House Edge

The house edge, (also known as expected value) is the amount lost by players for any bet on average. For instance a player betting on a single number in American Roulette has a 1/38 probability of winning 35 times the bet amount and a 37/38 chance of losing the bet. The house edge in this case is:

• 1 x 37/38 + 35 x 1/38 = 0.0526 which gives 5.26% house edge

As regards European roulette a player betting on a single number has a 1/37 probability of winning 35 times the bet amount and a 36/37 chance of losing the bet. This gives the following house edge:

• 1 x 36/37 + 35 x 1/37 = 0.027 which gives 2.70% house edge

Normally the green sections on the roulette wheel and table are the only house edge. Any outside bet will be a loser when a single or double zero comes out. The casino however also has a house edge on inside bets since the payouts for these are set at 35 to 1 while players have a 1 in 37 chance of winning a straight bet on a single number. As an example, consider the case of a player placing straight bets of $1 each on all inside numbers on the table including any zeroes to be assured of a win. The player will be required to lay $38 while only getting back $36.

The house edge is different from the hold which is the average percentage of funds a player brings to a table and loses before he leaves and which is in fact the actual amount that the casino wins. The average hold for double zero wheels varies between 21% and 31% – which is considerably more than the 5.26% house edge.

In the past, the house would set the odds on roulette tables at 27 to 1 which means that on a $1 bet the player would win $27 and the house would keep the original $1 bet. Nowadays as per regulatory bodies and since casino odds are set by law, these odds have to be either 34 to 1 or 35 to 1 which means that the casino pays the player $34 or $35 but that the latter still retains his original bet. For transparency’s sake the Casino Control Commission in Atlantic City publishes a monthly report showing the win/hold amounts for every casino.