What is House Advantage?
- Roulette Odds & House Advantage Everyone knows roulette and the basics of the game. While there are several types of bets, the general premise is that you bet on a number, the ball spins round the wheel and if it lands on your number, you win.
- With roulette the house edge goes up or down depending on the style of game you're playing. American roulette typically offers players the worst returns over time, while a lower house edge can be.
- HOME Roulette Guide Understanding the Roulette House Edge The house edge (also known as house take, or house advantage) is the major source of income for casinos. In fact, establishments such as these have predetermined payout odds for every table game they offer in order to profit from each bet placed by their visitors.
- A house advantage in roulette or in any casino game (also known as house edge, house average or expected value) is the difference between the player's true odds and the payouts for the bets he/she wins. For instance, if a player has placed a bet on one number in American roulette.
The term 'house advantage' refers to the mathematical edge maintained by gambling operators that ensures the house will always end up making money. The house advantage in games, usually given as a percentage, can range from fairly small (less than 1% for blackjack players using basic strategy) to quite large (about 25% for some blackjack side bets). These numbers represent the average amount of all their wagers that players will lose over the long term. Remember, in gambling almost anything can happen in the short term. Concepts like house advantage and Return to Player are always calculated over the long term.
The house average or house edge or house advantage (also called the expected value) is the amount the player loses relative for any bet made, on average. 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 his bet.
How is House Advantage Achieved?
Most people realize that the house has an advantage on all games it offers, but how the house achieves that advantage is often not well understood by players. The house achieves its advantage in a few different ways.
Rules of the Game: Every form of gambling has rules that define everything about that game, including how the game is played, what equipment is used and when betting occurs. In effect, the rules are the game. The rules can also help create a house advantage. For example, there is a rule in blackjack stating that if both the player and the dealer 'bust,' the player still loses.
True odds vs. payoff odds: House advantage is often achieved by setting payoff odds lower than the true odds of winning. Roulette is a good example of this. In Manitoba, roulette wheels have 37 numbered slots (1 to 36 and 0), so the true odds of picking the correct number with a single bet are 36 to 1 (36 loses for every one win). However, the payoff odds for picking the correct number are 35 to 1, just slightly less than the true odds. This difference between the true odds and the payoff odds results in a house advantage of 2.7% – over time, players will lose an average of 2.7% of all the money they wager.
* Note: American roulette wheels have 38 slots: numbers 1 to 36, 0 and 00
Other common games in which the payoff odds are set lower than the true odds include mini-baccarat, blackjack, Pai Gow poker, let it ride, three card poker and Caribbean poker.
Note: It is the total amount wagered that is exposed to the house advantage, not just the amount of money brought to the gambling game initially. Many gamblers continually re-wager winnings, chips or credits, thereby increasing their total amount wagered and increasing the amount of money exposed to the house advantage.
House Advantage in Slots and VLTs
By far the most common form of gambling in casinos is slot machines. Slots and VLTs are another form of gambling where the overall payoff odds are set lower than the true odds. The term gambling operators often use when referring to house advantage on slots and VLTs is a theoretical hold.
Theoretical Hold: The reason the hold is called 'theoretical' is that it's based on long term statistical probabilities. The results of each and every play are random and independent of any other play; however, over the long term the overall results will drift toward the expected or theoretical hold. Check out the section on Short Term Volatility vs Long Term Predictability to learn more about how this works.
What Does All This Mean to the
Average Gambler?
Anyone who gambles can expect to experience some wins that will occur unpredictably and at random. Of course, in between those wins are losses. Your net results will fluctuate up and down (see graph below), but the overall trend is likely to be downward.
A Sample of 50 Hours of Video Poker
- The red line is the player's results: the line goes up for a win and down for a loss.
- The sloping blue line shows the theoretical hold over time (the average expected results).
Note that at some points the player was below average and at other times above the average.
- The horizontal line across the top is the break even point where the player is neither ahead nor behind.
- The large spike near the middle of the graph is a royal flush payout.
The graph above illustrates several important concepts in gambling. First, the jagged downward line indicates what happens to a player's money. At a glance, it's quite clear that the overall trend is downward. The house advantage that exists in almost all forms of gambling ensures that gamblers will tend to lose money over time. The downward slope of the line will vary with the size of the house advantage.
