For those who’ve never heard of the house edge, in a nutshell it’s the percentage total in which casino games have an edge or advantage over the player. To put it another way, casinos don’t win most of the time because they employ exceptionally lucky employees, they beat players because the odds are always stacked in their favour and this built in favour skewered to casinos is called the house edge.
While some think otherwise, the house edge is not actually the amount of money that is lost by the player in their total wager. Instead, the house edge is the average amount lost from the original bet, which is meant to make it easier for customers to judge their expected loss during a gaming session or a single hand of cards.
High and Low House Edges
In many games the house edge percentage is very high, which gives the house a higher advantage. For example, if a player were to do an initial wager of $100 on a game that has a house edge of 4%, then they could expect their wager to lose an estimated $4. Likewise, if they wagered $100 on a game that had a 0.30% house edge, then they could expect to lose 30 cents.
While this doesn’t sound like a large profit for the casino, consider how much the casino makes off all the players who do this over the course of a single day, then a week, then a month. All of these house advantages add up, otherwise it wouldn’t be profitable for the casino to stay in business, and it’s why some houses from around the world have an incredibly high profit at the end of each financial year.
As for how the house edge works in slot machines, there are built in random number generators commonly abbreviated to RNG’s. As the numbers or icons are combined at random when the button is pushed, there is no way to determine a machine that is close to winning, since they are programmed to generate more losing numbers / icons than winning ones. So for a machine with 5 reels and 35 potential stops on each reel, there are a total of 52, 521, 875 icon combinations which could potentially come up.
A Profitable Pursuit
The above provides a basic understanding of what the house edge is, and the reason it exists is simple: to allow casinos to gain a profit on each play and transaction that goes through them. It should also be noted that while many believe that casino’s cheat, it is the house edge alone which is reason enough for casinos not to need to resort to underhanded tactics and try to con gamblers out of their cash.
With the built-in advantage of various games, machines and card table, as well as payout odds that differ from true odds, casinos really need nothing more. As, for the most part, players are parted from their cash and while they may get ahead in the short term, if they keep going all in they’re going to lose more than they win, which allows casinos to flourish, and it is what keeps players coming back.