What Is House Edge and RTP? | May 2024
It is very difficult to discuss risk and probability in casino games without first discussing their house edge or "Return To Player" (RTP) characteristics. It's important to note that these numbers are the absolute bottom floors for the game in question.
If we say a particular black game with certain rule sets returns .44%, we mean that with absolute perfect play and no mistakes over tens, if not hundreds of thousands of hands, you should lose only that amount of every dollar wagered.
The same is true of video poker and even, in many instances, on a slot machine too. In video poker, you must again play every hand correctly. In slots, you will need to make sure you play the optimal number of playlines to activate all jackpots, or the RTP of that machine may be different than that advertised.
Even in games like roulette, where there are no decisions to make or top jackpots to activate, you need to pay attention to every payoff. This is in order to make sure you aren't underpaid to reach the 5.26% house advantage that the double zero wheel has as a house edge.
HOUSE EDGE STATISTICS
| Casino Game | House Edge Percentage |
| Slots | 1% to 15% |
| Blackjack | 0.27% and higher |
| Video Poker | -.4% to 7% |
| Craps | .02% to 16.7% |
| Baccarat | 1.06% on banker bets to 9.5% on tie bets |
| Double Zero Roulette | 5.26% |
| Single Zero Roulette | 2.7% |
| Pai Gow Poker | 1.81% to 2.72% |
| Three Card Poker | 3.27% on ante to 7.28% on pair plus |
| Mississippi Stud | 4.91% |
| Sports Moneyline Bet | 4.55% |
THE HOUSE EDGE IN GAMBLING EXPLAINED
Casino games mostly get their house edge due to either the rules of the game or by underpaying the true odds of some event happening in that casino game.
Slots, for the most part, have their house edge built into the software code that determines the probability of something happening on the slot machine.
HOW TO CALCULATE THE HOUSE EDGE
Most house edge comes from the simple fact that the casino isn't paying you true odds. In some cases, this is simple to see.
For instance, in dice, we know that the odds of rolling a six on one dice is 1/6. Then, rolling two 6's on a pair of dice, the odds are 1/36. (1/6 x 1/6).
Yet you will plainly see on the dice layout that the casino will only pay you 30 to one for a twelve on a single roll bet—a house edge of 13.69%.
EXAMPLES OF HOUSE EDGE
The house edge on casino games can be variable.
Many slot machines have a house edge of 5% to 10%, and some video poker games have a house edge of .5% to 1%.
Blackjack can have a house edge of around .3% to .5%, while Baccarat has a house edge of between 1% and 1.5%.
THE MEANING OF RTP IN GAMBLING
Return To Player is the average amount of money that will come back to the player minus the house edge on their wagers over many, many hands.
To get into the long-term average, we are talking hundreds of thousands if not millions. However, over time, our results will converge on this RTP number.
HOW TO CALCULATE RTP
RTP is just the flip side of the house edge. If we break down the house edge either from short-paying true odds or the rules of the given game and, in the case of slots, the house edge built into the Random Number generators and software code, we have the house edge.
If the house keeps that, then what is left is Return to Player. Since this is in a percentage of total bets, 100% - House Edge% = RTP%
EXAMPLES OF RTP
Some penny slots on cruise ships or in regional markets without competition can run as low as 80% RTP, which is quite alarming.
Compare that with a Craps player who only bets the pass line with full odds on a table that allow 10x odds. Their RTP is 99.8%, which is remarkably better.
RTP and House Edge refer to the same numbering in a sense; whether you gauge it by how much the casino keeps or how much you win back, the numbers are a representation of how much it will cost to play a particular game for a certain period of spins.
POPULAR CASINO GAMES WITH HOUSE EDGE OR RTP
House edge has little impact on whether a casino game is popular or not. The pass line with full odds has one of the lowest house edges available, yet people seldom bet full odds.
Instead, they splash money on much lower house edge bets on the table, like the place bet on the four and ten or the hard ways bets.
Slots are the most popular game in American casinos, yet they have some of the worst RTPs of any game.
We will take a minute to talk about the RTP and the casino's advantage on some of the more popular games, both in casinos in Las Vegas and at the BetMGM online casino.
SLOTS
Slots require a bit more work and sometimes a quick guess when we attempt to discover their RTP. Sometimes, Google can be our friend and will help narrow down the RTP of a particular slot.
