Understanding the Basics of the Casino House Edge
If we are to undertake the task of classifying which bets in a casino are good, fair, the best, or the worst casino bets on the floor we need to have a standard to make our decision. A couple of good criteria we can use are the odds of winning and the casino's house edge. Simply put, the odds refer to the probability or chance that a certain bet will win. Let's move on to the house edge?
One critical factor we can look at when choosing our wagers in any casino game is the casino's house edge. One good rule of thumb would be if the casino's house edge is quite high on a particular game or wager, then we ought to avoid such games or bets. The house edge or casino advantage is the money making factor that defines a casino as a business and not just a place for fun and games.
Understanding the house edge also helps us understand how the casino makes money and helps us identify which bets we are supposed to avoid. It is a mistaken notion that the casino makes money out of cheating their patrons. If that were true, then we'll have a lot of casinos closing shop and casino owners sued since casinos really make a lot of money out of its business.
To help you understand the house edge lets make a wager on a simple coin flip. The odds of winning will be fifty-fifty. You bet a dollar on heads, and win. How much do you think should you get then? Most will say a dollar. So you get another dollar making two dollars in your pocket when you win. But a casino won't pay you one dollar, you'll most likely get 95 cents out of the whole deal (losing five cents as some sort of fee for playing the game).
That boils down to a house edge of 2.5%. Here's how that is calculated: you divide the five cents you lost by 200 cents that you might have won and should be in your pocket and then multiply that by 100 to get a percentage. A good and simple definition of house edge therefore would be the average profit a casino makes from every bet that players make in any game played.
The casino continuously makes money as long as there are people playing their games. It also makes more money if people play the games and make the bets that have the really high house edge. Casinos never rely on luck to make profits, they have the house edge to work for them eventually earning loads of cash.
The smart player therefore would play the games and make the bets that have the lower house edge. They get to make more money and avoid the worst casino bets.