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What is Meant by “House Edge” in Casino Play?

The term “house edge”, in reference to casinos, alludes to the fact that the casinos themselves are designed to profit from the participation of players in their games. A casino is, after all, a business, and the gaming establishments wouldn’t remain open if they weren’t able to sustain themselves somehow with the financial transactions they host. Contrary to some urban myths, however, “house edge” does not mean that an individual player will necessarily lose money in gaming. A brief look at how casinos do make their money—and how players can come out ahead—might lay that myth to rest, and put a player’s mind at ease.

Let’s take an online poker room as an example. The House (meaning the casino itself) generates income by two methods in an online poker game. First is the “rake,” or a percentage of the pot from each hand which goes directly to the House. This is generally a very low percentage, and is often capped at a maximum fee if a pot grows past a certain size. The rake is a fairly negligible amount relative to the pot of which the winning player takes possession, but it makes a positive stream of income for the house without inflicting a noticeable impact on the players. A second form of revenue for the house takes the form of entrance fees or “buy-ins” for tournaments. A skilled poker player can generally count on earning back at least the amount of the buy-in during the course of play, so this is another form of House revenue that doesn’t necessarily impact an individual player.

Worth additional note is the fact that an online casino, due to their considerably lower overhead costs, tend to take much smaller rakes, entry fees, and other expenses from the player’s potential winnings, making the online casino a significantly more lucrative place to play.

Games like blackjack actually involve a contest between each player and the House itself (as opposed to poker play, which pits the players against one another), and in this case the overall statistics favor the House to win more often than the players, providing the income stream which can support the game. Once again, however, the House’s “edge” is a matter of global statistical probability, and any individual player can bring the skill and savvy to the table to walk away with winnings.

Another form of revenue for a casino is the investment of player deposits while those monies are in the charge of the casino. In a sense, this is a win-win situation, giving the casino an opportunity to generate operating funds without any actual decrease to a player’s account or potential winnings. Try your chance at winning at Spin Palace Casino.

Perhaps the most popular form of casino play is the video slots, which is also widely available at online casinos, e.g. Spin Palace and others. A casino can pre-program the payback rates of its machines, guaranteeing that over the course of extended play, the House will earn a percentage to cover its operating costs and provide some profit. Once again, this is a matter of global probabilities, and doesn’t pre-ordain the individual outcome of any particular player’s gaming. Online casinos actually pay out at a higher percentage rate than traditional casinos, due to the reality that the online casino doesn’t have the overhead costs of a brick and mortar casino, meaning that they can afford to set the return rates higher on their slot games. Where the highest averaging Las Vegas casinos pay out at a rate no more than 95% (and many casinos’ slot machines are set at much lower pay rates) the average online slot machines run closer to 98%. This means a player will fare better at the slots even without a playing strategy, and a strategic player stands to win even more with online play. And even a game like slots, which is largely dependent on chance in the symbols that turn up with each spin, can be approached strategically to maximize the probability of payouts to the player. Making maximum bets, for example—or at least activating all the pay lines—ensures that the player doesn’t miss out on payout opportunities such as the missed opportunities that occur when a winning combination lines up in a pay line that hadn’t been activated.

At its most basic level, of course, gambling is just that—a gamble. Still, a player can go into the game knowing that the house’s “edge” is not, in fact, a guarantee that the player will lose money (as some skeptics would have them believe). At any given time, and with any given game, a player can walk away with winnings.