House Edge

Turn the house edge in your favour

House edge and why it matters

You don’t have to spend long in the online casino gaming community before you come across the term ‘house edge.’ Even if you never open a publication aimed at industry insiders, you’ll see the house edge mentioned in articles about particular games and in strategic casino-playing guides. But what the heck is the house edge? And why does it matter? Read on, and all will be revealed…

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The house edge defined

In order for a casino - be it land-based or online - to stay in business, it has to be confident that it will make a profit. Because casino games are largely games of chance, the only way to do that legally is by ensuring that each game pays out slightly less to winners than the odds merit. This gives the house an ‘edge’ over the player, which means that it will always win over the long term.

A simple example

To illustrate this, imagine that you are invited to bet on the toss of a coin. If the coin shows opposite to your prediction, then the casino (the house) would keep your stake. However, if the coin shows the side that you predicted, the house would pay you odds of 1:1, doubling your stake.

That would be a perfectly fair game because the odds of 1:1 accurately reflect the 1 in 2 chance that you have of being correct. Unfortunately, if you and the house both win roughly the same number of tosses, as would be expected over the long term, neither one of you would make a profit. If you were to bet 100 x $1 and win 50% of the time at odds of 1:1, you would end up with $100.

In this scenario, there would be no reason for the casino to continue running the coin-flipping game. A casino is a business, and a business needs to make money to cover its overheads and make a profit.

Now the casino has just two options here. The first is to do something illegal, such as using a fake coin to rig the game in its favour. That would probably see the casino being shut down by the authorities pretty quickly. It would also lead to jail time for the owner, so it isn’t the route that casinos take.

The other perfectly legal option is for the casino to adjust the odds paid when you make a correct prediction. Instead of paying you 1:1 when the coin shows in your favour, it might pay odds of 9:10, giving you a 90c profit for every $1 you stake on a winning bet.

In this scenario, the casino is much more likely to win over the long term. If you were to bet 100 x $1 and win 50% of the time at odds of 9:10, you would end up with $95 (50 x 90c = $45, plus your $50 in winning stakes back). This means that the casino would get to keep $5.

The house edge here is therefore 5%. That’s because the casino gets to keep $5 of your money for every $100 that you bet.

Why the house edge matters

The house edge matters because it determines how much of an advantage the casino has over you in any given game or bet. The house edge varies from game to game and from bet to bet, so understanding what it is will allow you to focus on games and bets that have the lowest house edge. The casino will still win over the long term, but you’ll have a better chance of making your bankroll last.

Consider the game of European Roulette. The presence of the green zero on the wheel is really the house edge for even money bets. Two green zeros on an American Roulette wheel doubles the house edge on even-money bets. Because you now understand the house edge, you should see that the game of European Roulette is better for players than its American counterpart.

Now that you understand the house edge, you can start looking for the best paying slots in terms of their RTP (return to player) figures. You should also realize that the best games for beginners are those which give the casino the lowest house edge.

The worst casino bets for players

Knowing which bets are the best for players is all well and good, but you should also be aware of the worst bets as far as the house edge is concerned. We say that because some of the worst bets are actually offered in games that also feature the best bets. Not being aware of the worst bets could therefore mean that you end up placing one of them just because it seems like the right thing to do at the time. Read on, and we’ll explain exactly what we mean by that.

The worst bets in roulette

Roulette gives players a broad number of bets to choose from. The even-money shots are some of the best bets available in the casino, but the game also has a couple of the worst bets too. The one worst bet common to all games is the Straight Up, which requires you to predict which number will win on the next spin. The odds for success here are 35:1, but you only have a 1 in 37 (2.70%) chance of winning on a European Roulette wheel and a 1 in 38 (2.63%) chance on an American Roulette Wheel.

The other main bet to avoid in roulette is the Basket bet. This is available in American Roulette only, and it covers the numbers 0, 00, 1, 2 and 3. The odds for winning with this bet are 6:1, but your chances of winning are just 5 in 48, which equates to 13.16%.

The Worst Bets in Blackjack

You won’t have to play a game of blackjack for very long before the dealer shows an Ace as his up-card. In this scenario, you will be given the option of placing an Insurance bet for half the original stake. This would pay odds of 2:1 if the dealer’s other card has a 10 value to give him a blackjack. It sounds like a good deal, especially if you’re a cautious player, but don’t be fooled.

The problem with this bet is that the odds of 2:1 don’t often reflect the chances of the dealer having a blackjack. If you’re playing a game of Single Deck Blackjack and four cards have been dealt in total, there are 48 cards remaining in the shoe. There are only 16 cards with a 10 value in the whole deck, so even if they are still in the shoe, the chances of the dealer drawing one are 16 in 48, or 33.33%. If less than 16 cards with a 10 value remain in the shoe, the chances of him making a blackjack are even lower, so the odds skew heavily in the casino’s favour over the long term.

