The house edge is one of the major components in creating a successful online casino game that players enjoy. While gameplay and design are often talked about, the house edge, also known as return-to-player (RTP), is arguably the most important individual attribute. We wrote this article to break what the house edge is.
What is the difference between house edge and return-to-player?
These terms are interchangeable, with the only difference between house edge and return-to-player being the way they are displayed. For instance, in a game where a bettor is expected to have a loss of 5% over an infinite number of plays, the house edge would be depicted as 5%, whereas the return-to-player would be shown as 95%. Interestingly, house edge is usually referred to when discussing table games such as Baccarat or Roulette, while return-to-player is used when mentioning slot games.
What is the house edge, or RTP?
“The house always wins” is a popular saying worldwide. The reason the “house always wins” (which it doesn’t!) is because of the house edge. Whenever a bettor places a wager on a casino game, the game they are playing has an edge that slants the game in the casino’s favor. This edge varies depending on the game the player is betting on, along with the way they play the game (particularly in table games such as Baccarat or Craps).
As an example, someone betting $100 on a European Roulette game is playing against a ~2.7% edge. Given that edge, the player can expect a return (return-to-player) of $97.3 for every $100 wagered over an extended period of bets.
So how does the house not always win?
Most players do not wager hundreds or thousands of times in a single session, meaning that there is a significant amount of variance (or from a players perspective, luck) given that most popular casino games have an edge of around 1% to 3%. For the bettors who do wager many times in a given sitting, many deploy betting strategies such as the martingale system in an effort to swing variance in their favor. So while the house has a positive expected value and will likely win on the whole (factoring in all of the players wagering), many individual bettors can still come out ahead given how relatively small the house edge is.
What is the typical house edge of some popular games?
For some of the most popular games, bettors can expect the following:
- Blackjack – ~0.5%
- European Roulette – 2.7%
- American Roulette – 5.26%
- Baccarat (Punto Banco) – ~1.06%
- Online Slots – ~2-5%
- Craps – ~1%
- Video Poker (Jacks or Better) – 0.46%
At Lion Gaming Group we offer a full range of online casino games, you can learn more about our casino suite here. If you are looking for online casino software, and wish to enter the iGaming market, contact [email protected] for a free consultation today.