House Edge of casino games compared
Last Update: Dec. 9, 2013
The following table shows the house edge of most casino games. For games partially of skill perfect play is assumed. See below the table for a definition of the house edge.
The house edge is defined as the ratio of the average loss to the initial bet. The house edge is not the ratio of money lost to total money wagered. In some games the beginning wager is not necessarily the ending wager. For example in blackjack, let it ride, and Caribbean stud poker, the player may increase their bet when the odds favor doing so. In these cases the additional money wagered is not figured into the denominator for the purpose of determining the house edge, thus increasing the measure of risk.
The reason that the house edge is relative to the original wager, not the average wager, is that it makes it easier for the player to estimate how much they will lose. For example if a player knows the house edge in blackjack is 0.6% he can assume that for every $10 wager original wager he makes he will lose 6 cents on the average. Most players are not going to know how much their average wager will be in games like blackjack relative to the original wager, thus any statistic based on the average wager would be difficult to apply to real life questions.
The conventional definition can be helpful for players determine how much it will cost them to play, given the information they already know. However the statistic is very biased as a measure of risk. In Caribbean stud poker, for example, the house edge is 5.22%, which is close to that of double zero roulette at 5.26%. However the ratio of average money lost to average money wagered in Carribean stud is only 2.56%. The player only looking at the house edge may be indifferent between roulette and Caribbean stud poker, based only the house edge. If one wants to compare one game against another I believe it is better to look at the ratio of money lost to money wagered, which would show Caribbean stud poker to be a much better gamble than roulette.
Many other sources do not count ties in the house edge calculation, especially for the Don’t Pass bet in craps and the banker and player bets in baccarat. The rationale is that if a bet isn’t resolved then it should be ignored. I personally opt to include ties although I respect the other definition.
Element of Risk
For purposes of comparing one game to another I would like to propose a different measurement of risk, which I call the "element of risk." This measurement is defined as the average loss divided by total money bet. For bets in which the initial bet is always the final bet there would be no difference between this statistic and the house edge. Bets in which there is a difference are listed below.
The standard deviation is a measure of how volatile your bankroll will be playing a given game. This statistic is commonly used to calculate the probability that the end result of a session of a defined number of bets will be within certain bounds.
The standard deviation of the final result over n bets is the product of the standard deviation for one bet (see table) and the square root of the number of initial bets made in the session. This assumes that all bets made are of equal size. The probability that the session outcome will be within one standard deviation is 68.26%. The probability that the session outcome will be within two standard deviations is 95.46%. The probability that the session outcome will be within three standard deviations is 99.74%. The following table shows the probability that a session outcome will come within various numbers of standard deviations.
I realize that this explanation may not make much sense to someone who is not well versed in the basics of statistics. If this is the case I would recommend enriching yourself with a good introductory statistics book. There is also a good definition of the term and examples on BJ Math.com .
Although I do not mention hold percentages on my site the term is worth defining because it comes up a lot. The hold percentage is the ratio of chips the casino keeps to the total chips sold. This is generally measured over an entire shift. For example if blackjack table x takes in $1000 in the drop box and of the $1000 in chips sold the table keeps $300 of them (players walked away with the other $700) then the game's hold is 30%. If every player loses their entire purchase of chips then the hold will be 100%. It is possible for the hold to exceed 100% if players carry to the table chips purchased at another table. A mathematician alone can not determine the hold because it depends on how long the player will sit at the table and the same money circulates back and forth. There is a lot of confusion between the house edge and hold, especially among casino personnel.
Hands per Hour, House Edge for Comp Purposes
The following table shows the average hands per hour and the house edge for comp purposes various games. The house edge figures are higher than those above, because the above figures assume optimal strategy, and those below reflect player errors and average type of bet made. This table was given to me anonymously by an executive with a major Strip casino and is used for rating players.
A Spanish translation of this page is available at www.eldropbox.com .
Reason #3 why the Wizard likes Bovada:
In my opinion many online casinos are too stingy when setting the odds on their games. They think they will make more money that way but I believe they are misguided, because when players lose too quickly it’s not fun, and those players might not come back.
Bovada is one of the few casinos that understands this. They offer generous odds to let you play longer and get you a better chance of winning. Among their generous offerings are Full-Pay Jacks or Better returning 99.54%, five other video poker games paying over 99%, single-zero roulette, and my favorite, Double Jackpot Poker, returning 99.63%!
Kudos to Bovada for not being afraid to give their players a good gamble.