House Edge of casinos
The more you gamble, the more you will encounter the term ´House Edge´. That is because each casino has a House Edge. Do you as a casino player must know what house edge means? Not necessarily but it is never a bad idea to know more about the practice of casinos.
What about the House Edge of casinos
With this article we try to explain this term for our followers in simple words. In brief: the house edge is about the payout of casinos. More specific: casinos do not pay out the actual odds of winning. Don´t think immediately that casinos are cheating their players because that not an issue of this article. Casinos pay less than you expect because that is their profit! Keep reading...
The odds of winning
The winning odds mean your chances to win money with gaming. These odds vary from game to game. To illustrate this difference, we make the comparison with the roulette game.
When you bet on a single number in Roulette, you have a 1 in 38 chance of hitting your number. So the payout range is 35:1.
Comparing this to a slot game, you will achieve a result usually landing on circa 1 in 200,000. That number looks enormous but these slots tend to pay out more than 35 to 1.
For example, hitting the top prize could pay out 10,000x your original bet, which means, if you bet $10, you could win $100,000! In other words: the odds of winning a top prize on a slot game is admittedly extremely difficult but if you win, you are going to win a lot of money, depending on your bet placed.
For that reason, slots are built with specific payouts based on probability and odds. Since these machines are less likely to pay out top prizes, they are more likely to pay out smaller prizes more frequently.
This strategy has everything to do with excellent marketing: players like to often win small amounts. That makes playing exciting and makes them return regularly to try their luck. Conclusion: slot players enjoy frequent wins!
Relation with the House Edge
To all gamblers, this is the hard reality: in all gambling, you do not get paid (enough) for a win to make up your losses when you do not win! Keep this in mind! This difference is called the house edge. The basic idea of gambling is that all games are set up in such a way that, in the long run, the house will always make money from the game.
To clarify, summarize it as follows: the house edge is the percentage of money that the player can expect to lose on each bet, averaged over the long term.
The term Payback
In terms of ´Payback´, also a commonly used term in this context, understand this: the payback is the percentage of money the player can expect to get back from each bet, averaged over the long term.
The payback rate for slot games is less then 100% in almost all casinos, so it means that on average the player will lose money. There is therefore a psychological reason why casinos are more likely to describe their games in terms of the payback percentage. With the payback% they make clear what the player gets back (e.g. 96.2%) rather than what the player does not get back (e.g. 3.8%). The first one sounds much more positive!
What does a payback of 90% NOT mean?
- A 90% payback does not mean the player wins 90% of the time.
- It does not mean the player wins back 90% of what he⁄she has lost.
- It does not mean that the player gets back 90% of what he⁄she started with.
What does a payback of 90% mean?
It means that, for each bet, the player loses 10%, being the house edge.
The main reason why players often lose most of their money, even when the payback is 90%, is that they reinvest their winnings (back) in the game.
Golden rule: players who keep reinvesting their winnings will eventually lose it all! If gambling simply meant losing 10 cents on each and every $1 spin of a slot machine, no one would still play!
Gambling is based on ´uncertainty´. Sometimes you win, sometimes you lose. On average, players lose, but often they do in fact win, at least in the short term and at least a small amount of money. It is this occasional win that makes players get on playing. At that moment of excitement, the actual casino house edge is not important for them anymore!
eCOGRA helps
eCOGRA (UK) is a leading independent, internationally testing agency with several online gaming jurisdictions. It is specialised in the certification of online gaming software and systems.
We present here the Ecogra figures of some mobile casinos. The figures reflect the percentage of total player winnings to the total amount wagered by players.
• Royal Vegas casino: shows a payout % for slot games of 95.56;
• Golden Tiger Casino: shows a payout % for slot games of 95.71;
• JackpotCity Casino: shows a payout % for slot games of 95.96;
• SlotoCash casino and Silver Oak casino have no ecogra label.
House Edge in summary
The house (meaning the casino you visit) achieves its edge by paying back less than the true odds of winning. In other words: the total payouts reflect less than the true odds of winning.
In many games, the house edge is hidden, so that the player can not exactly determine the casino´s house edge.
The house edge is accomplished in different ways for different games.
The total payback percentage is usually between 90% and 97%.
