You'll often hear the term "house edge" when looking at casino games but what does it really mean? The truth is that it can mean a number of things depending on the context and how it is defined.
Confusion aside, the house edge on your game of choice is important because it is an indication of how much it is probably going to cost you to play the game over a given period of time.
Let's begin with an example. Let's say you're playing Full Pay Jacks or Better Video Poker. The expected rate of return --that is how much you can expect, on average, to retain from the placement of your bet-- is about 99.5% In other words on total bets equal to $100 you can expect to lose about 50¢ in a "typical" playing session. Of course there are no "typical" playing sessions but in mathematical terms if you had one that's how it would turn out.
Ok, so what's the house edge in this game? It's whatever percentage of your money the house can expect to take based on the mathematical probabilities of the game you are playing. In our VP example it would be about 0.5% which is pretty reasonable compared to other casino games. Blackjack, Vegas style with a six deck shoe, has a house edge of about 0.8% while Keno has an infamously high house edge of around 30%.
There are a few things you should know about all these house edge numbers. First is that they assume you are playing optimally. In VP that means playing perfect basic strategy for your particular game. Ditto for Blackjack. In my opinion optimal play in Keno means leaving the area as soon as possible but that's another story.
Another thing to know about house edge numbers is that they are based on your initial bet only. In other words they do not take into account the additional money you wager via Splits, Double Downs, etc. These additional wagers would typically increase the overall house edge on that particular betting round.
So the bottom line is that the house edge for your particular game is what you can expect to pay, on average, for the privilege of playing the game assuming you:
- play perfect strategy,
- place only initial bets.
Of course this isn't a particularly realistic picture of the average player's play. In many games the subsequent bets are a basic part of the game, to forego them would be to ignore half of the game. To address this weakness in the house edge concept one needs to at the very least come up with an expected return number based on all the betting the player would typically make in the course of play. In other words total monies wagered instead of initial bets only.
As ever the man for this kind of number crunching is Mike Shackleford, aka The Wizard of Odds. On his site he offers a new take on casino games which he calls "the element of risk". As Mike puts it "the player only looking at the house edge may be indifferent between roulette and Caribbean stud poker, based only the house edge. If one wants to compare one game against another I believe it is better to look at the ratio of money lost to money wagered, which would show Caribbean stud poker to be a much better gamble than roulette."
Here is a list of some of the best online casinos we can recommend for practising your skills at for free or for playing for real money:
> Platinum Play
> 7 Sultans
> Colosseum Casino
> Desert Dollar