Understanding Probability, Odds And House Edge

Are you a gambler or do you want to be one and have been busily reading up all you can on the topic? Then you must have at one time or the other stumbled upon such terms as House Edge, Probability and Odds.

If that is the case and you desire a detailed explanation of the meaning and importance of these terms, then you came to the right place, pardner! Now, sit down, pour yourself a nice cuppa and read on for a detailed tear down that will make you an expert on the topic.

Understanding Probability, Odds And House Edge

Explaining house edge with Probability

In the world of gambling, a reference to probability means the likelihood of an occurrence, such as wins and losses. Understanding probability is all-important, as it helps players avoid falling under the snare of the gambler’s fallacy. It also helps players properly calculate the odds of wins and losses, with this being vital for long-term success in gambling. Thus, players can judge if a game is excessively skewed to favour the house, or whether it is worth playing as the probability of success is reasonable.

Odds And Ends!

Simply put, odds refers to the prize a casino pays out if the players win a bet. They are also referred to as payouts. For example, in Roulette, the odds for any particular number is 35:1. So, were players to bet ₤1 on say, number 5 and it hits, they get a payout of ₤35, with the value of their bet being returned to them. The odds can be stated in lots of different ways and it is important for players to be familiar with all of them.

House Edge

The house edge refers to how much the casino makes in the long run from all types of bets. Now, supposing a player lays a total of 3,700 bets in the long run while playing roulette. If the player bets on the same number on each bet -let’s say number 5- and stakes ₤1 per bet each time, then the total worth of the bets would be ₤3,700, with these going to the casino.

During this long run of bets, let’s also assume that the number 5 comes up a minimum of 1 in 37 spins. That means that it was hit around 100 times during the entire 3,700 spins. As every win gets the player ₤35 -or ₤36 considering that the bet value is returned following a win- that means the player gets a total of ₤3,600 during his 100 wins. As the player originally started with a bankroll of ₤3,700, this means that a loss of ₤100 occurred. 100 x ₤100 over the original ₤3,700 gives the edge of the casino, which is set at 2.7%

Importance Of All Three

A good knowledge and understanding of the odds and probability are necessary when calculating the house edge of any game found in a casino, whether online or traditional. There are quite a few games in casinos with no given house edge, but with clearly stated odds and probabilities. Using the two, it can be easily determined and the advisability of spending time playing it speedily decided upon.

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Summary

Blog Title: Understanding Probability, Odds And House Edge

Posted On: 09/11/2018

Author: William Roberts