Dec 22, 2008

Roulette House Edge

• Roulette - The Game
• Roulette History
• Online Roulette
• Online Roulette - Softwares
• Roulette Wheel- the Number Sequence
• Roulette Betting
• Roulette Types of bets
• Inside Bets
• Outside Bets
• Roulette Payout Table (Roulette Odds)
• Roulette Table Layout
• House Edge
• Called Bets
• Roulette Strategies & Betting Tactics

The House Edge in Roulette

In the early frontier gambling saloons, the gaming establishment, or ‘house’ would have set its ‘odds’ on the gaming tables for roulette at 27 for 1. In regular, simple betting terms you got back multiples of the ‘odds’ amount and so for a $1 wager you would receive $27 and the house got to keep your original dollar stake. A $10 stake that had won would have had a return of $270 but your original $10 on the table went to the house. Things have changed and nowadays, a long time since the pioneers of the frontier, respectable and reputable casinos’ odds are regulated and legislation decrees they must be either 34 to 1 or 35 to 1 depending on whether the table is playing with 0 or 00. The same mathematical principle prevails in that the house pays you $34 or $35 but now you get to keep your original $1 bet with the longer odds game.

A Casino, like any business wants to generate a profit, through the betting infrastructure – not from gambling – unlike the player at their tables. To do this there is built into the betting infrastructure for roulette (Online Roulette)the ‘house average’ or ‘house edge’ (also called the expected value). Basically it’s their cut for providing the service. This cut or edge is the statistical amount, on average, that any player loses relative to any bet wagered at the table. If a player bets on a single number in the American game there is a probability of 1/38 that the player wins 35 times the bet, and a 37/38 chance that the player loses their bet. The expected value is:

−1×37/38 + 35×1/38 = −0.0526 (5.26% house edge)

For European roulette, a single number wins 1/37 and loses 36/37: −1×36/37 + 35×1/37 = −0.0270 (2.70% house edge)

The presence of the green squares within the compartments of the wheel and on the table are technically the only house edge. ‘Outside bets’ will always lose when the non-numbers 0 and 00 (in green) come up. Yet, the house also has an ‘edge’ over the ‘inside bets’ as the winnings paid out are agreed at 35 to 1 despite having mathematically, and literally, a 37 to 1 chance at winning a ‘straight up’ bet on any individually wagered number. For illustration purposes of the ‘house edge’ on ‘inside bets’, imagine placing a ‘straight up’ $1 stake on each of the ‘inside numbers’ from 1-36 (including 0 and 00) to assure a win.

Although you have each individual number covered you would only get back 35 times your initial stake regardless of your having spent $38 in total. Of course there has to be exceptions to the rule and the only exceptions are: when the five numbers bet (both zeros and the 1, 2 and 3) is placed, greatly increasing the house edge (7.89% on an American wheel), and the 'even money' bets in some European games where the house edge is split when a zero appears as the winning number and only half the stake is lost (En Prison and La Partage).

There is a difference between the ‘house edge’ and the ‘hold’. Like a float for a till, the ‘hold’ is the total amount of cash the dealer or croupier exchanges for chips, minus those chips removed by the players who leave the table and is the balance at the end of the session or whatever cashing up period is used in the establishment. The difference should be in favour of the house because of the agreed edge and so; it amounts to the actual "win" the casino can bank as its return for the session’s gaming. The Casino Control Commission in Atlantic City issues a monthly report giving the figures of the win/hold amounts for each casino. Usually, the win/hold average return for double zero wheels is between 21-30%, surprisingly more than 5.26%/2.70% of all players’ money because players continue to make further subsequent bets after their resulting wins or losses on portions of their total money. A player who continually bets until they run out of money will give the house 100% hold.

It is a common misconception that the green numbers are "house numbers" and therefore, that by betting on them one "gains the house edge." It is true that the house's advantage does come from their existence (a game without them would be statistically fair); however, they are neither more nor less likely to come up than any other number.

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