What is the House Edge?

What is the House Edge?

If you frequently hear about live casinos in Malaysia, you might have heard that the casino will always have the advantage over the players. That notion is actually known as the house edge.

No matter what you think about a gambling institution, at the end of the day, it is still just business. That is why most casino owners and pit bosses would always employ measures that will help entice players to keep on playing and guests keep on spending money inside the casino.

According to Bob Stupak who is a former owner of the Vegas World Casino, he said that it was his job to ensure that people spend money while inside the casino and that they should put a smile on the faces of these people when they go home.

But again, it is still just business at the end of the day and the only way for them to keep the cash flowing would be to get a percentage of everything where the money is spent inside the casino.

Upon looking at this, you might be thinking that the institution is trying to extort money from you or perhaps cheat you to pay money to them. This is not the case and I want to make things clear in this article.

Understanding the House Edge

The casinos do not have to cheat players so that the money keeps flowing into their coffers. That is because, for the vast majority of games in the casino, there is always a small percentage that is set aside for the casino. In other words, there is always a way to gain profit. This concept is known as the house edge.

You have to know that the betting system works like this. There is always a possibility of winning everything and losing everything as well. If you were to place a bet on a coin toss, your odds of winning are 50-50. This would be called an even money bet.

If you were to bet a dollar and if you win the game, you are given a dollar, then that would be known as “true odds” since you are paid the original amount that you’ve made before the start of the game.

However, if you were to place a dollar bet and the dealer only pays you 95 cents in return, then that would mean that every time you do win, the house edge (in this example) would be 2.5%.

To put it succinctly, the house edge is just the numerical difference between the true odds and the odds that the institution pays you in the event that you win a certain game.

For most of the games in the casino, the house edge is typically fixed. However, that is not the case for the game of Blackjack and Video Poker where the house edge varies depending on certain situations.

In summary, the house edge is just a way for the casino to earn revenues the “right way” and not by extortion or cheating.