Another good rule of thumb is location, location, location. If you are playing a slot in the back of a bar in New Orleans, it's pretty likely the RTP is going to be very low. Cruise ships are notorious for having lower RTP slots. The lower the denomination generally, the lower the RTP.
Slots can have RTPs of 80% up to 98%, so there is a tremendous amount of variance, but we want to do everything we can to find slots around the 95% range.
If it's much lower than that, your hourly loss rate is just a disaster. Once you know what it is costing you to play some of those slots on average at those lower RTPs, it becomes very hard to enjoy them.
BLACKJACK
Blackjack, in general, has a very low house edge. But more than most of the other casino games listed here, the house edges can change depending on many factors, including slight house rule changes, the number of decks, and even the number of decks cut off the back. And because the house edge is so slight, to begin with, these small changes can have an outsized effect.
Take a double-deck blackjack game with a liberal rule set of dealer stands on all 17s, and the player may double any first two cards. The house edge is .25% with a cut card. But if we change the rules to dealer hits soft 17 and double on ten and eleven, only the casino house edge shoots to .7%.
This still sounds very low, but remember you will now lose almost three times more quickly than you would have with the original house rules.
CRAPS
For just one casino game, house edge is all over the place on the craps table. We have high house edge one roll bets like any seven or any craps that are 16.67% and 11.11% against you.
But you can take the pass or come bets with full odds on a table that lets you have 5x odds, and you have an RTP of 99.7%. Placing the six and eight has an RTP of 98.48%.
The takeaway is that you can change your "luck" here by closely evaluating your bets and keeping them below 2% house advantage. This will increase your likelihood of winning some sessions dramatically.
ROULETTE
It is almost impossible to find anything other than a double zero "American" roulette wheel in a land-based casino in the US. And that is unfortunate because the Single Zero "Europen" roulette wheel has only half the house advantage.
The American wheel has a 5.26% house edge, while the single zero wheel only has a 2.7% house edge. It's easy to understand why, since both wheels pay the exact same, there is just an extra green zero on the double zero wheels, which means that the odds of hitting a single number are 1/38 instead of 1/37. Or, that the odds of black rolling are 18/38 instead of 18 out of 37.
KENO
There is a reason why traditional Keno has become hard to find at brick-and-mortar casinos. Reliable gambling statisticians conducted a survey in Laughlin in 2012, showing that the average house edge was 25% to 50%.
Video Keno, which is played on devices resembling video poker, generally runs from 80% to 95% RTP, which is much, much better for the player but still pretty bad.
Keno at online casinos has made a comeback as they can offer some better RTP, around 95% to 97%, due to lower overhead.
VIDEO POKER
Like blackjack, where even small rule changes can significantly impact the casino house edge, video poker is adversely impacted by even slight rule changes to the pay table.
The most common video poker game is Jacks or Better because you simply need jacks or better before getting paid. A so-called full-pay Jacks Or Better video poker game, which pays 9x on the full house and 6x on the flush, has an RTP of 99.56%.
The so-called 8/5 Jacks Or Better that pays 8x on the full house and 5x on the flush only has an RTP of 97.3%. You were only giving up .44 cents of every dollar wagered; now you are giving up 2.7 cents of every buck you put in—more than five times more money than you had been losing.
RTP AND SLOTS
The RTP of a given slot game will be much more important than any other game due to the number of spins. Remember, the RTP is a total of all the wagered bets.
In roulette, you might see forty spins an hour. A game like Pai Gow or Ultimate Texa Hold'em will be even less than that.
But in Slots, the spins come quickly. You will likely hit that button more than 600 times every hour. A 1% difference in RTP on a $2 average bet with that number of spins is about $12 an hour less in your pockets. And about $60 if you play a five-hour session.
HOW TO USE HOUSE EDGE AND RTP TO YOUR BENEFIT
The lower the house edge means it's more likely you can book a winning session. The longer that you can play, in the long run, then means more play time, more comps, and free play. We should gravitate to slots and table games that offer us the best chance to win.
We can discern the House Edge or RTP numbers with a quick Google search. Or, in some online casinos the RTP is right on the info page.
Even within games there are rule sets and paytable tweaks that can change the house edge, so it's very important to know what to look for, as well as what might make one casino game better than another game that looks and seems very similar.
