RTP vs House Edge: Where is the Difference?
Last updated: August 29, 2022
I have noticed that RTP and House Edge concepts cause a lot of confusion among beginner players of online casino (both video slots and classic games). But those two are the most important parameters of every online casino game. Hence, it is quite essential to learn about them since they influence the financial aspect of online gambling in a big way.
That’s why I had decided to write an article about it, in which I am going to explain:
an underlying concept behind House Edge and RTP
how House Edge and RTP is measured
how House Edge and RTP interact with each other
what are the best online casino games in terms of House Edge and RTP
So to say, let’s get in deeper and discuss each item in details.
The house always wins concept
You have probably heard this statement many times, but what it actually means? To make things more clear, I would modify this sentence and say “The house always wins, but it is only true in the long run”. And that would be a quite important supplement, which makes a big difference.
It is the case because online casino players can (and they actually often do) win in casino games in a short distance. But as they are continuing to gamble, they have less and less chances to end up with a profit.
So to speak, the house always wins concept comes down to that:
all casino games cause losses to online casino players in the long run
the online casino player can win in a short term
House Edge and RTP determines how much online casino player is going to lose
For example, you can win a lot during 1,000 spins in online slots (or wager in any other casino game), but you have zero chances to profit after 1,000,000 spins or wagers.
“The house always wins” is a rather long and not too handy expression, and gambling community come up with shorter terms for it. That is how “House Edge” or “RTP” had appeared. Those two are the exact synonyms of “the house always wins” concept. I will talk about each of them in further chapters.
How House Edge or RTP is getting measured
House Edge or RTP is not some abstract thing, and it can be measured quite precisely most of the time in percentages. It becomes possible, because in every online casino game (in both slots and table games) there is some computer program behind the scenes. This program determines basically everything including chances to hit a winning. Thus, influencing chances to hit a winning, software providers can set House Edge or RTP at a certain percentage level.
Moreover, it is always necessary for each online casino game to disclose what the House Edge or RTP is set in order to obtain a gambling license. License commission tests each licensed casino game to verify that claimed House Edge or RTP is true. That is how we can be sure that asserted House Edge or RTP percentage is honest.
So every time you see some percentage in front of some casino game, you are probably looking at its House Edge or RTP level. And this percentage is the most important parameter of every online casino game since it determines exactly how much you are going to lose in the long run.
RTP vs House Edge
RTP and House Edge represent the same concept (“the house always wins”), and they are basically the same things with the only one difference. The only difference between them is how they are calculated.
House Edge is calculated pretty much straightforward, and when you see, let’s say, House Edge of 2,7%, it means that an online casino player loses 2,7% on average each bet (wager) he/she makes. In practice, an online casino player could win a lot or lose 100% of the particular bet, but after millions of bets, the average loss would be 2,7%.
You can usually come across House Edge only regarding online casino games other than video slots.
RTP (return to player) means how much of player’s bet is returned on average, and, as I have said before, RTP does not differ from House Edge on the conceptual level. However, in comparison with House Edge, RTP is calculated in reverse order. So, if an online casino game has House Edge of 2,7%, then the RTP for this game would be 97,3% and vice versa.
Now you can see how House Edge and RTP are very similar.
Summing up, online casino players usually reference casino’s advantage as House Edge when they are talking about table games (Blackjack, Roulette, Baccarat etc.) and they reference it as RTP (return to player) when they are talking about online slots.
The Best casino games in terms of House Edge or RTP
House Edge (RTP) could vary pretty significantly from one online casino game to another. Given that, let’s rank the most popular online casino games in terms of House Edge (RTP):
Blackjack: approx. 0,5% at best (depending on how good you use basic strategy)
Craps: approx. 1% at best (depending on what kind of bets you are making)
European and French Roulette: 2.7%
Slots in online casinos: 3-4% on average (or 96-97% RTP)
American Roulette: 5,26%
Slots in Vegas land-based casinos: 4-12% (or 88-96% RTP)
Also, you can come across ROI
ROI (return on investment) is rather a financial term and you can meet it in the online gambling field relatively rare. ROI is exactly the same as House Edge with the only difference that it has a negative sign of a number.
So, if an online casino game has the House Edge at 2,7%, then the ROI of this game would be -2,7%. It is quite logical since every casino game cause return on investment at negative levels.
Why you should always check RTP (House Edge) of casino games
It's no secret that the theoretical return is one of the most important parameters to pay attention to when choosing a slot. The process of checking the RTP itself can become quite tedious. This is especially the case when a player likes to change games without stopping at something in particular. Usually, online casinos try to place slots with a higher RTP, because the higher the RTP, the more players will be involved in the game. It can happen that some players look at the casino's overall payout percentage. As a consequence, if there are slots with a high theoretical payout, then the overall percentage will be high.
No doubt, checking RTP is necessary to increase your odds of winning or avoid losing big money. The higher the RTP percentage, the better for you as you'll know how much the casino takes as the house edge and how much it gives back as winnings. To find games with a more favorable RTP you should look at online casinos which have a higher average theoretical payout. But, the question immediately arises as to where to get the average RTP. For the most part, you can use the ratings online casinos where there is this figure, or affiliate sites, as well as such information, can be on the gaming platforms. As an example, if the first site shows an average RTP of 96% and the second site shows 97%, it is obvious that the second site will be more interesting.
In games, the selection will be the same as in casinos. The fact is that the RTP in slots can be found by following the Paytable. Typically, here you will find the average percentage of the theoretical return, as well as what combinations will bring you the most money. If you do not see your RTP in the paytable, you have to go to either the official website provider to find that figure or search online casino and slots reviews from other websites. But, you should also keep in mind that some developers may offer different payout percentages for the same game. So, as I wrote above, you can pay attention to the average RTP of the casino itself or use the information from my website, which lists the RTP for each slot and you won't need to search for this information.
I would highly recommend to establish House Edge (RTP) of a casino game in which you are planning to gamble. Because nothing is going to affect your gambling experience more than this crucial parameter.
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