Casino games are what make the casinos’ worlds go round.
They also make the casino gamblers’ world go round, too.
But you’d be surprised at how little the average gambler knows or understands about how casino games work.
The purpose of this post is to explain some of the most important things you don’t know about casino games.
After all, if you’re going to play these games, you should know at least something about how they work and what that means for you and your money.
1- All Casino Games Have a Mathematical House Advantage
Every casino game has a statistical advantage built into the rules that favors the house, not the gambler.
This statistical advantage is called “the house edge,” and it’s always represented as a percentage.
The house edge is the percentage of each bet on that game that you’ll lose over a statistically significant number of bets.
In other words, if you place enough bets, the average amount you lose per bet will resemble the house edge.
The more bets you make, the closer your actual average will eventually get to the expected average.
Here’s an example:
The house edge on an average blackjack game – assuming you play with perfect basic strategy – is usually about 0.5%.
This means that over thousands of hands, you’ll lose 0.5% of every bet – on average.
If you’re betting $100 per hand, your expected loss per hand is $0.50.
2- A Lower House Edge Is Better, BUT It Doesn’t Necessarily Improve Your Probability of Winning
You’ll see novice gambling writers claim that a lower house edge means you have a higher probability of winning.
This isn’t the case, though – the probability of winning is a factor in determining the house edge, but it’s not the sole factor.
The other factor is just as important, and that’s the payout for the bet.
Here’s an example:
Suppose you had a slot machine with 10 symbols on each of 3 reels, and you have an equal probability of hitting any of those symbols.
Let’s also assume that this specific slot machine only has one winning combination – 3 cherries in a row.
The probability of getting those 3 cherries is 1/10 X 1/10 X 1/10, or 1/1000.
That’s the same as having odds of 999 to 1 of winning.
Now let’s assume that the jackpot for that combination is 995 coins.
The payback percentage for this slot machine game is 99.5%, which means that the house edge is just 0.5%.
But your odds of winning a spin on that slot machine are still just 1 in 1000, even though the house edge on this game is lower than any slot machine you’ll ever run into.
3- Most Casino Games Have No Skill Element at All
One way to categorize and compare casino games is by how much skill is involved. I can think of 3 categories right away:
- Casino games where you have no meaningful decisions to make
- Casino games where the bet you choose matters
- Casino games where you make decisions that affect the outcome
An example of a casino game with no meaningful decisions to make is European roulette. Every bet on a European roulette game has the same house edge – 2.70%.
An example of a casino game where the bet you choose matters is craps. You can choose the pass line bet, which has a house edge of 1.41%, or you can choose multiple prop bets where the house edge is well over 16%.
Finally, an example of a casino game where your decisions affect the outcome is real money blackjack. If you hit when you have a total of 20, you’re probably going to bust. The decisions about how to play your hands matter.
But most casino games fall into the first category.
4- You Can Measure a Casino Game’s Odds With “Volatility”
Volatility just refers to the swings up and down in your wins and losses. With a game like the slot machine example I referred to in #2, you’re dealing with a low house edge but a lot of volatility.
You’ll rarely win, but when you do, you’ll win a lot.
And on those rare occasions when you win twice in a row, you’ll really stack up the dough.
But with a game like roulette where you can bet on black, the volatility is low. You have a 47.37% probability of winning an even-money blackjack bet.
In the long run, the casino still wins, but it still takes longer because you’re winning a large percentage of the time.
With slot machines, the hit ratio – the percentage of spins that result in a payoff – is usually between 30% and 40%.
5- Slot Machines Are Basically Just Fancy “Skinner Boxes”
BF Skinner was a famous behavioral scientist who did studies on how motivated rats were to pull a lever on a box. The reward for pulling the lever was a piece of cheese.
In one group of rats, they got cheese every time they pulled the lever.
In another group, they got nothing every time they pulled the lever.
Not surprisingly, the group that got cheese was far more likely to pull the lever on the Skinner box.
But then he tried something different.
He added a random element to a third group. Sometimes they got a piece of cheese when they pulled the lever, but sometimes they didn’t.
Slot machines work on the same principle.
Gamblers are motivated to keep pulling the lever because they don’t know if they’re going to get a winning combination or not.
