House Edge Calculator
Understanding the house edge is fundamental to comprehending how casinos operate and why they consistently profit over time. This calculator helps you understand the mathematical advantage casinos hold in various games and calculate your expected losses based on your wagering patterns.
The house edge represents the average percentage of each bet that the casino expects to keep over the long run. For example, a 5% house edge means that for every $100 wagered, the casino expects to profit $5 while returning $95 to players. Individual sessions may vary dramatically, but over thousands or millions of bets, the mathematics becomes remarkably predictable.
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What Is House Edge?
The house edge is the mathematical advantage that gambling establishments have over players in every casino game. It's expressed as a percentage of the player's original bet that the casino expects to keep over time. This statistical advantage ensures that casinos remain profitable businesses while still allowing individual players to win in the short term.
According to research published by the University of Nevada, Las Vegas Center for Gaming Research, the house edge is built into every casino game through carefully designed rules and payout structures. Understanding this concept is crucial for anyone studying gambling mathematics or considering wagering activities.
House Edge by Game Type
| Game | House Edge | Notes |
|---|---|---|
| Blackjack (Basic Strategy) | 0.5% | Lowest edge with optimal play |
| Baccarat (Banker) | 1.06% | After 5% commission |
| Baccarat (Player) | 1.24% | No commission |
| Craps (Pass/Don't Pass) | 1.41% / 1.36% | Best bets on the table |
| European Roulette | 2.7% | Single zero wheel |
| American Roulette | 5.26% | Double zero wheel |
| Slot Machines | 2% - 15% | Varies widely by machine |
| Keno | 25% - 40% | One of the highest edges |
The American Gaming Association tracks casino game statistics and notes that house edge percentages are standardized across most legitimate gambling jurisdictions to ensure fair play within the established mathematical parameters.
How House Edge Works: The Mathematics
The house edge operates through the relationship between true odds and payout odds. In American roulette, for instance, the probability of hitting a single number is 1 in 38 (because there are 38 numbers including 0 and 00), but the casino pays only 35 to 1. This discrepancy between true odds (37 to 1) and payout odds (35 to 1) creates the house advantage.
Mathematical Example: American Roulette
True odds of winning: 1 in 38 (2.63%)
Payout odds: 35 to 1
Calculation: If you bet $1 on a number 38 times:
- You'll spend $38 total
- You'll win once, receiving $36 ($35 profit + $1 original bet)
- Net loss: $38 - $36 = $2
- House edge: $2 / $38 = 5.26%
The mathematics of house edge is well-documented in gambling research. The National Council on Problem Gambling emphasizes that understanding these mathematical realities is essential for informed decision-making about gambling activities.
Why House Edge Matters
Understanding house edge is critical for several reasons. First, it provides realistic expectations about gambling outcomes. No betting system or strategy can overcome the mathematical advantage built into casino games. Second, it helps you make informed decisions about which games offer better odds. Third, it illustrates why gambling should never be viewed as a viable income source.
At Kangwon Land, South Korea's only legal casino for Korean citizens, all games operate with standard house edge percentages that comply with international gaming regulations. Understanding these odds helps explain why the casino generated over $950 million in revenue in 2024—the mathematics guarantee profitability over millions of wagers.
Variance vs. House Edge
While the house edge determines long-term expected outcomes, short-term results are governed by variance (also called volatility). High-variance games like slots can produce significant wins or losses in brief periods, while low-variance games like baccarat tend to produce more consistent, predictable results.
This variance is why some players experience substantial wins despite the house edge. However, as the number of bets increases, actual results converge toward the mathematical expectation. The Stanford Encyclopedia of Philosophy's entry on probability explains this concept as the Law of Large Numbers—a fundamental principle in probability theory.
Connection to South Korean Gambling Law
South Korea's restrictive gambling laws, detailed in our legal framework section, partly stem from concerns about the mathematical certainty of player losses. The government recognizes that house edge ensures players lose money over time, contributing to gambling addiction and financial hardship.
The prohibition of most gambling activities for Korean citizens reflects an understanding that these games are designed to extract money from participants systematically. Even at Kangwon Land, where gambling is legal for Koreans, the house edge remains, guaranteeing the casino's profitability while players collectively lose.
Responsible Gambling and Expected Loss
Using this calculator to understand expected losses is a form of responsible gambling education. If you know that playing slots with a 10% house edge at $50 per spin for 4 hours (approximately 2,400 spins) will cost you an average of $12,000 in expected losses, you can make an informed decision about whether that entertainment is worth the cost.
For individuals struggling with gambling problems or seeking help, our responsible gambling resources page provides information about support organizations and treatment options. If you're concerned about your gambling behavior, our Problem Gambling Self-Assessment Tool offers a confidential screening. Understanding the mathematical inevitability of losses can be a powerful tool in recognizing problematic gambling behaviors.
Important Reminder
This calculator provides educational information about gambling mathematics. It should not be used to develop betting strategies or systems, as no strategy can overcome the mathematical house edge. All forms of gambling carry risk of financial loss. If you or someone you know has a gambling problem, seek professional help immediately.
Educational Purpose
This tool is provided solely for educational purposes to help individuals understand the mathematical principles underlying casino games. It is not intended to promote gambling activities or suggest that gambling is a wise financial decision. The calculations demonstrate why gambling establishments are profitable businesses and why players should expect to lose money over time.
For more information about gambling in South Korea, including legal restrictions, enforcement actions, and cultural context, explore our comprehensive collection of articles on the homepage. You can also use our Risk of Ruin Calculator to understand the probability of losing your entire bankroll based on these house edge figures, try our Session Simulator to visualize how gambling sessions unfold, use our Bet Comparator to compare different bets side-by-side, plan responsible entertainment spending with our Budget Calculator, explore our Fallacy Analyzer to understand the cognitive biases that lead gamblers to make irrational decisions despite these mathematical realities, use our Payout Analyzer to see how casinos profit by paying less than true odds, explore our Streak Calculator to understand why winning and losing streaks are mathematically inevitable, test whether betting systems can overcome house edge with our Betting System Analyzer, take our Knowledge Quiz to test your understanding of gambling mathematics and probability, use our Time Calculator to estimate how long your bankroll will last at different games, explore our Win Rate Calculator to see the impossible win rates required to actually profit at gambling, use our Variance Calculator to understand why short-term results can differ dramatically from expected outcomes, try our Kelly Criterion Calculator to see why optimal bet sizing formulas return zero for casino games, use our Entertainment Cost Calculator to compare gambling costs with other leisure activities like movies, concerts, and dining, use our Compound Loss Calculator to see how gambling losses accumulate over years and decades, use our Wagering Requirement Calculator to understand the true cost of casino bonuses after playthrough requirements, or plan a complete casino trip with our Visit Loss Calculator to see expected costs across multiple games during a single visit.