House Edge Explained: The Math Behind Every Casino Game
Every casino game has a built-in mathematical advantage for the house. This isn't a secret or a scam. It's simply how casinos stay in business, and it's known as the house edge.
House edge tells you how much of your wagered money you can expect to lose over time. A game with a 2% house edge will, on average, return less of your money than one with a 0.5% edge. The differences might sound small, but they add up significantly over hours of play.
What makes this useful is that house edge varies dramatically between games. It even varies between different bets within the same game. A single craps table offers bets ranging from 0% house edge to over 16%. Knowing which is which helps you make smarter decisions about where to put your money.
This guide covers what house edge actually means, how casinos calculate it, how it compares across popular games like blackjack, roulette, baccarat, and craps, and how you can use this information to get better value from your play.
What Is the House Edge of a Casino Game?
House edge is the percentage of each wager that a casino expects to keep over the long run. It's baked into the rules and payouts of every game, ensuring the house always has a mathematical advantage regardless of individual wins or losses.
A simple example makes this concrete. If a game has a 5% house edge, the casino expects to retain $5 for every $100 wagered on average. You might win $50 in one session and lose $80 in another, but across thousands of players making thousands of bets, the math holds. The casino keeps roughly 5% of all the money that moves across the table.
You'll often see house edge discussed alongside RTP, or return to player. These are two sides of the same coin. House edge plus RTP always equals 100%, so a slot with 96% RTP has a 4% house edge.
The casino industry tends to use RTP when talking about slots and house edge for table games. It's mostly convention, though the framing differs slightly. RTP emphasizes what players get back, while house edge emphasizes what the casino takes.
| House Edge | RTP | Example |
|---|---|---|
| 0.5% | 99.5% | Blackjack with optimal strategy |
| 2.7% | 97.3% | European roulette |
| 4% | 96% | Typical online slot |
| 5.26% | 94.74% | American roulette |
One distinction matters more than terminology. The house edge applies to your total amount wagered, not your starting bankroll. If you sit down with $100 and cycle through it multiple times during a session, the edge applies to every dollar you put at risk.
This difference becomes important when calculating your expected losses over time.
How House Edge Is Calculated
House edge comes down to a gap between true odds and payout odds. The casino pays you less than the actual probability of winning would justify, and that difference is where their profit comes from.
Roulette provides the clearest example. When you bet on a single number in American roulette, there are 38 possible outcomes. That's the numbers 1 through 36, plus 0 and 00. Your true odds of winning are 37 to 1 against. But the casino only pays 35 to 1 when you win.
To see how this creates the house edge, imagine betting $1 on a single number for 38 spins. Statistically, you'd expect to win once and lose 37 times. You lose $37 on the losing spins and gain $35 on your single win. That's a net loss of $2 on $38 wagered, which works out to 5.26%.
| Step | Calculation |
|---|---|
| Total wagered | 38 spins × $1 = $38 |
| Losses | 37 × $1 = $37 |
| Win payout | 1 × $35 = $35 |
| Net result | $35 − $37 = −$2 |
| House edge | $2 ÷ $38 = 5.26% |
This same principle applies across all casino games. The payout structure never quite matches the true probability of each outcome. Sometimes the gap is small, like in blackjack. Sometimes it's large, like with the tie bet in baccarat.
For games with complex decision trees, calculating house edge gets harder. Blackjack involves thousands of possible hand combinations and player choices. Working out the exact house edge requires computer simulations running millions of hands. The underlying concept stays the same, though.
You're always comparing what you should win based on true odds against what the casino actually pays you.
House Edge by Game
Not all casino games are created equal when it comes to house edge. Some give the casino a significant advantage, while others are surprisingly close to even. The figures below assume optimal play where strategy is involved. If you're making suboptimal decisions, the actual edge against you will be higher.
Blackjack
Blackjack offers some of the best odds in the casino, but only if you know what you're doing. With perfect basic strategy and favorable rules, the house edge drops to around 0.5%. Without a solid strategy, most players face an edge of 2-3% or more.
Rule variations make a big difference. Fewer decks favor the player. A dealer who stands on soft 17 is better for you than one who hits. And the blackjack payout matters enormously. A 3:2 payout is standard, but many casinos now offer 6:5 tables, which adds about 1.4% to the house edge on its own.
Other factors like doubling restrictions and whether surrender is available also shift the math.
