If you’ve been taking a look at online casino guides or ways to improve your game, then you’ve probably come across the terms probability, odds and house edge.
Those new to the ever-exciting casino world, or those who simply haven’t been able to grasp the aforementioned terms, fear not because we’ve put together a comprehensive guide that is sure to take you from zero to hero in online gaming.
Join us as we explore the relevance and importance of probability, come to understand exactly how odds work and take a look at how a house edge or average payout ratios are calculated.
Probability in Betting
When someone refers to probability, they are talking about the likelihood of something happening, and when it comes to online gambling, probability is key – especially if you want to avoid being a victim of the gambler’s fallacy.
It essentially makes it a lot easier for a player to determine exactly why they may be more likely to succeed in their gambling endeavours if they understand it properly. If you look at a European Roulette wheel as a working example, you will see 37 numbers, with all of them having an equal chance of being called, and 18 red numbers meaning the probability of red being called would be 18 out of 37.
Thus, if you are looking to be on 13, there is a 1 in 37 chance you will win. This ultimately means that if the wheel is spun an exceptionally large number of times in a fair game, you would be able to determine that you may see a 13 being called at least once every 37 spins.
To put it rather simply, odds are a measure of just how much a casino will pay out if you win on your stake, which is why they are often referred to as payouts by casinos and players alike.
In roulette, the odds for one number would be 35 to 1, so betting $1 on 13 would pay you out $35 if it is then called and the $1 that you bet will be returned to you. There are a number of ways to state the odds so be sure to know the difference.
When it comes to the house edge, things get a little harder to calculate. This is because it’s a measurement of how much profit the casino is expecting to make with each bet that is going to be made in the long run.
If we assume that a player is going to wager for a total of 3700 times when playing roulette, we would be able to see a fairly decent representation of long term numbers. If the same player wagers on 13 each time with $1 bets, the casino would expect to receive $3700. During that time, the number 13 is expected to be called at least once every 37 spins, meaning in 3700 spins, it’s expected to be called at least 100 times.
So, if each win brings in $35 (or $36 if you count the amount wagered as well) the player will ultimately be getting $3600 for his 100 wins, meaning he loses $100 on his investment. 100 multiplied by $100 over $3700 would give you 2.7% profit expectation for the casino, which is known as the house edge.
Why All 3 Matter
You need to have a good knowledge of probability and the odds presented to you if you want to calculate an online or land-based casino’s house edge.
The odds are always given and the probability can be easily determined in games such as roulette, or even craps. However, there are some games, such as poker and blackjack, that are harder to crack, so having extensive knowledge of all three terms is vital.