For instance: French Roulette offers up the La Partage rule, but even though the games look similar to European Roulette, the house edge on outside bets is only 1.35% instead of 2.7%
GAMBLING STRATEGIES
We must play every game with the correct strategy to get down to the often terrible house advantage.
If you are playing video poker with only one coin in or splitting tens in Blackjack, your house edge is much worse than the one stated. A strategy chart or other way of playing your hand correctly is essential.
But that shouldn't be confused with a gambling strategy that depends on changing your bet to more consistently book winners. Neither the roulette ball nor the dice have memories. Doubling after every loss, such as in the Martingale strategy, is just a guide to the poor house.
If you see nine black numbers roll consecutively on the Roulette wheel, the odds are no different on the next spin of black spinning again. And the "bet the tie bet after a tie" refrain in Baccarat was probably coined by the house.
KNOW THE ODDS
Some people simply shrug at casino slot RTP because they think they can't discover it. That it is an unknown. And maybe ten years ago, that was true, but now we can google an individual slot, and if we do not get an exact RTP, we can get a pretty narrow range.
The same is true of other casino games; we can easily find the casino house edge for certain paytables on, say, Ultimate Texas Hold'em, or even some weird side bets that we haven't seen before on a Baccarat game. Heck, more often than not, we can even find the proper betting strategies for these games.
When it comes to casino gambling, information is power.
LEARN THE PAYOUT RATES
Small changes in payout tables or house rules can have an outsized impact on our RTP.
While a one or two-percent difference may not sound like much, it can be a factor of five times or more depending on how quickly we run through our bankroll.
Ensure you know each game's rules and how they impact the casino's mathematical advantage. Play games that offer the best rule set or pay table.
CASINO GAME VOLATILITY
Volatility is a term that you will most often hear in relation to whether a slot has a lot of small winners that occur more frequently, which is considered low volatility, or one that consolidates most of its payouts in much larger wins that occur much less frequently.
In classic slots, a game like Blood Suckers is considered low volatility, while something like 88 Fortunes is looked at as much higher volatility. Of course, most progressive jackpot slots you come across will also have higher volatility.
You can even see volatility on different bets on the same game. If you play roulette but only bet the individual numbers, you will get 35 to one when you win.
On the other hand, if you bet the outside numbers, you get paid even money and will win almost 50% of the time.
Both bets have the same house edge, but the inside bets have high volatility, and the outside bets have lower volatility.
CHOOSE YOUR BEST GAMES
We hope we don't need to point out the need to keep your game choices to those with higher RTP.
That being said, the odds are still against you at the end of the day, so choose something you enjoy, but try to keep it at the higher end of the RTP scale.
Also, whether you are playing slots or chucking money on player bets or baker bets in Baccarat, be aware of the volatility.
You may see many spins go by on slots without a win, while your odds on a winning baccarat bet are never very far from 50/50. This can make a difference in your enjoyment and the type of game you prefer to play.
Some people like to win frequently to keep them interested; others prefer the dopamine rush of a big payout to jolt them back into it.
PRACTICE MAKES PERFECT
Because so much of getting the lowest house edge possible comes from understanding the particular game or slot machine, it is essential to practice either in demo mode for free at online casinos when possible.
While you must currently be in Michigan, Connecticut, Rhode Island, Delaware, West Virginia, Pennsylvania, or New Jersey to play online casino games legally, most online operators will allow you to play these games in demo mode from whatever state you are in.
You should practice playing these slot games to ensure you understand how many pay lines you need to activate which features, or you can practice your blackjack to ensure you are playing perfectly.
You can also play other table games to ensure you understand and know how to play them, as well as how rule changes affect them.
HOUSE EDGE, RTP, AND RESPONSIBLE GAMBLING
Responsible gaming always starts with RTP and House Edge.
If you are playing slots in a bar or deli and they only pay back 80% or 85%, you will go through your bankroll too quickly and be tempted to break your rules and play more.
If you are in Atlantic City on a Saturday and the Crap tables are all at $25 minimums, you are going to be putting out $100's of dollars a roll just to cover all your numbers. This puts our overall wagers too high, even for the smaller house edge on dice, and again, we have gone through our bankroll too quickly for that gambling session.
First, we find a table game or a slot with a lower house edge/higher RTP.
