House Advantage

Card Counting for the Casino Executive by Bill Zender

"Gentleman (and ladies), why does the game of Twenty-one win for the house?"

It seems like a simple question but I would imagine that not one in ten casino executives knows the correct answer. But while you think about that question, here is another;

"Why does any gambling game win for the house?"

Some executives will be able to answer at least part of this question. Actually, there are three answers:

1. Some gambling games return less money to the players than what the proper payoff should be.

Example: the Roulette wheel contains 38 numbers. If we bet one chip on the number "17" and the ball falls in our numbers we get paid thirty-five chips. The proper payoffs should have been thirty-seven chips. In theory, the house makes money whenever they pay out by shorting the player two chips.

2. Other games are charged a commission on all winning bets.

Example: in Craps all winning buy bet wagers (which are paid in accordance with proper odds) are charged a 5% commission.

3. And then we have multi-parameter games that vary based on play decision and dependence on previous outcomes.

The edge in gambling, whether through commissions or the mathematical shortcomings, is more officially known as "House Advantage."