House Edge Explained

Gambling is an activity that involves luck and chance – there is not much else to it really. People, though, often wonder if there is a way to influence the odds, use a proven strategy, and perhaps even win a bit more consistently.

Well, gambling is also a business model, and as such, the providers of games of chance want to make sure that their business is sustainable. Today, we take at the house edge, and how it impacts your chances of winning.  We will address some common things you may have already heard about but aren’t too certain about yourself:

  • We will talk about why the casino always wins and what casinos do to ensure that they are the winners in the end
  • Our team will explain the house edge in detail so that you can see how some games can lead to better results, but not in the long term
  • We will talk about how the longer you play, the less your chances of success are and how the house edge could make you lose money
  • You will also find out about how house edge can be different from one game to the next

With this in mind, let’s dive into the nitty-gritty of what the house edge is and how it influences your chances of winning.

Understanding the House Edge in Crypto Casinos

Let’s start with a sobering fact. No matter the game you play, the house edge would never favor you. You will always be playing against a house edge, which may be 5.36% or 0.36%. That seemingly miniscule margin is how companies are going to make money off of you. Crypto casino games are designed to always give the house a small advantage.

The house edge is implemented in every casino game, although it may be implemented differently. A house edge in a game of roulette should usually be one of the easiest to understand. Crypto Roulette is a good example. The game allows you to bet on half the numbers – bar the zero.

Now, this gives you an almost 50% chance, but there is the thing – it’s an almost 50% chance to win. A game of roulette also contains a zero (or even two zeroes) that suddenly change the equation. You no longer have a 50% chance of winning an Evens/Odds bet, for example. Rather, it’s 47.4%, or in other words, because of the 2.6% house edge that European Roulette – or single-zero roulette game has – you will not have it as easy as a flip of the coin. The zero is part of the game so that casinos can make sure that they have a chance to win in the long term.

There are indeed strategies that can allow you to win a lot if there were no zeroes. Stratagems such as Martingale, Fibonacci, Labouchere and other systems are fairly well-established and they make it easier for you to bet. However, you will eventually run out of luck and break the sequence, costing you dearly.

Crypto casinos even have an average expectation for how much they stand to win based on the house edge of each game. For example, American roulette is a game with two zeroes and a house edge of 5.26%. Casinos have calculated that they have about $50,000 profit for every $1 million wagered. The idea of the house edge is to not pocket too much money from gamblers either.

Gambling businesses want their customers to have fun and to leave the premises with slightly less money than they came in – this is how their business is sustainable, and how the casinos make money.

House Edge in Bitcoin Slots

We spoke about house edge in general – and used a popular table game as an example. Slots, and Bitcoin slots, may have a different house edge than the one advertised in table games such as European and American roulette, however.

The house edge in Bitcoin slots is determined by the Random Number Generator (RNG). This is an algorithm that ensures that players will statistically win anything between 95% and 98% of the time. Slot house edge may range from 5% to just 2%, but slots are slightly less predictable, because of other factors, such as volatility and betting limits for one.

The house edge in slots is basically the amount that you can expect to lose based on every $100 you bet – again this is a theoretical metric and it may vary for your personal experience, because the house edge, and the return-to-player rate, are usually calculated over hundreds of thousands of theoretical spins.

This is where the RTP is used. Basically, a Bitcoin slot that has an RTP of 97% essentially tells you that for every $100 you bet; you can expect to win $97 back statistically. Of course, you may win a lot more – or lose a lot more as well.

The house edge an RTP in slots will apply the same, but the longer you play, the more likely you are to get closer to the advertised return rate. A hundred or 1,000 spins are generally considered to be a good metric, but then again, you may end up spending a lot of units on 1,000 spins – around $100 if you are betting at the minimum $0.10 most slots now allow.

House edge in Bitcoin slots is once again in favor of the casino, but luck also plays a role – you may end up winning big, or even claiming a jackpot. Of course, there is nothing you can do to influence these chances. The best thing you can do is to pick the slots with the highest potential RTP.

Why Do Players End Up Losing More If the House Edge Is Fixed?

