentage of houses is:

Percentage of houses = 0.027 x 100 = 2.7%

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House Edge for Different Casino Games

In this section, we will look at and compare the house edge for different casino games. For your information, some of these games have a range of house percentages.

This is because the House Edge for the game is different based on the different bets made. For example, for the game of Roulette, there are different house advantages for Roulette wheel one zero and Roulette wheel two zero. For Craps, there are different percentages for Pass/Come, Don’t Pass/Don’t Come, Big 6, Big 8, Any 7, and more bets. 

Casino GamesHouse Edge
Roulette2.70% / 5.26%
Baccarat1.01% / 15.75%
Craps0% / 16.67%
Keno20% / 40%
Slots2% / 10%
Sic Bo2.78% / 33.33%
Poker Tiga Kad 3.37% / 7.28%
Poker Pai Gow1.46%
Poker Video0.46%
Poker Caribbean Stud5.22%
Poker Texas Hold’em2.36%

How It Works in Slots

We will see how it works in slot games. Slots have a house edge of 2% -10% based on the number of reels and symbols available. Although the house advantage is quite high, slots are among the most popular games in the casino. This is because slot games do not require any prior learning of rules or training.

In an hour, you can make up to 600 rounds. Let us say we take a 10%house edge, and we assume you are only risking RM1 per round.

This means that in an hour, you can lose up to 0.1 x RM1 x 600 = RM60. If you bet RM10 per round, you can lose up to RM600 per hour.

This is very profitable for most online casinos, and this is the reason why they offer many slot games on every site. 

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How to Use House Edge Knowledge

There is good news for you, which is that you can use the house advantage for your own good in the following ways:

Picking a Game with the Lowest House Edge

This method is very easy to understand, i.e. if you play the game with a low house edge, you will not lose much in the long run. Examples of such games are video poker and Blackjack. 

Making the Best Probability Bet

When you place a bet, you can increase your chances of winning by choosing a bet with a higher probability, such as a bet with only two results where the probability of winning is 50%

Play With a Strategy

In a casino game like poker, your chances of winning can be increased by using strategy. The same goes for other table casino games. By using strategy, you can to some extent ‘lower’ the house advantage for that round of play. 

Understanding the House Edge is Important

In the real world of gambling, you have to be realistic and understand that you will not win every time. However, the chance to win once in a while still exists. Therefore, you should wisely manage the amount of money you will spend each time you gamble.

House edge is a truth that you should be aware of and accept as part of your betting experience in the long run. 

Frequently Asked Questions

One such game is Blackjack, with a house edge of 0.5%

Honestly, all casinos are supposed to have almost the same house edge, unless there are casinos where there are frauds to get higher profits.

You can increase your chances of winning a round using strategy but the house edge will still be effective in the long run.

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