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House Edge in Gambling: Definition, Examples & Long-Term Impact

House edge is the mathematical advantage the casino has over players, expressed as a percentage of every bet. This page shows what it means in practice, how it’s calculated, and how it affects your bankroll over thousands of spins, hands and sessions.

Key idea: House edge doesn’t guarantee you’ll lose tonight – it tells you how much you’re expected to lose on average over the long run if you play the same game and same bets over and over.

1. Simple Definition of House Edge

House edge is the average amount the casino expects to win from each bet, expressed as a percentage of the initial wager.

House Edge (%) = (Average loss per bet ÷ Initial bet) × 100

If a game has a house edge of 2%, that means that in the long run, players collectively lose about $2 for every $100 wagered. Individual sessions can win or lose much more – but over time, the math pulls results toward that average.

House Edge Math Basics

2. House Edge vs RTP (Return to Player)

Slot machines and some online games are described using RTP – “Return to Player” – instead of house edge. They’re two sides of the same coin.

House Edge (%) = 100% − RTP (%)

  • RTP 99% → house edge 1%
  • RTP 97.3% → house edge 2.7% (European roulette)
  • RTP 95% → house edge 5%

A higher RTP (lower house edge) doesn’t promise short-term wins, but it means your bankroll statistically lasts longer on the same bet size compared to a worse game.

3. House Edge Examples by Game

The exact numbers depend on rules, paytables and strategy, but these ballpark edges show how different games compare. For a fuller table, use House Edge by Game (Easy Reference).

Game / Bet Approx. House Edge Notes
Blackjack (basic strategy, good rules) ~0.5%–1% Requires playing correctly; poor rules or mistakes can push it up to 2%–3%+.
European roulette (single-zero) 2.70% Same edge on all straight bets if standard payouts are used.
American roulette (double-zero) 5.26% Adding 00 almost doubles the edge vs European wheels.
Baccarat – Banker bet ~1.06% One of the lowest edges in the casino, ignoring Tie bet.
Craps – Pass Line + odds ~1.4% on Pass Line Odds bet itself has 0% edge but requires Pass/Don’t Pass first.
Video poker – full-pay Jacks or Better <1% (if played correctly) Strategy and paytable quality are critical.
Many online slots ~3%–8%+ Varies widely; check game info for RTP when available.

Small percentage differences matter a lot over time. A 1% edge vs a 5% edge is the difference between losing ~$10 vs ~$50 per $1,000 wagered in the long run.

4. How Casinos Calculate House Edge

For many table games, house edge is computed from the rules and payouts by summing over all possible outcomes.

Very simplified example (European roulette, single-number bet):

  • There are 37 pockets: numbers 1–36 plus a single 0.
  • Single-number bet pays 35:1 if your number hits.

Possible outcomes for a $1 bet:

  • Win (1/37 chance): profit +$35
  • Lose (36/37 chance): loss −$1

EV = (1/37 × +$35) + (36/37 × −$1)
EV ≈ −$0.027 per $1 bet → 2.7% house edge

5. House Edge vs Variance (Short-Term Swings)

House edge tells you the average direction of your results. Variance describes how wild the ride is on the way there.

  • Low-variance games (e.g., even-money bets in blackjack or baccarat) produce smaller, more frequent wins and losses.
  • High-variance games (e.g., volatile slots, long-shot props) produce long stretches of losing with occasional big hits.
  • Two games can have the same house edge but very different short-term experiences.
Practical takeaway: Always look at both the house edge and the volatility of the game. For learning and bankroll building, start with lower-edge, lower-variance options like blackjack, baccarat and certain video poker games. See Slots, RTP & Volatility for more.

6. What House Edge Means for Your Bankroll

If you know the approximate house edge and how much you’re wagering per hour, you can get a rough sense of your expected long-term cost.

Expected Long-Run Loss ≈ Total Amount Wagered × House Edge

Example:

  • You play a 2% edge game.
  • You average $200 wagered per hour (e.g., 100 hands at $2).
  • You play 5 hours.

Total amount wagered ≈ $1,000 → expected long-run loss ≈ $20.

You might win or lose much more in a single session, but if you repeat this pattern many times, your results will tend to hover around that statistical cost.

7. Common Misunderstandings About House Edge

  • “House edge means I’ll definitely lose X% tonight.”
    No – that’s a long-run average over many bets, not a guarantee for a single session.
  • “A low house edge means I can beat the game.”
    Not by default. A lower edge just means you lose more slowly on average. You still need an actual edge (like skill in some games) to be profitable.
  • “I’m due for a win because the house has taken enough.”
    This is the gambler’s fallacy – past results don’t change underlying odds on future independent events.
  • “Big progressive jackpots must mean positive EV.”
    They can improve EV, but you need exact math to know if they actually flip it positive – and variance is massive even if they do.

8. Using House Edge to Gamble Responsibly

Understanding house edge is about taking back some control. You can’t change the math, but you can decide how much you risk and how long you play.

  • Pick lower-edge games that you enjoy.
  • Size bets assuming you’ll eventually pay that edge as the “cost” of entertainment.
  • Set time limits and loss limits per session.
  • Walk away when you hit your stop-loss or when it stops feeling fun.

If you feel gambling is no longer entertainment – you’re chasing losses, hiding play, or using it to escape problems – stop immediately and visit Responsible Gambling for support resources, or talk to someone you trust.

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