What Is House Edge?

by James Carter on February 19th 2015.

Real-money slots have a built-in advantage for the casino. This is called house edge, house advantage or hold percentage. It tells you how big of a percentage of your bet the casino wins on average. For example, if you were to bet $1 at a time with a 5% house edge (common for dollar slots), you’ll lose $0.05 out of each bet on average.

The keywords being “on average” since it takes thousands of spins until a game’s true hold percentage shows. You won’t lose that 5% on every bet; you either lose the bet (which happens more often) or get a winning combination that could be as much as a jackpot. But when you sum all the outcomes over thousands of spins, you should arrive at a figure close to 5% in a game with 5% house edge.

House Edge in Slot Machines

Slot machines have a high house edge when compared to most casino games, and although a game like Keno has a distinctly higher house edge, we lose more money at slots (suggesting similar bet sizes) because we play slot machines much faster.

One way to calculate a slot machine’s house edge is to subtract its payback percentage from 100%; the problem is, casinos rarely share payback or house edge figures for individual machines.

It’s slightly easier online, where many online casinos publish monthly payouts (see online payout comparison), however, payouts only tell you the actual return to players (which can be influenced by someone winning a jackpot, for example) so we still have no idea about a casino’s theoretical return. (eCogra-approved casinos publish payouts online.)

Slotland- a well-known no-download casino – promises a 2% house advantage while Loco Panda promises a 2.5% house advantage – these are the highest advantages that I’ve found. (Both accept USA players.)

And even if we know a casino’s overall payouts, we still have no idea about house edges for individual machines, although reading Which Slot Machines to Avoid will help you find the machines with the lowest house edge (or “highest payback”).

If you happen to find house edge percentages for individual machines online on some information-based website, be careful. In most cases online casinos can easily change the percentages – and eventually they will – therefore I don’t recommend trusting those percentages especially if they’re even a few weeks old.

Besides, in many cases an information website has pulled a casino’s payout percentage from one single (good) month, making it look like the casino has extremely high payouts, which brings in more advertising money.

Having access to payback figures on individual machines at live casinos would be extremely rare – I doubt you can find one casino in Nevada doing that. At least I’ve never seen one.

I’ve also written about blackjack house edge.

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