Sunday, February 5, 2012

E-4: House Edge

House Edge is the average profit a casino makes from every bet placed.


Imagine your making a bet on the flip of a coin. The odds on winning will be 50/50. You bet a dollar on heads and win. Now you expect to get paid a dollar, but a casino wont pay you that. You'll most likely get 95 cents. Losing 5 cents to the house.

On the other hand, if it came up tails, meaning you lost, the casino will take your whole dollar.

That boils down to a house edge of 2.5%.

That's calculated by dividing the 5 cents you lost, by the 200 cents you should have won and then multiplying that by 100 to get a percentage.

Advise: Play games with a low house edge. (Blackjack, Video Poker)

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