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The House Edge

The house edge is the casino's advantage and will give you the best measure of the overall game odds. The payout and win rate are both taken into account when determining the house edge. The easiest way to explain it is to show an example.

In single-zero roulette, there are 36 numbered slots on the wheel and one green slot, making 37 slots total. The green slot is what gives the casino its advantage. The payout ratio is determined using the following formula:

36/n, where n = numbers that define a win.

For example, betting on numbers 1-12 means there are 12 possible numbers that would win; n = 12. The payout is calculated by 36/12 = 3; the payout ratio is 3:1.

Next, you determine the expected return. The expected return is simply 36/37 but can be applied to each bet using the formula:

(n/37) x (payout) = average return, or (n/37) x (36/n) = average return.

As long as n is greater than 0 (remember, n = numbers that define a win), the average return is always less than 1, in this case 36/37, or 0.973. This does not change with any bet in roulette, although it can be bet-specific in casino games like craps. At some online casino sites and gambling websites you might see this worded, "We payout 97.3%!" This is in reference to the average return.

The house edge is calculated by subtracting 1 from the average return. For example, in single-zero roulette, the house edge is 1 - 0.973 = 0.027 x 100% = 2.7%. This means that for every $100 wagered in roulette, the casino will keep $2.70 on average.



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