KEY TAKEAWAYS
The house edge is the average percentage of every bet that a casino keeps over the long run. On a European roulette wheel it is 2.70%, which means that for every $100 wagered, the casino expects to keep about $2.70 on average. The figure is built into the payouts of each bet, so it applies whether the next spin wins or loses for a given player.
That built-in margin is why a casino can pay large wins to lucky players and still stay profitable. Each individual result is unpredictable, but across thousands of bets the outcomes settle close to the mathematical average, and the average favors the house. Understanding this single number explains how casinos make money, why some games cost far less to play than others, and why no betting system can turn a negative-expectation bet into a positive one.
This guide explains what the house edge is, where it comes from, how to calculate it with a worked example, how it compares across common table games, and which myths are worth ignoring before sitting down at a table.
What the House Edge Means
The house edge is the casino’s long-run advantage on a bet, written as a percentage of the amount wagered. A 2% house edge means the casino keeps about $2 of every $100 bet, on average, across a very large number of bets. It does not predict what happens in a single session.
A closely related figure is return to player, usually shortened to RTP. RTP is simply 100% minus the house edge, so a game with a 2.70% house edge has an RTP of 97.30%. Both numbers describe the same fact from opposite sides: one shows what the casino keeps, the other shows what is returned to players collectively over time.
The house edge applies to house-banked games, where players bet against the casino rather than against each other, as in roulette, blackjack, baccarat and craps. Because every bet in these games has its own payout, each bet on the table has its own house edge, and two bets on the same table can cost very different amounts to place.
It also helps to separate two numbers that are often confused. The house edge is not the probability of losing. A player betting red on a European wheel wins about 48.6% of the time and loses about 51.4% of the time, yet the house edge on that bet is 2.70%. The edge measures the average cost per dollar bet once the payout is taken into account, not how often the bet wins.
Where the House Edge Comes From
The edge exists because casinos pay winning bets at less than the true odds. If a bet has a 1-in-37 chance of winning, a fair payout would be 36 to 1, meaning the player receives 36 units of profit for each unit risked. The casino pays 35 to 1 instead. That one missing unit, spread across all 37 possible outcomes, is the house edge.
The payout gap
A simple way to see the gap is the break-even point. A bet that pays X to 1 breaks even at a win probability of 1 divided by (X + 1). A bet paying 35 to 1 breaks even at 1 in 36, or about 2.78%, but the real chance of hitting a single number on a European wheel is 1 in 37, or about 2.70%. That shortfall is the edge.
Zero pockets and other built-in rules
In roulette, the gap comes from the green zero pockets, which are counted in the odds but never paid on outside bets. In blackjack, the edge comes from the rules: the player must act before the dealer, so a player who busts loses even if the dealer would have busted afterward. In craps and baccarat, it comes from payouts and commissions, such as the 5% commission on Banker wins. The effect is identical: the long-run return is below 100% on every standard house-banked bet.
How to Calculate the House Edge: A $10 Example
Suppose a player bets $10 straight up on the number 17 on a European roulette wheel, which has 37 pockets (1 to 36 plus a single zero). The bet pays 35 to 1, so a win returns $350 in profit plus the original $10 stake. The chance of winning is 1 in 37, and the chance of losing is 36 in 37.
The average result of this bet is found by weighing each outcome by its probability. A win happens 1 time in 37 and adds $350. A loss happens 36 times in 37 and costs $10. The expected result is ($350 ÷ 37) − ($360 ÷ 37) = −$10 ÷ 37, which is about −$0.27 per $10 bet. Divided by the $10 wagered, that is −2.70%, matching the known house edge of a European wheel.
Now take the same bet on an American wheel, which has 38 pockets because of the extra double-zero. The payout is still 35 to 1, but the win chance falls to 1 in 38. The average result becomes ($350 − $370) ÷ 38 = −$20 ÷ 38, or about −$0.53 per $10. That is a 5.26% house edge, roughly double the European wheel, produced by one extra pocket and no change in payout.
