Thursday, 28th September, 2023

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# Online Casinos: Is RTP The Same as House Edge?

If you ask any experienced casino player, they will certainly tell you that house edge is one of the most important considerations when choosing to play a game, or employ a strategy therein. For them, it might mean choosing to visit a land-based casino because it has single-deck blackjack or single-zero (European) roulette with La partage rule, and then perhaps avoiding those that don’t.

House edge, as most are aware, is the theoretical percentage amount that a casino should profit over a period of time. If the house edge is 2.7%, as is generally accepted for standard European roulette, then the casino would make \$2.70 for every \$100 wagered. However, this is a probability calculated over a long period of time, and it usually does not reflect a single session.

RTP reflects real-world house edge

But if house edge has been accepted and understood, although queried by mathematicians, what can we say about it at online casinos with software-based games? We know that they use a different measurement, called RTP (Return to Player). In effect, this is like a reverse house edge, displayed as a percentage that will be paid back to the player (theoretically). So, if the RTP is 96%, the player would expect to get \$96 for every \$100 spent – over time. As such, a game with an RTP of 96% effectively has a house edge of 4%. Simple.

So, can we say that RTP and house edge are the same, except that they are displayed differently? Yes, but it goes a little further than that. You see, software-based games are built to reflect the real house edge of physical casino games. So, if we checked something like Playtech’s European Roulette, we can see it has a 97.3% RTP, reflecting exactly the 2.7% house edge of ‘real’ European roulette. This is a crucial point, and it is one that is not always fully understood by players.

However, making assumptions about the RTP/house edge can also lead players into a trap. Why? Because it is usually calculated on the premise of playing with best strategy. One of the best examples of this can be seen with online baccarat games. If you are familiar with baccarat, you will know it has a reputation for being a high-roller favorite, particularly in casino meccas like Macao. But, it is also a game where your decisions matter, even if the outcome does seem random.

You will see baccarat’s RTP advertised within a range, normally somewhere around 82%-98.85%. Obviously, the latter figure is more desirable for players, but it is based on the proviso that optimal strategy is employed, which probably means playing the “banker bet” and avoiding the tie “bet” at all costs.

The overall point we are trying to make is that there can be an assumption when playing at online casinos that the RTP will take care of itself; that the RNGs (Random Number Generators) that determine the outcome of these games will just pay eventually. This is the wrong way to think about it. You must play with best strategy at all times to get the maximum benefit from it – just like you would if playing a physical game. RNGs do mean the outcome is random, but it is only within certain parameters.

Finally, you should remember that the best casinos and casino software providers will always endeavor to have the RTP of their games reflecting the real-world house edge. You can check this out before you play by looking at the game’s rules.

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Don't gamble what you can't afford to lose. Know that it should be just for fun and the house always wins.

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