How to Understand the Online Casino House Edge and Manage Bankroll

Friday 17th April 2020

How to Understand the Online Casino House Edge and Manage Bankroll Writer April 17, 2020

Online casinos have become increasingly popular in recent years, with many people now choosing to play poker and slots as a form of entertainment. As more casual players enter the online casino realm, more people are beginners. Understanding online casinos is important for these newcomers, and perhaps knowing about house edge is the most vital starting point.

One of the main reasons why online casinos have become one of the fastest forms of recreational activity is because they are fun. These venues provide a place to play for real money online, and now even have full live casino experiences that allow players to tap into the physical casino environment.

Even if you're a beginner to the online casino world, you'll probably be familiar with the term "the house always wins". Basically, this means the casino always wins, which makes sense as these are money-making companies.

In this article you can read about the infamous house edge, what it means, and the best way to calculate it.

House Edge

While saying the casino always wins makes online casinos sound like a waste of time, that's not true at all. It is 100% possible to play at an online casino, win money, and walk away in profit. However, the house edge means the games are slightly skewed in favor of the casinos. In other words, you can win and will win, but there's slightly more chance you will lose.

For high rollers who spend a lot of money playing casino games, the risk is worth it in pursuit of a big life-changing win. However, for the casual casino visitor, it's worth keeping the house edge in mind and betting responsibly.

RTP is the Best Way to Understand the House Edge

Perhaps the easiest way to know the house edge is to look at the Return to Play (RTP) percentage of a game. Each game at a casino will have its own individual RTP. In its simplest form, the RTP shows you how much money a casino will pay back to you if you play a game long enough and trigger enough wins.

Example: Think about playing an online slot game that has a Return to Play percentage of RTP:95%. You play this game for four years and spend $10,000 during that time. According to the RTP information, the online slot will return $9,500 to you over that period. As for the remaining 5% ($5,000), well, that goes to the casino as a profit.

As you can see, in this example you will be down $5,000. However, it is important to know that RTP can only be calculated over vast sample sizes. In fact, $10,000 and four years may be too small a sample for the RTP to be accurate.

If the sample is too small, the variance is too great. For example, you could spend $10 playing an online slot, win $100 and walk away and never play the game again. In this instance, you have beaten the house edge and the casino would lose money on you. Equally, you could spend $100 and win $0, meaning the casino makes a 100% profit on your playing.

These small samples don't reflect the RTP. The easiest way to think about house edge related to RTP is to think that if you play a game long enough, the casino will eventually win. It may be tomorrow, or it may be in 10 years, but the casino will win.

Again, for casual gamers who don't spend much money, this is completely fine. Remember, online casinos are about having fun and spending within your means. And you never know, you may be one of the lucky few that breaks the house edge and makes a profit.

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