Then, we make sure that we play the basic strategy perfectly, either by using a strategy chart or practicing beforehand.
PROPERLY MANAGE YOUR BANKROLL
Next, we make sure that we have correctly thought through our bankroll, both in terms of what we can afford and the likely minimums, as well as how long we would like to play.
A bankroll of $100 on a $25 roulette game is unrealistic. If we only have $100 to play, we may need to stick with the online casino, where we can often find even the most popular casino games for only a $1 minimum.
RESPONSIBLE GAMBLING TOOLS
We need to use the responsible gambling tools they provide when we play at online casinos.
You can always set up daily, weekly, and monthly loss limits on your account (and you should) long before you make your first bet.
You can also set up time limits, where you can only play a certain number of hours, or exclusion limits, where you won't be allowed to play for a certain time period if you request.
All of these tools can help make sure your money is safe and that you gamble responsibly.
OUR FINAL TIPS FOR HOUSE EDGE AND RTP WHILE BETTING
Gambling is entertainment, but we must keep a close eye on its value proposition.
If we prefer to gamble with an expected theoretical loss of just a few dollars per hour, we can figure that out using RTP or the House Edge. We take our average bet times the number of bets placed in an hour, then multiply that by the house edge.
That will tell us how much we can expect to lose on average per hour. By choosing either lower-house edge games or smaller minimum bets, we can see the expected value of our gambling entertainment.
This can help us set up more reliable session bankrolls and pick games that more closely align with our financial conditions.
FAQS ABOUT HOUSE EDGE AND RTP
If you still have questions about house edges on different games, how RTP relates to House Edge, or even how to find the best online slots, we have the answers in these frequently asked questions.
WHAT IS HOUSE EDGE IN GAMBLING?
House edge just refers to the mathematically built-in advantage that the house has on casino games. Slot games tend to have a higher house edge, while casino table games often have a lower built-in casino advantage.
Many online casinos have a lower house edge. They offer casino games with more liberal rules or slot games with less house advantage because they don't have the overhead that brick-and-mortar casinos do.
WHAT DOES RTP MEAN?
RTP is short for Return To Player. It refers to the average amount of money returned to the player over many hands or spins. It is figured in percentages of all wagers.
So, if you placed 100 bets at $5 each on the roulette wheel, you would have $500 in wagers. The RTP on roulette is 94.74%, so you would expect to get back $473.70.
Since it indicates how much money the player will get back, it only stands to reason that the house edge is the flip side of that percentage. That what isn't returned is what the house wins.
In this case, the house edge on roulette is 5.26%. So, 5.26% to the casino and 94.74% to the player equals 100% of the money wagered.
WHAT IS THE HOUSE EDGE STRATEGY?
The house edge is based on your playing each hand perfectly and everything being optimal. All the pay lines are activated, and there are no short pays.
Once all of that is accounted for, the math lays out how you should play, which is the house edge strategy. This means that playing exactly this way will result in the house edge that you see published.
WHAT CASINO GAMES HAVE THE LOWEST HOUSE EDGE?
Not so long ago, you could find multiple video poker games that were RTP-positive if they were played precisely according to the basic strategy charts. They are a bit harder to find now, but there are still some out there.
Craps, when offered with 100 times odds, has a house edge of only .02%. While this is also not seen as much as it once was, ten times odds still has a house edge of only .2% and can be found all across the Midwest.
Of course, anyone who has seen the movie 21 knows that the blackjack game can be beaten. Its average house edge is around .3% to .5% percent, depending on the rule set. Because the composition of the cards in the shoe changes as the cards are dealt out, you can track the remaining cards and bet higher when they are in your favor, giving the player an advantage of around 1%.
IS 80% RTP GOOD?
Let's take a quick example. The average slot player plays almost 600 spins in an hour. With just $1 wagered, we have gambled $600 spins in that hour. With an RTP of 80%, we expect to get back $480. This means we are losing $120 every hour on average. I wouldn't call that a good RTP.
HOW DO I GET A GOOD RTP?
Choose a game with a low house edge; the lower the house edge, the higher the RTP. Play exactly according to the basic strategy for that game and that rule set. If you are playing slots or video poker, make sure you have enough coins bet to trigger the top jackpots. Make sure that the dealer doesn't mispay you. And always stick to your bankroll.