This is a great question. If the RTP is advertised as $97 for every $100 wagered, why do some players end up losing more? Well, there are different reasons why this is. As we have mentioned before, the house edge will make sure that you lose in the long-run.

The more you play, the higher the chance of incurring greater losses are. Yes, you may get lucky and end up winning more, but if you continue playing, the odds and house edge are simply stacked up against you. Players also struggle to understand that the house edge will apply throughout everything that you end up wagering, and not just the starter’s bankroll.

The short-term prospects of a casino players are somewhat better – especially if you start well and end up winning and advancing your bankroll a bit more than you expected. However, this is where the long-term disadvantage comes. The house edge will simply grind you down over the next hours of play, and that is why responsible gambling suggests to seldom play more than an hour if at all.

This also explains why casinos want you to stick around a bit longer if possible, showing you with gifts in land-based properties, and making the experience as immersive and entertaining as possible online. There is also the volatility of games – such as slots. A high volatility slot may mean that you could win bigger sums but the wins will happen less often, which can put your bankroll at a disadvantage if you fail to account for this particularity.

Alright, But Why People Keep Gambling If the Casinos Always Win?

Then again, another question pops – if the house edge is always going to put you at a disadvantage, why are casinos such successful businesses. Why do people keep coming back and playing more and more? Well, there are various reasons. Some people do not really comprehend the house edge and they are not bothered by it. Others still believe that they can defy the edge and have good luck no matter what the odds say.

After all, casinos do publicize the jackpots that people win because this drives in new players keen to try their luck. Maybe they too will realize a hefty profit like the person in the photo op? Well, it depends, but basically, players either don’t realize how significant the house edge is – misled by the small numbers – or they just don’t care.

Either way, the gambling industry spends considerable effort promoting itself as fun and enjoyable, and this is why people keep coming back to the casinos and want to play no matter what the odds say.

What Does Provably Fair Mean in Casinos?

Provably fair is a powerful algorithm that is used to test online casinos for fairness. The term and technology arrived along with Bitcoin, and the underpinning technology – blockchain. The blockchain allows for everyone to take a look at what has been going on and whether there has been manipulation.

The way this works is by the allocation of key strings. Players receive a key string that determines the outcome – and that key string must be present in the reported outcome on the blockchain. The results are immutable and impossible to tinker with, which means that if any manipulation did take place, it would leave a visible trace for virtually anyone to check and see the discrepancy.

An increasing number of online casinos today are switching to this type of technology to verify the outcomes and in a bid to strengthen trust and responsibility. Of course, there are some bad actors online, but the truth is that casinos have hardly any reason to resort to malicious practices. They are bound to keep winning no matter what.

House Edge Conclusion

Overall, the house edge is not too difficult to comprehend. The casinos do not want to convolute anything and tell you openly what to expect when you sit to play. They won’t truly go to the full lengths of the explanation as is not their place, but even a small house edge will ensure that the gambling businesses win more.

The argument is that you are having fun and your losses are not too significant. This is why players often fail to realize that the house edge is anything that they should pay a closer attention to. As long as a game of chance is fun, most people agree that it’s worth their time and effort – plain and simple.

Still, understanding how the house edge works is definitely something that will help you avoid games that may be not as good for you in the short term and focus on those that have the chance to pay a bit better.

House Edge Explained FAQs

What percentage of all gamblers win?

In fact, less than 14% of all gamblers end up winning. This means that the vast majority of players who leave casinos walk away with some loss. This is a fairly sobering fact, although some hopefuls would argue that 14% isn’t too bad at all.

What is the smallest house edge possible?

Blackjack usually has the smallest house edge to offer and players are actively gravitating towards this game. Of course, what the actual house edge of the game is will depend on the particular casino you are playing at.

Can I use a strategy to reduce the house edge?

There may be certain games and bet types where the house edge tends to be smaller. However, you still need to understand that you cannot actually change the house edge as such – it’s a matter of fixed and immutable mathematical constant. What you can do is pick games that offer a slightly better house edge across the board.

Looking for your next crypto casino? Check out Mega Dice or FortuneJack!

Written by Chris