House Edge: How It Works and What It Means
If you’re going to play casino games for real money, it’s important that you understand house edge. This is a key term that describes a game’s payout. When you know what it is, you’ll be able to tell which games are worth playing.
Understanding house edge in casino games is essential. © Dusan Kipic, Unsplash
House Edge in Casino Games
Some people play casino games for fun and excitement. Others try their luck at these games, hoping to win big and make a profit. If you’re serious about making money, understanding house edge is key.
Why? Because every casino game, whether it’s a real-life game or a digital one, has a house edge. Represented as a percentage, it indicates roughly how much money the house (i.e. the casino) stands to win in the long run.
House Edge Explained in Detail
Let’s say you come across an online slot and find out its house edge is 4%. What this means is that on average, over long-term play, close to 4% of all money spent on this slot goes to the casino.
The rest is paid out to players lucky enough to win. Of course, the payout rate might not equal the house edge. It could be higher or even lower.
There are two types of house edge: theoretical and actual. The theoretical house edge is how much of the money wagered on a game should, in theory, pay to the casino.
As for the actual house edge, this is how much the game is currently paying to the casino. It may be higher or even lower than the theoretical house edge.
The point is that the more you play a casino game, the closer its actual house edge should get to its theoretical one. Let’s say you play the slot we mentioned earlier with a house edge of 4%.
You won’t lose 4% of your money to the casino on every spin. However, as you play the slot your few wins and numerous losses should average out. Your payout rate to the casino should eventually reach 4%.
There’s no guarantee you’ll reach the theoretical house edge even if you spin the reels thousands of times. For example, you could play the 4% house edge slot and give 5% of your money to the casino.
Why House Edge Matters
Even though house edge represents a long-term average, it’s still important to consider it. When choosing a casino game to play, you should focus on ones with a low house edge.
The lower a game’s house edge is, the less of your money you should pay to the casino in the long run. Even though reaching the actual house edge can take a while, it’s still worth playing low house edge games.
In the short term, you can win big or lose a lot of money no matter what a game’s house edge is. As always, luck has a role to play in every casino game.
Even if you play a game involving decisions and strategy, such as poker, winning or losing is down to luck. No amount of skill will cancel out the randomness that all casino players face.
Games With Multiple House Edge Rates
Some games have more than one house edge rate. Some online slots let you buy an instant trigger of special features, such as free spins or respins.
The house edge for paid special features sometimes differs from when a feature triggers independently. It can be lower or higher; it depends on the slot you’re playing.
For example, blackjack has a single, main bet you have to place to participate in the game. Some games offer optional side bets with different house edge rates from the main bet.
House Edge vs RTP
Another important term you should be aware of is RTP, which stands for return to player rate. It’s the exact opposite of house, so it represents how much of your money a game should pay you on average.
A game’s house edge and RTP always add up to 100. For example, if a slot has an RTP of 96%, its house edge will be 4%. Of the two terms, RTP is the most commonly used one.
At online casinos especially, the RTP is what you’ll see in a game’s description, not the house edge. The higher this is, the more you should be paid on average (and the less money the casino will get).
Best Payout Casino Sites
If you have some spare cash and fancy trying your luck at real money online casino games, you should join one of the recommended best payout casinos. These are casinos with lots of low house edge games.
Look through the collection of games and you should find plenty of games with decent payout rates. The RTP should be listed in the game’s description or its information section.
If not, you should find it somewhere in the paytable. You can access this by loading the game. The paytable explains the rules and features and lists all the possible payouts.
If the RTP is nowhere to be seen in the paytable, which can happen, a quick online search is your next bet. Remember that a high RTP game is a low house edge game.
Low House Edge Games in Land-Based Casinos
Tabletop games such as blackjack, roulette, and baccarat tend to have very low house edge rates. This applies to both digital and real-life versions. With these games, the house edge is often less than 2%.
For slots, however, the house edge is usually a bit higher for real-life versions compared to digital ones. Slot machines have running costs, and their house edge is higher to cover this expense.
Table games are recommended if you’re visiting a casino and want to play games with a low house edge. Slots can still be worthwhile in the short run, but it’s all a matter of luck.