House Edge by Game and Bet
Because every bet has its own payout, house edges vary widely, even within one game. The table below lists common bets with their house edge and the average amount lost per $100 wagered. The figures assume the standard rules stated in each row, and real tables can differ, so the placard at the table always takes priority.
| Game and bet | House edge | Average loss per $100 wagered |
|---|---|---|
| Blackjack, basic strategy, 3:2 payout (varies by rules) | About 0.5% | About $0.50 |
| Baccarat, Banker (5% commission, 8 decks) | 1.06% | $1.06 |
| Baccarat, Player (8 decks) | 1.24% | $1.24 |
| Craps, Don’t Pass | 1.36% | $1.36 |
| Craps, Pass Line | 1.41% | $1.41 |
| European roulette, any standard bet | 2.70% | $2.70 |
| Sic Bo, Big or Small | 2.78% | $2.78 |
| American roulette, most bets | 5.26% | $5.26 |
| Baccarat, Tie (pays 8 to 1) | 14.36% | $14.36 |
| Craps, Any 7 (pays 4 to 1) | 16.67% | $16.67 |
The pattern is clear once the numbers sit side by side. Bets that pay the most for a single result tend to carry the highest edge, such as the baccarat Tie and the craps Any 7, while the main bets in blackjack, craps and baccarat sit near the bottom.
These figures describe averages over very long runs. Expected loss is roughly the total amount wagered multiplied by the house edge: $1,000 wagered at 2.70% is about $27 lost on average, while $1,000 wagered at 5.26% is about $53.
Common Myths About the House Edge
The most common misunderstanding is that a player who wins tonight has somehow beaten the house edge. A winning session is ordinary variance, the normal short-term swing around the average. The edge only describes what happens over very large numbers of bets, which is why individual players can and do walk away ahead on any given night.
A second myth is that a betting system can reduce the edge. Increasing bets after a loss, or spreading bets across several numbers, changes how results are distributed but never the average cost per dollar wagered. Each bet still carries its own negative expectation, and a series of negative-expectation bets stays negative. Systems mainly trade frequent small wins for rare, larger losses.
A third myth is that a number or color is “due” after a long streak. Every spin, roll and hand in roulette and craps is independent, so past results do not change the next probability. A wheel has no memory.
Finally, some assume all casino bets cost about the same, yet the cost per $100 wagered can differ by more than ten times between bets, so the bet matters as much as the game.
What to Check Before You Sit Down
Before placing a first bet, read the table placard and the rules posted at the table. The rules on the placard decide the house edge you are actually facing, since wheels, payouts and commissions differ between casinos. In roulette, check whether the wheel has one zero or two. In blackjack, check whether a natural pays 3 to 2 or 6 to 5. In baccarat, check whether the Tie pays 8 to 1 or 9 to 1.
Next, choose bets with the lowest edge available on the game. Even-money and similar low-cost bets spend your budget more slowly, while high-payout side bets spend it faster for the same stake.
Finally, set a budget before playing and treat it as the price of entertainment. Decide the amount in advance and stop when it is spent, rather than raising bets to recover losses. Because the edge works against the player in the long run, gambling is never a reliable way to make money. Legal age and the legality of casino gambling vary by state and venue, so confirm the local rules before playing.
What to Learn Next
With the house edge understood, the next step is to see how it shows up in specific games. Each game applies the same principle through different rules, so learning how roulette wheels, blackjack decisions, baccarat commissions and craps bets work makes the numbers in the table above easier to read.
A good path is to pick one game, learn its basic bets and payouts, and then compare its versions. In roulette, that means single-zero against double-zero wheels. In blackjack, it means seeing how a 6:5 payout raises the cost. Every one of those topics rests on the house edge, which makes it the right first concept in any casino education.
Frequently Asked Questions