The second thing you might notice is the choppy nature of the line as it falls downward. The periodic upward spikes (some small, some larger) represent the wins the player has experienced. Of course, the downward spikes represent the losses. The losses almost always outweigh the wins, so the line gradually slopes downward.
The graph also illustrates the concept of variable ratio reinforcement, which in gambling means that wins occur unpredictably. Some gamblers tend to remember their wins and discount their losses – we call this tendency selective recall. To learn more about this and other ways that psychology can play a role in gambling, read our section looking at the Gambling Psychology 101.
To see more examples of the results of long term play, try our video poker simulator.
You can see from the graph that in the short term, wins are always possible; however, over the long term, it becomes more and more likely that the losses will outweigh the wins.
See our Cost of Play Chart for a detailed list of the house advantage in games offered in Manitoba.
Roulette is, for most purposes, a completely random game. Its results hinge on a small ball bouncing around a spinning wheel.
This being the case, roulette doesn't offer you a realistic chance to make profits. It does, however, feature openings for profits in rare cases.
Researchers have actually found that you can gain up to an 18% advantage with roulette! But how is this the case?
I'm going to cover more on their studies and how real money roulette can be so profitable. But first, I'll discuss what your normal odds are of beating roulette.
Roulette Gives Casinos a Healthy House Edge
Roulette Comes in Three Main Forms
- American roulette – 5.26% house edge
- European roulette – 2.70% house edge
- French roulette – 1.35% house edge
You can see that American roulette is the worst game among the bunch. It features two pockets (zero, double zero) that favor the house.
European roulette provides the middle ground here. It only offers one pocket (zero) that favors casinos on all bets.
French roulette, which takes place on a European wheel, should be your game of choice. Its la partage rule pays half back on losing even-money bets that land on zero.
The problem with French roulette, though, is that it's not available in most settings. Casinos don't like providing a low 1.35% house advantage through an unskilled game.
Therefore, you'll be dealing with either the American or European versions in most cases. European roulette gives casinos a solid 2.70% advantage, while the American wheel features a terrible 5.26% house edge.
Study Shows That Players Can Gain a Big House Edge
Few casino games offer opportunities for you to win long-term profits. Roulette isn't typically one of the games that provides a chance for you to win consistently.
However, a pair of researchers figured out a way to gain an 18% edge over the casino. Michael Small (University of Western Australia) and Chi Kong Tse (Hong Kong Polytechnic University) smashed roulette odds and published their impressive results afterward.
They were able to determine the rate at which the ball and wheel were spinning. The duo used this knowledge to make accurate guesses on where the ball would land on the wheel.
'Knowing the initial conditions allows you to beat the odds,' Small said. 'In some cases you can beat them quite significantly.'
How Did Small and Tse Crush Roulette?
The researchers applied their research to a European roulette wheel. They used calculations and a clicker device to turn the 2.70% house edge into an 18% advantage for themselves.
But how did they accomplish this nearly unfathomable feat? First off, they looked at the problem of beating casinos purely from a physics standpoint.
Tse and Small studied the velocity of the dealer's release and wheel spin, the precise location of the dealer's release point, and how friction slows the ball.
These aspects form a complex puzzle that can't be solved by the human eye. However, learning each of the conditions was crucial to the team's mission.
They placed a digital camera above the roulette wheel to monitor the conditions and obtain data. By using the camera's technology and data, they were able to more accurately predict where the ball ended up.
As noted in their paper, Predicting the Outcome of Roulette, the team used the digital camera to get measurements of the wheel/ball conditions. They ran 700 'trials' to test their model on predicting where the ball would land.
Feasibility of Using Technology to Beat Roulette
Small and Tse are far from the first people to apply technology to this popular casino game. A group of physics postgraduate students known as the 'Eudaemons' were the first-known group to do so.
They entered Las Vegas casinos with computers concealed in their shoes in the 1970s. The group won a modest $10,000 and quit after being satisfied that their project indeed worked.
Of course, using such electronic devices to beat casinos is illegal everywhere now. But Nevada had no such laws against the matter back then.
