Figure 1 indicates the house edge (or 'house advantage,' or 'H/A') for some well known games. The house edge is commonly understood as the percentage of total initial player wagers the casino expects to earn over the long run if. The house advantage - the all-important percentage that explains how casinos make money - is also called the house edge, the theoretical win percentage, and expected win percentage. In double-zero roulette, this figure is 5.3%. In the long run the house will retain 5.3% of. The house advantage, or house edge, is the percent of a player's initial bet that the casino will expect to make in the long run. Flip it around, and it is the amount you would expect to lose. The house has an advantage in every single game – that is how casinos make their money – but not all games are created equal.
The house edge at slot machines isn't based on how lucky the players are, it is based on the pre-programmed electronic software used. And, that house edge varies from casino to casino and from geographic location and state to state.
Don't be fooled by a billboard that says 'Our slots pay 99%' because that only pertains to a small number of machines, not the casino's overall house edge. All video slot machines (including poker) use a Random Number Generator to provide accurate odds for the player and the house.
Ta-da, house edge for the casino of 5%. If you thought it should be 10%, remember, the 10¢ penalty kicks in only when you win, which is half of the flips. Casino games are all based on the same principle, paying you less than the true odds of winning.
The number of winning hands (symbols) in any program is mathematically proven before the slots hit the gaming floor, and while the odds vary for each player (because this really is gambling), overall, the anticipated house edge will eventually be achieved.
The House Edge at Slots
Each gaming jurisdiction requires all slot machines to be registered and all slot manufacturers must submit their programming and math charts to the state gaming office, such as the Nevada Gaming Control Board. While the state may only require a minimum payback of 86-percent, most video poker and slot machines pay more. The average payback in Nevada is lowest on penny slots at about 90-percent. Dollar slots and some Deuces-Wild poker machines have the highest payback at nearly 99-percent.
Of course just because a machine has a payback of 99 percent does not mean you will win back $99 for every $100 you play through the machine. That payback amount is an average. Over the course of an evening of gambling, you might lose $500 or win $5,000. That's the beauty of the gamble, right? And, the casino doesn't care either way, because they win an average of whatever their house edge is over the course of the month.
How does that 99-percent work for you? Aside from the ups and downs of jackpots and dry spells, your entertainment dollar is going to be based on how long you play. If you play a machine that takes $3 per spin and you pull the handle 10-times an hour, you are playing $3 x 10 x 60 = $1,800 in action. At 99-percent house edge, your play costs $18 an hour. Some nights you'll go home ready to kick the wall, and other nights you be singing a happy tune because you hit a jackpot and skated out with hundreds. That's gambling.
Play Within Your Means
As a general rule, the higher denomination slot machines have a greater overall payback percentage that the lower ones. That's great for those with a healthy bankroll, but you'll need to play the games that offer you the best bang for the buck. The worst thing a player can do is to play any game for more money than they can afford to lose or at a higher denomination than their bankroll will handle.
Another consideration is making sure you can qualify for any bonus screen or Royal Flush payoff. If you want to wile away the hours playing a single nickel in a machine, that's great. Enjoy. You won't win or lose much and you'll probably go home happier than most players. But your play comes with a catch!
That catch is that the house edge provided for each machine includes the big jackpots (such as a Royal Flush), and if you play below the minimum to reach the bonus screen, the house edge is much higher! You won't lose much, but you'll never win more than a couple of dollars.
The Best Option
The best option is to play the games you enjoy most, and make sure you read the Help Screen so you know how many credits it takes to qualify for at least the lowest progressive jackpot and the bonus screen (or Royal Flush at video poker). As a recreational player, your first goal is to have fun. If you only visit the casino occasionally the overall payback of the machine won't make much of a difference. If you visit regularly, make sure you join the Player's Club and play within your means!
May 13, 2014
The house edge and the hold percentage are two often confused concepts. It is important to understand the difference as well as recognize how they apply to you.
The most important number relevant to a casino gambler is the house edge. That is the built-in advantage that the casino has in any given game. Even if the player makes flawless decisions throughout, over time the house will win money anyway. The edge refers to the cards being stacked against the player before they even enter the casino.
While that number is crucial for a casino manager as well, there is another that matters even more. That figure is the hold percentage, which refers to how many of the chips purchased are returned to the casino, regardless of the inherent advantage in the game. While these two concepts are often mixed up, this piece will analyze them in detail to eliminate any confusion.
The Edge
House edge is a theoretical number made up by mathematical analysts. It assumes that the player uses flawless casino strategy and that action plays out in the long-term. That is why a player might win big money in an evening even if the edge is weighted heavily in favor of the house.
For example, lets say that you bring $100 to the casino and leave with $110. You won 10 percent of what you wagered. But the house edge calculates the casinos winnings over thousands of wagers made by thousands of people. The edge is determined by both the player's odds of winning and the amount of money which is paid out relative to the amount bet.