The worst bet in baccarat

When you bet on the Banker or the Player in a game of baccarat, the house edge is nice and small. However, you also have a third option, and that is to bet on the Tie. The odds paid for success with this bet are usually 8:1, but a Tie doesn’t occur often enough for those odds to be fair. What they do, in fact, is give the house an edge of 9.5%, which is more than the casino gets on many slot games.

A warning about side bets

We’ve already explained how the Insurance side bet is bad for blackjack players, but the same can often be said about all side bets in all games. There are an increasing number of traditional games that now offer side bets. For example, some blackjack games will allow you to bet on hitting a certain kind of blackjack hand, whilst some roulette games allow side bets on hitting streaks of winning spins. There are even games with side bets which give you a chance of winning a progressive jackpot in certain circumstances.

The thing to remember in all of these cases is that the casino isn’t just giving you more opportunities to win. It’s also giving you more opportunities to lose, or at least pay odds that are worse than your chances merit. If you win three hands in a row at the blackjack table, but you also lose three side bets in a row, the casino has retained more of your cash than it would have without the side bets. And even if you hit a side bet win now and again - which is to be expected - you can bet your bottom dollar that you’ll pay for it in the long term. The moral here is clear - never be seduced by side bets!

The best casino bets for players

Having explained what the house edge is and why it matters, we can now go a step further and take a look at which casino bets put the player at the least disadvantage. These are the ones that have the lowest house edge, and if you focus on them, you will be able to make your bankroll last longer than would otherwise be the case, all other things being equal.

The best bets in roulette

In the game of roulette, the best bets will always be the ones that pay even money. This basically means that you should restrict yourself to betting on the next number being red, black, odd, even, 1-18 and 19-36. However, also note that the type of roulette that you play can affect the house edge quite significantly.

The best type of roulette to play is European Roulette. That’s because it has just one green 0, and gives an overall house edge of 2.7%. Your chances of success with an even-money bet here are 18 in 37, which equates to 48.64%.

Compare this with the game of American Roulette. This has an overall house edge of 5.26%. There are two green zeros on the wheel, and your chances of winning with one even money bet are 18 in 38, which equates to 47.36%.

The best bets in blackjack

Blackjack is a game that can be good or bad, depending on how well you play. Make the best decisions according to Basic Strategy and the house edge will tend to be less than 1%. Make poor decisions and it will be a great deal higher. The key here is therefore to learn Basic Strategy as soon as possible and to play according to that strategy.

Note that the ‘less than 1%’ house edge referred to a moment ago assumes a game of blackjack that uses just one deck of cards. The more decks there are in the shoe, the greater the house edge is, so play Single Deck Blackjack wherever possible. This isn’t as widely promoted as many other blackjack games, and now you know why.

The best bets in craps

The game of craps is another that gives you a decent chance of enjoying a winning session before the house edge steals your bankroll. The bets to focus on here are the Pass Line, the Don’t Pass Line, the Come and the Don’t Come, which have a house edge of 1.41%, 1.36%, 1.41% and 1.36%, respectively.

It may surprise you to know that the Pass Odds, Don’t Pass Odds, Come Odds and Don’t Come Odds bets all have a house edge of 0%. That’s right - a zero house edge. Of course, you need to have made one of the bets mentioned a moment ago to be able to wager on these zero house edge outcomes, so the casino hasn’t missed anything.

The best bets in baccarat

Baccarat is generally a good game for anyone who wants to keep their house edge exposure to a minimum. Like Blackjack, you need to have a good understanding of the game to make the most of it, but your focus should be on the Banker or Player bets. These give the house an edge of around 1.06% and 1.36%, respectively. However, the casino will charge a 5% commission on Banker bet wins, which effectively makes the Player bet more appealing.

The best bets in video poker and slots

Whilst most people associate video poker and slot games as ones that are heavily skewed in favour of the casino, that is only the case in general terms. There are certainly slot games that give the house an edge of 10%, 15% and even more, but if you do your homework, you will also find that there are games which are much less favorable to the casino.

The thing to look out for is the Return to Player or RTP figure. The bigger the RTP of a slot or video poker game, the better. Look at the range of games available, and you’ll find that some are actually pretty good. For example, the Football Fortunes slot from Real Time Gaming has an RTP of up to 97.5%, whilst Jacks or Better Poker from Microgaming has an RTP of 99.54%.

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