6- Skilled Blackjack Players Can Beat the House
In Vegas Vacation, there’s a funny scene where Clark Griswold is explaining to his Cousin Eddie that blackjack is the only game in the casino where a skilled player can beat the house.
The implication is that if you use basic strategy, you’ll have a mathematical edge over the house.
This is not correct.
Even if you play every hand perfectly, the casino still has an edge over the player in blackjack.
It’s just a small edge.
But there are additional tricks a skilled blackjack player can take to get an edge over the casino, like counting cards.
But just knowing how to play each hand isn’t enough to get a mathematical edge.
7- The Slots Clubs Isn’t a No-Brainer
Every time you read an article about casino gambling, the writer insists with almost religious fervor that you should always belong to the players club and always play with your card inserted.
I understand their point. If you can get a percentage of your losses back in the form of rebates and freebies, you should.
But consider this:
What do you give up by signing up for the players club?
Don’t you have to give the casino your name, address, phone number, and email address? And what is the casino going to do with that information?
If you guessed that they’re going to send you advertising, you’re right.
Getting constant advertising might be fun for some people, but I’ll pass.
Also, if you have impulse control problems, getting ads from a casino is probably the worst thing that can happen.
After all, problem gamblers shouldn’t be getting come-hither ads from casinos. But don’t skip the players club because you suspect it will decrease your chance of winning. The casinos have no incentive to decrease your probability of winning.
In fact, they have an incentive to keep you playing more often.
That’s because the statistical advantage works because of the Law of Large Numbers.
The more you play, the closer you’re going to get to the statistical losing average they expect.
8- Craps Is a Way Better Game than Most Gamblers Realize
A lot of new casino gamblers avoid craps because they think it’s too complicated.
The truth is that craps is easy to learn and easy to understand, especially if you stick with the simplest bets at the table.
And those bets, coincidentally, are the bets with the lowest house edge.
Craps offers more fun and entertainment value than almost any other game in the casino, and the house edge of 1.41% or 1.36% on the simplest bets are a bargain compared to other games.
9- You’re Not an Idiot for Enjoying Roulette
Some gamblers write about roulette gamblers as if they’re the lowest of the low.
But the truth is, you’ll lose less money on average at the roulette table than you will playing slot machines.
Not only is the house edge higher on most slot machines, but the amount of money you’re putting into action per hour is a staggering difference.
The average slots player might make 500 spins per hour. At $3 per spin – which is a good average – you’re looking at putting $1500 per hour into action.
If you find a loose slot machine, one with a house edge of 6%, for example, your expected loss per hour is $90.
Contrast that with a roulette table. The house edge is 5.26%. but the number of bets you’re placing per hour is probably closer to 50 – maybe even less if the table has a lot of players.
Let’s say you’re betting $10 per spin instead of $3 per spin.
You’re putting $500 into action per hour.
With a house edge of 5.26%, the expected hourly loss is only slightly higher than $25, which is a much lower cost of entertainment than playing the slots.
AND, you don’t have to stress out about making decisions at the roulette table.
All the best are basically the same, mathematically.
10- Casino Games Are Both Better and Worse Than the Lottery
States with a lot of casinos don’t often have lotteries, but some people live on the border between 2 states. For example, I live in Texas, and we have a popular lottery but no casinos.
The casinos in Oklahoma, though, are just a short drive from here.
The house edge on the good bets, as we discussed, might be as low as 0.5%. But remember – the house edge isn’t the only factor determining how much you lose.
Most people spend less than $20 a week playing the lottery.
With a house edge of 50%, that’s an expected loss of $10 per week.
Go to a casino, though, and you’re almost guaranteed to bet more than $20 within your first hour.
Remember that roulette example from #9.
That’s a slow game with a low minimum bet, but you’re still putting $500 into action there in an hour.
Even though the house edge is 10% of that for the lottery, you’ll lose 2 to 3 times more money playing roulette.
Casinos and online casino games are a lot of fun, but it’s just like any other consumer business – it’s up to you to become an informed consumer.
This is your money we’re talking about. It’s up to you to make sure you gamble wisely.
And some familiarity with how it all works is a prerequisite for that.