Many games have a low house edge precisely because the casino wants you to win occasionally. That way you will keep playing and the house slowly drains your bankroll.
Hold Percentage
Hold percentage is a more tangible concept, based not on theory but on how much money actually flows into the casino's coffers. The hold is always higher than the edge, meaning that casinos always make more money than they theoretically should in each game. Sometimes the disparity can be great, with the hold being multiples of the edge (we'll discuss some examples later).
Why? Edge assumes that player's make logical decisions. Hold doesn't. Most players are not experts in their chosen game. Many don't know what they are doing, many play intoxicated, and many are just stupid in general. Casinos count on players making poor decisions.
Edge versus hold in blackjack
Casino House Edge Percentages
In a standard blackjack game in which the player is not using a card counting system the house edge is .5 percent. This means that if you wager $1,000 on blackjack, you should theoretically leave the casino with $995. Not great for the house, because it takes them all night to get only enough money off of you to buy a burger and fries at McDonald's.
Casino House Edge Percentage
But most likely you aren't a blackjack expert. You make some mistakes, hit when you should stand, misread the dealer's upcard, foolishly buy insurance against the dealer's blackjack. So you lose more money than mathematical theory says you should. That's where the human factor comes in.
While the blackjack house edge is a paltry .5 percent, in most casinos the hold percentage is about 14 percent. Real life human beings lose a lot more than a robot programmed to play strategically flawless blackjack would, and that's how casinos make a lot of their money.
Casino's affect the blackjack edge, and by extension the average hold, buy playing with both rules and payouts. For example, some Vegas casinos have recently begun paying only 6-5, rather than 3-2, on blackjack hands. This has been shown to increase the edge by 1.39 percent. And given that most players at these tables make strategic errors, one can bet that the hold is very high as well.
Hold in Baccarat
The popular game of baccarat has made casino gambling news in Vegas and Macau casinos, with the Daily Mail reporting that in 2013 it overtook blackjack as the main source of revenue for Vegas casinos.
While the house edge in baccarat is almost nil on this game of chance, the hold percentage can be huge. Vegas casinos generally report making 11 percent of all money wagered on the game. How can the hold be huge on a game with a small house edge?
Baccarat is the game of choice for Asian high-rollers, many of whom come to Vegas and wager millions of dollars in a single night. An unlucky evening for one of these 'whales' can keep a casino operating in the black for an entire month. Casinos also charge a 5 percent commission when the banker wins a bet, which can potentially be a huge amount.
However, the gargantuan nature of baccarat betting causes major variance in the hold, as players can just as likely win huge amounts from the house in a given night. While Vegas casinos reported an average take of 11 percent on the game, some casinos reported a hold as low as 3.6 percent. Just as a huge night can pay for an entire month, it can also wipe out a month of profit.
Tags: card counting system, casino gambling news, casino strategy, hold percentage, house edge
Related posts:
Ta-da, house edge for the casino of 5%. If you thought it should be 10%, remember, the 10¢ penalty kicks in only when you win, which is half of the flips. Casino games are all based on the same principle, paying you less than the true odds of winning.
The number of winning hands (symbols) in any program is mathematically proven before the slots hit the gaming floor, and while the odds vary for each player (because this really is gambling), overall, the anticipated house edge will eventually be achieved.
The House Edge at Slots
Each gaming jurisdiction requires all slot machines to be registered and all slot manufacturers must submit their programming and math charts to the state gaming office, such as the Nevada Gaming Control Board. While the state may only require a minimum payback of 86-percent, most video poker and slot machines pay more. The average payback in Nevada is lowest on penny slots at about 90-percent. Dollar slots and some Deuces-Wild poker machines have the highest payback at nearly 99-percent.
Of course just because a machine has a payback of 99 percent does not mean you will win back $99 for every $100 you play through the machine. That payback amount is an average. Over the course of an evening of gambling, you might lose $500 or win $5,000. That's the beauty of the gamble, right? And, the casino doesn't care either way, because they win an average of whatever their house edge is over the course of the month.
How does that 99-percent work for you? Aside from the ups and downs of jackpots and dry spells, your entertainment dollar is going to be based on how long you play. If you play a machine that takes $3 per spin and you pull the handle 10-times an hour, you are playing $3 x 10 x 60 = $1,800 in action. At 99-percent house edge, your play costs $18 an hour. Some nights you'll go home ready to kick the wall, and other nights you be singing a happy tune because you hit a jackpot and skated out with hundreds. That's gambling.
Play Within Your Means
As a general rule, the higher denomination slot machines have a greater overall payback percentage that the lower ones. That's great for those with a healthy bankroll, but you'll need to play the games that offer you the best bang for the buck. The worst thing a player can do is to play any game for more money than they can afford to lose or at a higher denomination than their bankroll will handle.