Unfortunately, the Eudaemons didn't publish their research. Few details are known on their exact methods as a result.
Tse and Small merely expanded on a concept that was first developed by the Eudaemons. However, they've actually offered extensive materials on how they accomplished their goal.
One thing that the duo refrained from doing, though: using their camera to beat casinos!
Their research was conducted on a roulette wheel housed in a lab. Small and Tse would've assuredly ended up in jail had they used technology in a real casino setting.
The major difference is that these players were looking for pure profits. London police arrested the gamblers for cheating.
They went free and kept their £1.3 million afterward. London didn't have any laws against using devices to beat roulette at that point.
However, times have changed greatly. Every major gambling jurisdiction outlaws the use of electronics to beat casino games.
Wheel Bias Works – But It's Rarely Available
As covered before, you can't use electronics like the Eudaemons or Small/Tse to legally beat roulette. However, you can use a strategy called wheel bias. Can you win at video poker.
This term refers to the process of watching wheels to look for biased results. Some wheels favor certain pockets when they suffer wear and tear.
Joseph Jagger was the first player to successfully use this technique to win. In 1873, the English engineer hired six clerks to visit Monte Carlo and record roulette results.
Upon receiving the data, Jagger analyzed it to figure out which wheels and accompanying pockets featured bias.
He visited Monte Carlo and used his knowledge to make £65,000. That amount is worth over £7 million today when accounting for inflation.
Billy Walters is another player who has beaten casinos through wheel bias. He and his 'Computer Team' won approximately $4 million off Atlantic City casinos in the mid-1980s.
Unfortunately, wheel bias isn't as prevalent today. Most casinos now use Starburst wheels, which don't break down as easily.
You could spend time recording hundreds or thousands of spins only to find that no bias is present. You'll eventually feel defeated if your efforts keep turning up nothing.
However, Small offers a simpler way to detect wheel bias.
'If you wish to beat the house, look for a wheel for which the ball drops only from one side of the rim — that is, a crooked table. Prediction becomes substantially simpler and more reliable.'
Other Ways to Improve Your Roulette Odds
You can't use an overhead camera to monitor roulette due to devices being outlawed in gambling. Wheel bias is legal but also incredibly hard to use.
What, then, can you do to boost your chances of winning? Here are some simple roulette tips that'll help you win more often.
Play European or French Roulette
Earlier, I discussed how French and European roulette feature the lowest house edges in the game. They come with 1.35% and 2.70% house advantages, respectively.
You can find the European wheel in most online casinos and in a decent number of land-based settings. French roulette is available in Microgaming and Realtime Gaming online casinos. It's also located in a few European countries (e.g. Germany, Monaco).
Look for Roulette Bonuses
Some internet casinos offer roulette deposit bonuses. You'll typically find such offers under 'table games' deals.
A roulette bonus is based on a match percentage of your deposit amount. You must meet terms and conditions to withdraw the money.
Here's an example:
- A casino offers a 100% match deposit bonus worth up to $200.
- You deposit $100 and qualify for a $100 bonus.
- Wagering requirements are 100x.
- 100 x 100 = $10,000
- You can withdraw the $200 bonus after wagering $10k.
$10,000 may sound like a lot to bet. However, you theoretically won't lose much money earning this bonus when considering roulette's low house edge.
Take Advantage of VIP Rewards
Both land-based and online casinos offer loyalty rewards to roulette players. You should ensure that you're signed up for the VIP program at your favorite casino to take advantage.
Online roulette begins delivering loyalty perks after you deposit and place real-money bets. Casinos require you to sign up for their player's club and then tell the dealer that you wish to be 'rated.'
Conclusion
Michael Small and Chi Kong Tse were able to dominate roulette games by studying game conditions and using an overhead camera. They gained an unheard of 18% advantage over the house in this case.
House Advantage Casino Games
But I use the phrase 'over the house' lightly in this case. Tse and Small didn't put their research to use in an actual casino setting.
The problem is that their methods would be highly illegal in casinos. You can't use electronic devices to beat the casino.
Roulette House Advantage
Wheel bias is the only legal roulette advantage gambling methods. If you don't want to waste hours with wheel bias, though, you can also use the basic tips provided earlier.
