The House Always Wins: Casino Profitability and RTPs Explained

‘The house always wins’ is a mantra that every casino frequenter ought to live by, and it’s a principle of ours here at online-casinos.com, and by across the world. In understanding this advantage that the casino industry has in every game, you can better understand your limits, knowing when to quit when your ahead. To take you through this house advantage, it’s necessary to unpack a collection of casino terms and lingo and achieve a more concrete understanding of how casino’s construct their business. Strap yourself in and we’ll guide you through the house edge, casino profitability and concept of RTPs.
A dollar sign in front of an animated casino with luxury cars outside.
Published on: 21 January 2021

Mathematical Advantage: The House Edge

Although casinos might seem like glittering palaces where the everyman can achieve their dreams, they’re that by design, and they are primarily commercial businesses seeking to turn a profit above all else. Following that, there is a ‘house edge’ or security of profitability built into every game on the casino floor.

Casino’s, like any other successful business, want to track their profitability closely and have some certainty about the return of the money put into the game by players back to the casinos pocket. This is expressed as a percentage of return on each game and reflects an average amount that is returned to the casino from players’ bets.

While individual players may find success, taking a few bets that fall to the spin of the wheel or the turn of the cards, simple probability theory kicks in when enough bets are made. Essentially this means that the more bets that are made, the closer the house gets to their house edge average. Let’s take you to the roulette wheel for a little walkthrough.

Check out our list of the games with the lowest house edges for great games that reduce the house edge. Or, alternatively, read this page for a list of the sites that have the highest average RTP rate, if you want to play on a range of high-paying games.

Example: Roulette House Edge

The game of American roulette has a house edge of 5.26%. This means that on average, for each dollar that is wagered, 5.26 cents will end up back in the pocket of the house. It’s not a huge percentage but it’s enough to guarantee a profit.

The house edge isn’t apparent right away, which is why it’s smart to place a few bets and quit while you’re ahead. Place a dollar on black and you might win or lose a dollar. Place a dollar on black 100 times and you might be up $5 (+5%) or down $30 (-30%).

Make that same bet 100,000 times, and you’ll nearly always be losing to the house by around 5.26% (down $5,260, while the house is up). The more you bet the closer your loss equates to the house edge. That’s the mathematical advantage that casinos have that no amount of ‘luck’ can overcome.

A person playing a slot machine.

Crunching the Numbers: Casino Profitability

When you put together all the house edge percentagesacross the games in a casino, you’re left with the profitability of the casino. No game is designed to reward the player more than it does the casino, so the profitability of the casino will always be in the positive.

As we established above, casino profitability increases and cranks up the longer a player places more wages and sits in the bettor’s seat. Here’s where another sneaky casino tactic comes in that bettors should be wary of – casino’s limit the players’ awareness of time through a lack of windows and clocks. Incredible!

We’ve put together a list of the techniques casino’s employ to keep players in the hot seat. While they can lead to a lot of money out of the bettor’s pockets, if you’re aware of the techniques you can reduce their effect on your betting sessions.

  • Lack of clocks
  • Lack of windows
  • Free drinks
  • Labyrinthine casino floors
  • Gambling conducive carpets (really!)
  • Stimulating lights and sound
  • Playing with chips rather than money
  • Subliminal messaging

While casinos will always have the advantage, the games range from slightly in the casinos’ favour to heavily advantaging them. Blackjack can have house advantages as low as 0.5% (with the statistically perfect playing strategy), so if you are aware of the casino techniques above and these games, you can minimise the house influence on the game, increasing the player’s profitability, rather than the casino’s.

RTP: Return to Player

Another way players can measure how far their bets can go is through the RTP or the ‘return to player’ of any given game. This is expressed in a percentage, and is essentially the flip side of the house advantage, stating the amount a player will get back on a wager, rather than the amount the house will get.

Taking the roulette example from above, with enough wagers, the house will receive a profit of 5.26%. Converting this into the RTP gives us 94.74%, meaning that placing 100 $1 bets should ideally (in the casino’s eyes) return $94.74 to the player. Note that the player is down on their $100 investment!

A high RTP is good, as close to 100% as possible, but just like the house advantage the RTP requires an increasing number of wages to conform to the probability of the equation and make sense. This means that by keeping sessions to a short time, players can escape the probability trap.

The Power of the Player

Sure, casinos are businesses, and we can’t really blame them for the advantages they have and the tactics they use. So long as us bettors are aware of this advantage, we can keep the chips stacked in our favour as much as we can.

RTP and the house advantage figures can be incredibly useful to players, as we can use this information to make informed decisions about the games we play, and when we can call it quits on a session.

The great thing about probability, is that it is expressed in an average, and as long players keep their sessions short, they can keep those explosive jackpot winnings for themselves before the probability kicks in. Casinos only win in the long run.

What’s more, the house edge is only present in games against the casino. Players can try their hand at player vs. player games, such as poker, where more control and skill are in the hands of the player. This accounts for all versions of poker, many of which you can find at most casinos. Happy gaming!

Frequently Asked Questions

Before we go, there are a few questions on our mind that require addressing. We get inundated with questions on all kinds of topics, and this fundamental element to casino operations is no exception. We’ve compiled the most common questions about the house edge right here for your viewing pleasure.

Why does the house always win?

Thanks to some number crunching and an understanding of probability theory, online casinos have fixed in place a mathematical advantage in their games, that means that over time, the games will win over the players. This does not mean that the games are rigged, but just that, overall, and over a long time, they will take in more money than they pay out to the player base.

What does the house always wins mean?

Essentially, that in the long run, the casino will always win. This does not mean that the casino will win every bet, just that return to player rates (RTPs) are set so that the house will profit overall. Not all RTPs are the same, though. Games like online blackjack have low house edges.

Why do I never win at the casino?

There are a number of possibilities and things to think about here. You might be playing for too long, continuing to bet until you have lost any winnings you had. Or you may be using the wrong kind of betting strategy for the game you are playing. Check out our roulette strategy page for some tips.

Do gamblers ever win?

Yes, gamblers win a lot of the time. On games like RNG roulette, bets on black or red will win almost half of the time. However, winning individual bets does not mean the same thing as walking away with profits. Make sure to play with a strict budget in mind, don't go chasing profits and your gambling will be much more fun.

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