Roulette
Roulette house edge is straightforward because it depends almost entirely on how many zero pockets are on the wheel.
| Roulette Type | House Edge | Why |
|---|---|---|
| American (0 and 00) | 5.26% | Two zero pockets |
| European (single 0) | 2.70% | One zero pocket |
| French with la partage | 1.35% | Half your even-money bet returned when ball lands on zero |
If you have the choice, European or French roulette is always the smarter pick. The gameplay is identical, but your money lasts longer.
Unlike craps, the house edge in roulette is the same across nearly all bet types. An exception is the five-number bet (0, 00, 1, 2, 3) in American roulette, which carries a worse 7.89% edge.
Baccarat
Baccarat is popular with high rollers for good reason. The main bets carry some of the lowest house edges of any table game.
The banker bet has a 1.06% house edge, though casinos take a 5% commission on wins to achieve this. The player bet comes in at 1.24% with no commission. Both are solid options.
The tie bet is another story. At 14.36%, it's one of the worst wagers you can make at a casino table. The 8:1 or 9:1 payout looks tempting, but the math doesn't justify it.
Craps
Craps has the widest spread between good bets and bad bets of any table game. The core bets are reasonable, while the proposition bets in the center of the table are where the casino makes its real money.
| Bet Type | House Edge |
|---|---|
| Pass / Come | 1.41% |
| Don't Pass / Don't Come | 1.36% |
| Odds bet | 0% |
| Field bet (2:1 on 12) | 5.56% |
| Any 7 | 16.67% |
| Hard 8 / Hard 6 | 9.09% |
The odds bet deserves special attention. It's the only bet in the casino with zero house edge. The catch is that you can only place it after making a pass or come bet, so it's not truly standalone. Still, maximizing your odds bets is the best mathematical play at a craps table.
Other Table Games
- Casino War comes in around 2.88% house edge. Simple game, mediocre odds.
- Three Card Poker (ante/play) sits at roughly 3.37%.
- Caribbean Stud has a house edge of about 5.22%.
- Slots vary wildly, typically ranging from 2-10% house edge depending on the game and casino.
House Edges Compared
| Game | Bet Type | House Edge |
|---|---|---|
| Blackjack | Basic strategy (favorable rules) | 0.5% |
| Blackjack | Average player | 2-3%+ |
| Roulette (European) | All bets | 2.70% |
| Roulette (American) | All bets | 5.26% |
| Baccarat | Banker | 1.06% |
| Baccarat | Player | 1.24% |
| Baccarat | Tie | 14.36% |
| Craps | Pass/Come | 1.41% |
| Craps | Odds bet | 0% |
| Craps | Proposition bets | 2.78-16.67% |
| Three Card Poker | Ante/play | 3.37% |
| Caribbean Stud | Base game | 5.22% |
How Strategy Affects House Edge
The house edge figures you see quoted assume certain conditions. In practice, your actual edge depends on the decisions you make, the game variant you choose, and the bets you place.
Decision-Based Games
For games that involve player decisions, house edge figures assume optimal play. Most players don't achieve that.
Blackjack is the clearest example. That 0.5% house edge only applies if you're making the mathematically correct decision on every single hand. Deviations add up quickly.
Common mistakes that increase the house edge against you include the following:
- Always standing on 12-16 regardless of what the dealer shows
- Never doubling down on strong hands
- Taking insurance when the dealer shows an ace
- Playing at 6:5 blackjack tables instead of 3:2
These errors can add 1-2% or more to the house edge you're actually facing.
Basic strategy often goes against instinct. Hitting on 16 against a dealer 7 feels wrong, but it's the correct play. Standing feels safer, and sometimes it works out, but over thousands of hands you'll lose more money by standing. The math doesn't care about what feels right.
Video poker works similarly. Games like Jacks or Better can have house edges under 0.5% with optimal strategy, but that strategy involves memorizing the correct hold for every possible hand combination. Most players don't put in that work, and their actual results reflect it.
Game Variant Selection
Even within the same game category, house edge varies significantly depending on which version you play.
| Game | Variant | House Edge |
|---|---|---|
| Blackjack | 3:2 payout, dealer stands on soft 17 | ~0.5% |
| Blackjack | 6:5 payout, dealer hits on soft 17 | ~2% |
| Roulette | European (single zero) | 2.70% |
| Roulette | American (double zero) | 5.26% |
| Video Poker | 9/6 Jacks or Better | 0.46% |
| Video Poker | 8/5 Jacks or Better | 2.70% |
| Slots | High RTP games | 2-4% |
| Slots | Low RTP games | 8-10% |
The differences are substantial. Choosing 9/6 Jacks or Better over 8/5 costs you over 2% in house edge before you even sit down. Playing American roulette instead of European nearly doubles the edge against you.
