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The Important Gambling Numbers: Probability, Odds and House Edge
We all hear these terms thrown around to describe various aspects of casino games, but do we really know what they mean? Sure, there’s a vague understanding that comes with them, but let’s take a closer look to find out how important they really are.
The term probability refers to the likeliness of a player securing a win. For example, in European Roulette players can pick from 37 numbers, each of which has an equal chance of being called. So, if a player chooses 25, then the probability of that number being called is 1/37. The probability then goes up when you broaden your choices. Because there are 18 red spaces on a Roulette wheel, then the probability of a red number being called is 18/37.
Interchangeable with the term “Payout”, “Odds” measure how much the casino pays out to a winning player. For example, a single bet in roulette has odds of 36 to 1, which means that if a player wagers $1 on 25, then they will win $35 (plus their $1 wager) if that number is called.
House edge is a long-term measure of the amount of money a casino expects to make from a player’s wager. To calculate it, you subtract the theoretical payment from the payout that the casino claims to provide. You then multiply this by the probability of your bet, and then multiply it again by 100%. To illustrate how this is calculated, we’ll look at Roulette again. We’ve establish that the payout is 35:1 and the probability is 1/36, therefore the house edge would be calculated with this equation:
[(36/1) – (35/1)] x 1/37 x 100 = 2.7%
Most online casinos will state the house edge for certain games, but this equation comes in handy if you think you’re being deceived.