Don’t worry, you don’t need to be a math wizard to understand some of the math involved in gambling.

What’s more important is the concepts the math applies to, like the House Advantage, Randomness, Odds, Probability, and the Independence of Events.

Let’s get into the math of the House Advantage.

The house advantage is a mathematical winning edge that a gambling operator (sports book, casino, VLT, slot machine, lottery, etc) uses to ensure the business is making money over a long period of time.

The house advantage, sometimes called the house edge, is an equation that is built into every form of regulated gambling. It can also be expressed as a percentage that can range anywhere from 1% to over 25%, depending on the operator who provides the games. Local casinos, popular sportsbooks, or “hot” VLTs at the pub, all contain a mathematical edge that guarantees the gambling operators will be profitable in the long-term.

Here are a few examples of how the house advantage works in action.

Slot Machines

A slot machine that has an 8% house advantage, means that for every $100 a player bets, the machine keeps about $8, providing $92 back to the player over the long-term (spread out over many spins).  There will be many wins and losses to ensure the game remains random and unpredictable, however, over the long term, players can expect to lose more money than they win.

The longer you play, the more spins you make, and the more that built-in edge works against you.  Winnings only become real profits when you stop—otherwise, they’re just more money being risked under the same house advantage, which can chip away or eventually deplete the overall amount that was put into the machine, including winnings.

Blackjack

The house advantage can be written directly into the rules of the games. In blackjack, the rule is that if both the player and the dealer bust (go over 21) the dealer keeps the player’s wager. The dealer didn’t technically win, but the casino still claims the profits.

Roulette

to understand house edge in this game, we explore pay-off odds vs true odds. The easiest way to establish the house advantage is by setting the pay-off odds lower than the true-odds of winning. Roulette wheels have 37 numbered slots 1 to 36 and 0. The true odds of picking the correct number with a single bet are 36 to 1, or 36 loses for every 1 win.

However, pay off odds are set to 35 to 1, just slightly less than true odds.

The between true odds and pay off odds create a house advantage of 2.7%, meaning that over time players will lose an average of 2.7% of all the money they wager.

The house advantage is not limited to only games found in casinos, but is included in sports betting and online gambling. There will always be a house advantage no matter what game or sport that gets bet on.