These aren't decisions you make during play. They're decisions you make before you start, and they matter just as much as strategy.
Bet Selection
Some games offer a range of bets with wildly different house edges at the same table.
Craps is the most dramatic example. Pass and come bets carry a 1.41% edge, while proposition bets in the center of the table can reach 16.67%. The odds bet has zero house edge, making it the best mathematical bet in any casino. Experienced craps players stick to pass/come with maximum odds and ignore everything else.
Baccarat is simpler but still offers a choice. The banker bet at 1.06% and player bet at 1.24% are both reasonable. The tie bet at 14.36% is not. It pays 8:1 or 9:1 depending on the casino, but the true odds don't come close to justifying that payout.
Side bets in table games almost always carry higher house edges than the main game. Blackjack side bets like Perfect Pairs or 21+3 typically range from 3-10% or more. They add excitement for some players, but you're paying a premium for that entertainment.
Betting Systems
No betting system can change the house edge. This is worth stating clearly because the myth persists.
The Martingale system, where you double your bet after every loss, is the most common example. It doesn't reduce the house edge at all. It just changes how your wins and losses are distributed. You'll have more winning sessions, but the losing sessions will be larger and can quickly hit table limits or drain your bankroll. Over time, your expected loss remains exactly the same.
Other systems like the Fibonacci, Labouchere, or D'Alembert have the same fundamental problem. They rearrange when you win and lose, but they can't alter the underlying mathematics. If you're playing a game with a 5% house edge, no staking pattern turns it into a 3% game.
Why House Edge Matters More Over Time
House edge might seem like a small number, but its impact grows the longer you play. Understanding how this works helps you set realistic expectations for any casino session.
Your expected loss is calculated by multiplying the house edge by your total amount wagered. The key word there is total. This applies to every bet you make, not just your starting bankroll. If you sit down with $100 and make 200 bets at $5 each, you've wagered $1,000. The house edge applies to that full $1,000.
A concrete example shows how this adds up. Say you're playing American roulette at $10 per spin, averaging 50 spins per hour, for a four-hour session. That's $2,000 in total wagers. At a 5.26% house edge, your expected loss is $105.
The same session at a European roulette table with its 2.70% edge would cost you $54 in expected losses. Nearly half the damage, same amount of play.
| Scenario | Spins | Total Wagered | House Edge | Expected Loss |
|---|---|---|---|---|
| American roulette, 4 hours | 200 | $2,000 | 5.26% | $105 |
| European roulette, 4 hours | 200 | $2,000 | 2.70% | $54 |
| Blackjack (basic strategy), 4 hours | 300 | $3,000 | 0.5% | $15 |
In shorter sessions, variance overwhelms the edge. You might win big or lose big, and the house edge barely shows up in your results. But the more you play, the more your actual outcomes start to match the mathematical expectation. This is why choosing lower house edge games matters. The difference compounds over every bet you make.
None of this means you'll definitely lose. Players win sessions all the time. But over extended play, the math catches up with everyone.
Using House Edge to Make Better Choices
Knowing the house edge for different games helps you make smarter decisions about where to spend your time and money. All else being equal, lower house edge means better expected returns. If you enjoy both European and American roulette equally, European is objectively the better choice.
But house edge isn't everything. Game pace matters too. Faster games mean more wagers per hour, which can offset a lower house edge. A slow 2% game might cost you less than a fast 1% game if you're placing three times as many bets.
Entertainment value counts as well. You might prefer a 4% house edge game you love over a 1% game you find boring, and that's a valid choice as long as you understand the trade-off.
For table games, learn at least basic strategy for any skill-based game you play regularly. The improvement in house edge is significant, and the knowledge pays for itself over time.
One of the most practical uses of house edge information is identifying sucker bets. Some of the worst offenders across casino games include the following:
- Tie bet in baccarat (14.36%)
- Proposition bets in craps (up to 16.67%)
- Insurance in blackjack (around 7%)
- 6:5 blackjack tables (adds 1.4% vs 3:2)
- The five-number bet in American roulette (7.89%)
These bets exist because they're profitable for the casino, not because they're good for you. Knowing the house edge helps you spot and avoid them.
If you want to stretch your bankroll further, seek out the highest payout casinos and games with favorable rule variations. Small differences in house edge add up over hundreds of bets.