Another consideration is making sure you can qualify for any bonus screen or Royal Flush payoff. If you want to wile away the hours playing a single nickel in a machine, that's great. Enjoy. You won't win or lose much and you'll probably go home happier than most players. But your play comes with a catch!
That catch is that the house edge provided for each machine includes the big jackpots (such as a Royal Flush), and if you play below the minimum to reach the bonus screen, the house edge is much higher! You won't lose much, but you'll never win more than a couple of dollars.
The Best Option
The best option is to play the games you enjoy most, and make sure you read the Help Screen so you know how many credits it takes to qualify for at least the lowest progressive jackpot and the bonus screen (or Royal Flush at video poker). As a recreational player, your first goal is to have fun. If you only visit the casino occasionally the overall payback of the machine won't make much of a difference. If you visit regularly, make sure you join the Player's Club and play within your means!
May 13, 2014
The house edge and the hold percentage are two often confused concepts. It is important to understand the difference as well as recognize how they apply to you.
The most important number relevant to a casino gambler is the house edge. That is the built-in advantage that the casino has in any given game. Even if the player makes flawless decisions throughout, over time the house will win money anyway. The edge refers to the cards being stacked against the player before they even enter the casino.
While that number is crucial for a casino manager as well, there is another that matters even more. That figure is the hold percentage, which refers to how many of the chips purchased are returned to the casino, regardless of the inherent advantage in the game. While these two concepts are often mixed up, this piece will analyze them in detail to eliminate any confusion.
The Edge
House edge is a theoretical number made up by mathematical analysts. It assumes that the player uses flawless casino strategy and that action plays out in the long-term. That is why a player might win big money in an evening even if the edge is weighted heavily in favor of the house.
For example, lets say that you bring $100 to the casino and leave with $110. You won 10 percent of what you wagered. But the house edge calculates the casinos winnings over thousands of wagers made by thousands of people. The edge is determined by both the player's odds of winning and the amount of money which is paid out relative to the amount bet.
Many games have a low house edge precisely because the casino wants you to win occasionally. That way you will keep playing and the house slowly drains your bankroll.
Hold Percentage
Hold percentage is a more tangible concept, based not on theory but on how much money actually flows into the casino's coffers. The hold is always higher than the edge, meaning that casinos always make more money than they theoretically should in each game. Sometimes the disparity can be great, with the hold being multiples of the edge (we'll discuss some examples later).
Why? Edge assumes that player's make logical decisions. Hold doesn't. Most players are not experts in their chosen game. Many don't know what they are doing, many play intoxicated, and many are just stupid in general. Casinos count on players making poor decisions.
Edge versus hold in blackjack
Casino House Edge Percentages
In a standard blackjack game in which the player is not using a card counting system the house edge is .5 percent. This means that if you wager $1,000 on blackjack, you should theoretically leave the casino with $995. Not great for the house, because it takes them all night to get only enough money off of you to buy a burger and fries at McDonald's.
Casino House Edge Percentage
But most likely you aren't a blackjack expert. You make some mistakes, hit when you should stand, misread the dealer's upcard, foolishly buy insurance against the dealer's blackjack. So you lose more money than mathematical theory says you should. That's where the human factor comes in.
While the blackjack house edge is a paltry .5 percent, in most casinos the hold percentage is about 14 percent. Real life human beings lose a lot more than a robot programmed to play strategically flawless blackjack would, and that's how casinos make a lot of their money.
Casino's affect the blackjack edge, and by extension the average hold, buy playing with both rules and payouts. For example, some Vegas casinos have recently begun paying only 6-5, rather than 3-2, on blackjack hands. This has been shown to increase the edge by 1.39 percent. And given that most players at these tables make strategic errors, one can bet that the hold is very high as well.
Hold in Baccarat
The popular game of baccarat has made casino gambling news in Vegas and Macau casinos, with the Daily Mail reporting that in 2013 it overtook blackjack as the main source of revenue for Vegas casinos.
While the house edge in baccarat is almost nil on this game of chance, the hold percentage can be huge. Vegas casinos generally report making 11 percent of all money wagered on the game. How can the hold be huge on a game with a small house edge?
Baccarat is the game of choice for Asian high-rollers, many of whom come to Vegas and wager millions of dollars in a single night. An unlucky evening for one of these 'whales' can keep a casino operating in the black for an entire month. Casinos also charge a 5 percent commission when the banker wins a bet, which can potentially be a huge amount.
However, the gargantuan nature of baccarat betting causes major variance in the hold, as players can just as likely win huge amounts from the house in a given night. While Vegas casinos reported an average take of 11 percent on the game, some casinos reported a hold as low as 3.6 percent. Just as a huge night can pay for an entire month, it can also wipe out a month of profit.
Tags: card counting system, casino gambling news, casino strategy, hold percentage, house edge
Related posts:
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