What is house edge?

Definition

House edge is the average share of each wager that a game keeps for the operator over the long run, expressed as a percentage of the amount bet. It is the mirror of RTP: a game with 96% RTP has a 4% house edge. The edge is built into the game's rules and pay table, so it is the same for every player and every bet size. (source: UK Gambling Commission remote technical standards, iGaming Times glossary)

Over a single bet the edge is invisible; the player wins or loses the whole stake. Over thousands of bets the results average toward the edge, which is why the house wins in aggregate while individual players can win large amounts. (source: iGaming Times glossary)

Example

European roulette has one zero among 37 pockets. A 1-unit bet on red pays even money; the chance of winning is 18/37. Expected return = 18/37 × 2 = 0.973 units, so the house keeps 0.027 units per unit bet: a 2.7% edge. The same bet on an American wheel with two zeros returns 18/38 × 2 = 0.947, a 5.26% edge. Same bet, two rule sets, double the edge. (source: iGaming Times glossary)

Formula

• House edge (%) = 100 − RTP (%). (source: UK Gambling Commission remote technical standards)

• House edge = (true odds − payout odds) expressed as a share of the stake; for a bet with win probability p and payout multiple m (including stake), edge = 1 − p × m.

• Expected GGR = total wagers × house edge (blended across the games played). Worked example (illustrative): 500,000 USDT wagered × 3.5% = 17,500 USDT expected GGR.

• Edge per hour = edge × bet size × bets per hour, which is why fast games with small edges can earn more than slow games with large edges.

Comparison

• Typical house edge by game (illustrative; rule-dependent): blackjack with basic strategy about 0.5–1% · baccarat banker 1.06%, player 1.24% · European roulette 2.7% · American roulette 5.26% · online slots 3–6% · keno and scratch games 10% and more. (source: iGaming Times glossary, iGaming Times glossary)

• House edge vs RTP: the same number from two sides; RTP is quoted on slots, house edge on table games.

• House edge vs hold: hold is what a game actually kept in a period (GGR ÷ wagers); it drifts around the theoretical edge and converges with volume.

• House edge vs volatility: edge sets the average; volatility sets how wide the swings are around it.

Impact on the owner

• Your revenue is wagers times the blended edge of what your players actually play. Lobby composition, not any single game, decides the number.

• A low edge is not a loss: low-edge games with high turnover (blackjack, baccarat, crash) can produce more GGR per hour than high-edge games nobody plays twice.

• Rule choices change the edge: single-zero versus double-zero roulette, blackjack payout 3:2 versus 6:5, side bets; where a studio offers variants, the version you list sets the edge your players face.

• Players read the edge as fairness. In the crypto segment, originals at 1–3% edge are the expectation; a lobby built on high-edge games loses that audience.

How it works in practice

The studio publishes the theoretical RTP (and so the edge) of each game and the laboratory certifies it. The operator's back office reports actual hold per game and provider per period next to the theoretical edge; the gap narrows as wagers accumulate. Revenue planning uses expected GGR = projected wagers × blended edge, then applies content fees (a share of GGR) and bonus cost to reach NGR. Promotions that lower the effective edge for the player, such as cashback and rakeback, are accounted as bonus cost, not as a change to the game's edge. (source: UK Gambling Commission remote technical standards, iGaming Times glossary)

FAQ

• 01Is house edge the same for every player?+
  Yes for the same game and rules; strategy can change the effective edge in skill-influenced games such as blackjack.
• 02Can a casino change the house edge?+
  Only by choosing game versions and rules the studio or the regulator allows; not round by round. (source: iTech Labs)
• 03Which game has the lowest house edge?+
  Blackjack with basic strategy and baccarat banker bets are among the lowest; many crypto originals sit at 1–2%.
• 04Why does the house always win?+
  It does not win every bet; it wins on average because every bet carries a small negative expectation for the player, and volume averages the results.
• 05Does a bonus reduce the house edge?+
  It lowers the player's effective cost for that promotion; the game's edge is unchanged and the bonus is a cost in NGR.

Related

• RTP · GGR · NGR · Provably Fair