Online Casino Guide: Understanding Probability, Odds and House Edges

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In articles about online gaming, certain terms are repeated often. Some of them are probability, house edges, odds and payout ratios. Online casino players do know what these terms imply. For instance, if the game has a higher edge, then they can probably lose money in that game. However, not every player knows the deep-exact significance of these terms. In online casinos, one can get without having to get down to the nitty-gritty, but it wouldn’t harm to know the details right?

Probability

It is the likelihood of an event occurring. In the European Roulette wheel, there are 37 numbers starting from 0, and each one of them is likely to be called equally. That means the probability of the 13th number being called is 1 out of 37. There are 18 red numbers and the probability of those are 18 out of 37, which is less than half marginally. What I am trying to tell here is that if the game is fair and the wheel is been spun many times, then the chances of number 13 to appear is one every 37 spins.

Understanding Probability, Odds and House Edges

Odds

It’s a measure of how much the casino pays out if the play has won. Therefore, odds are commonly referred as payouts. In roulette, the odds of single number bet is 35 to 1, which means if the player bets $1 on the number 13 and he wins, then the player will win $35 and the $1 that was wagered by the player will also be returned to him/her. There are few other methods also for stating the odds, so be careful and do not mix them up.

House Edges

It’s bit more difficult to calculate. It is measured by how much money the casino expects to make in long run. For example, assume that a player wagers for 3700 spins on European wheel and he/she wagers $1 on the number 13 every time. Therefore, total amount the player wagers will be $3700. For every 37 spins, the number 13 appears once and the player wins $35 and $1 his/her original wage. In 3700 spins the number 13 is called 100 times, so in 100 wins he gets $3600 on the investment of $3700. Therefore, casino expects to win $100 in a long run and the percentage expectation would be 100*$100/$3700 which gives us 2.7%. This is the house edge.

The average payout ratio is what the player gets and the house edge ratio is what the online casino gets. In given above example, as explained that a player can expect to get $3600 out of every $3700 wagered. Therefore, the average payout ratio is 97.3%. It can be obtained by subtracting 100 from the house edge.

To calculate both, average payout or the house edge, the probability, and the odds must be known. Well, the odds are always known as there can be no wagering without that information. But, in online casino games like roulette, the probability of winning a wager is easily determinable. Although, in online casino games like blackjack or the video poker, the calculation of probability becomes very complex.

And, in slots, the appropriate information is not available about the composition of the reels. Therefore, in games like these, the payout ratio or the house edge is calculated by simulating a large number of events and actually keeping track of each win and lose.

The Bottom Line

The betting opportunity must be considered valuable. If the probability evaluation for an outcome is higher, then the odds on the display never show the true probability of the event occurring or not. And, the amount on the win is always less than what the player should have received if the odd reflects true chances. For more information, visit at Norskcasinoguide.com

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