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# Playing Against the House by Meg Elaine Schneider

Casinos and other gambling establishments are in business to make money. They do this by altering their payouts from true odds to casino odds, guaranteeing them a percentage of every wager.

The difference between true odds and casino odds is called “the house edge” or “the house advantage”; it's also known as a “vigorish” or “vig.” The house edge varies from game to game. It can be as low as 1.1 percent or as high as 40 percent, depending on the game and the type of bet.

## Casino Odds Versus True Odds

Roulette offers a prime example of the difference between true odds and casino odds. On an American roulette wheel, there are 38 pockets. The odds of any given number coming up on any given spin are 37 to 1. But when you bet on a given number, the casino only pays out 35 to 1 if you win.

Say you bet \$1 on each number, for a total wager of \$38. For the winning number, you'll be paid \$35, plus you'll get your \$1 back on that particular number, for a total of \$36. So, even when you bet on every available number, you lose \$2. That's the house edge: 2/38, or 5.26 percent — the difference between true odds and casino odds.

If this seems too abstract, imagine wagering on the flip of a coin. As discussed already, there are two possible outcomes — heads or tails — in a coin toss, so the probability for either one occurring is 50 percent.

Let's say you bet \$10 that the coin will land heads up. But instead of receiving even money — \$10 in addition to your original \$10 wager — you get only \$9 for winning. The \$1 difference is the house edge, in this case a healthy 10 percent for the house.

The chart below illustrates some typical house edges on common casino games.

## House Edge

Baccarat

Banker

1.17 percent

Baccarat

Player

1.36 percent

Big 6

\$1

11.11 percent

Big 6

\$5 or \$20

22.22 percent

Blackjack

Playing basic strategy

0.6 percent or lower(in a 6-deck game)

Caribbean Stud

5.22 percent

Casino war

Bet on ties

18.65 percent

Casino war

Surrender on ties

3.7 percent

Craps

Pass/Come

1.41 percent

Craps

Any craps

11.11 percent

Craps

Proposition bets

11.11 percent to 16.67 percent

Let It Ride

3.51 percent

Pai Gow

2.5 percent

Acey Deucy/Red Dog

2.69 percent

Roulette

Double-zero wheel

5.26 percent

Sic bo

2.78 percent to 47.22 percent

Slots

Nickels

15 percent*

Slots

Quarters

10 percent*

Slots

\$1

8 percent*

Slots

\$5

5 percent*

Three-card poker

Pair plus

2.32 percent

Three-card poker

Ante plus play

1.46 percent

*These are approximations only. Odds for slots may vary greatly according to the individual casino, the type of machine, and payout tables.

— Indicates that house edge is the same for any bet.

Games of chance usually have the highest house edges. In land-based bingo games, for example, the prizes awarded usually total around 75 percent of the total money taken in; the house keeps the remaining 25 percent to cover expenses and profits. Keno also has a high house edge, typically paying out only 50 percent to 78 percent of what it takes in.

In games of chance, you don't have much control over the house edge. The best you can do is try to shave the edge by learning which bets are most advantageous for you and avoiding the “sucker bets” — the wagers with overwhelmingly high house advantages.

Payout odds are expressed as either “to” or “for.” When the ratio is 3 to 1, that means you get your original wager back, plus triple that amount in winnings. When the ratio is 3 for 1, it means you get triple the amount you wagered, but you do not get your original wager back. In this case, your actual winnings are only two-thirds what they would be on a 3-to-1 bet.

Games of skill, like blackjack and many variations of poker, have lower house edges, usually around 5 percent, and savvy gamblers have more opportunities to trim that edge. Players who follow recommended playing strategies and money management techniques can reduce the house edge on these games to less than 1 percent or even turn the odds in their favor.

Knowledge, skill, and discipline are every player's best weapons in fighting the house edge, whatever your game of choice may be.

## House Edge Versus Hold

The house edge is not the same as the “hold.” The hold is the percentage of money won from players by the casino, and this can vary wildly from day to day, and even from shift to shift.

For illustration, suppose the casino sells \$10,000 in chips during a 24-hour period. At the end of that period, the casino has \$5,000 in chips; the rest of the chips have been cashed in by players. In this case, the casino's hold is 50 percent.

The built-in house advantage on all types of wagers is designed to ensure that the casino always takes in more money than it pays out in winnings. No matter how well you play most games (blackjack and poker are exceptions), if you play long enough, the house edge will catch up with you, and the casino's hold is virtually assured.

Fortunately for the casinos, relatively few players either follow recommended strategy or bother to understand the effects of the house edge. As a result, the casinos' real return — the amount players actually lose — can be ten times or more the expected return from the house edge.

There seems to be a direct correlation between luck and skill, or knowledge, on the gaming floor. According to many experts, a large percentage of gambling losses can be attributed to poor playing decisions, poor execution of strategies, and failure to have a money management plan. The more you know about the games you play, the better prepared you are to “bet smart,” and the more likely you are to go home a winner.

Lots of popular casino games offer additional bets, ostensibly to add a little extra excitement to the action. In blackjack, the add-on is the insurance bet; in craps, it's the “crapless craps” bet; in American roulette, it's the five-number bet.

The house edge for almost all add-on bets is high, sometimes absurdly so. The insurance bet in blackjack carries a house edge of about 6 percent. The tie bet in baccarat has a 14 percent house edge, and the side bet in Caribbean Stud poker has a house edge of more than 25 percent.

Though these offerings seem to add some spice, experts recommend ignoring the gimmicks and concentrating on the game. The add-on bets are almost always sucker bets and should be avoided.

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